Industrial Alcohol Market Size and Outlook 2031

Report Description

Forecast Period	2027-2031
Market Size (2025)	USD 150.45 Billion
CAGR (2026-2031)	7.01%
Fastest Growing Segment	Ethyl Alcohol
Largest Market	Asia Pacific
Market Size (2031)	USD 225.91 Billion

Market Overview

The Global Industrial Alcohol Market will grow from USD 150.45 Billion in 2025 to USD 225.91 Billion by 2031 at a 7.01% CAGR. Industrial alcohol is defined as distilled ethyl alcohol intended for purposes other than human consumption as a beverage, serving primarily as a vital fuel additive, chemical intermediate, and industrial solvent. The market is fundamentally driven by the intensifying global demand for cleaner-burning biofuels to mitigate carbon emissions, alongside robust requirements from the pharmaceutical and personal care sectors for high-purity solvents. This growth trajectory is further supported by the expanding production capacities of key regional players meeting international energy needs. According to the Renewable Fuels Association, U.S. ethanol production reached a record 16.22 billion gallons in 2024, spurred by rising domestic consumption and export demand.

Despite this positive momentum, the market faces a significant challenge in the form of raw material price volatility, particularly for agricultural feedstocks like corn and sugar cane. Fluctuations in these commodity costs, influenced by weather patterns and geopolitical factors, can severely impact production margins and supply chain stability. Such unpredictability creates financial uncertainty for producers and may hinder long-term investment in capacity expansion, potentially impeding the broader market's ability to scale effectively against future demand.

Key Market Drivers

The rising global demand for bioethanol as a renewable fuel additive acts as the primary catalyst for market growth. Governments worldwide are enforcing stricter environmental mandates and higher blending targets to decarbonize the transportation sector, compelling fuel suppliers to increase the incorporation of ethanol into gasoline. This regulatory pressure secures long-term offtake agreements for industrial alcohol producers and incentivizes the development of low-carbon fuel supply chains. According to the International Energy Agency, January 2024, in the 'Renewables 2023' report, global demand for biofuels is projected to expand by 38 billion liters over the 2023-2028 period, highlighting the critical role of ethanol in the ongoing energy transition.

Concurrently, the shift towards sustainable and bio-based chemical feedstocks is reshaping industrial applications beyond ground transportation. Manufacturers are increasingly utilizing industrial alcohol as a precursor for green chemicals and, notably, for the production of Sustainable Aviation Fuel via alcohol-to-jet pathways. This innovation addresses the aviation industry's urgent need to reduce greenhouse gas emissions by replacing fossil-based kerosene with plant-based alternatives. According to LanzaJet, January 2024, in a company press release, the newly inaugurated Freedom Pines Fuels facility has the capacity to produce 10 million gallons of sustainable aviation fuel and renewable diesel annually using ethanol as the primary feedstock. To support such diverse utilization, major exporters are ramping up output; according to the USDA Foreign Agricultural Service, in 2024, Brazil's total ethanol production is projected to reach 32.5 billion liters, ensuring sufficient supply for both domestic and international industrial requirements.

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Key Market Challenges

Raw material price volatility, particularly regarding agricultural feedstocks like corn and sugar cane, acts as a primary destabilizing force hampering the growth of the Global Industrial Alcohol Market. Manufacturers in this sector operate on tight production margins where the cost of raw inputs constitutes the overwhelming majority of operational expenditure. Consequently, unpredictable fluctuations in commodity prices, driven by erratic weather patterns or geopolitical shifts, create immediate financial vulnerability. This instability makes it difficult for producers to guarantee consistent pricing or supply commitments to major buyers in the pharmaceutical and fuel sectors, effectively disrupting supply chain reliability.

This heavy reliance on variable agricultural markets deters the long-term capital investment required for infrastructure growth. According to the Renewable Fuels Association, in 2024, the purchase of feedstock represented more than 75% of the U.S. ethanol industry's $30 billion in total operating expenses. With such a high proportion of capital tied directly to volatile inputs, the financial risk associated with building new facilities or expanding existing capacity becomes prohibitive. As a result, the market struggles to scale production effectively, slowing its overall growth trajectory despite rising demand.

Key Market Trends

The integration of Carbon Capture, Utilization, and Storage (CCUS) has emerged as a transformative trend as distilleries strive to lower Carbon Intensity (CI) scores to qualify for clean fuel tax incentives. Producers are retrofitting facilities to capture biogenic carbon dioxide emitted during fermentation for permanent underground sequestration, effectively positioning ethanol as a net-zero feedstock for the sustainable aviation fuel sector. This shift is driven by the financial necessity to decarbonize production processes to secure long-term viability in regulated energy markets. According to Ethanol Producer Magazine, August 2025, in the 'Green Plains reports strong plant performance for Q2' article, Green Plains Inc. confirmed its carbon capture project is on schedule to permanently sequester approximately 800,000 tons of biogenic carbon dioxide annually from its Nebraska facilities.

Concurrently, manufacturers are deploying genetically modified yeasts and artificial intelligence to optimize fermentation yields and enhance process efficiency. These biotechnological solutions enable plants to manipulate metabolic pathways in real-time, significantly minimizing low-value byproducts like glycerol while maximizing alcohol output without requiring physical infrastructure expansion. By adopting these advanced biological agents, producers can counteract feedstock price volatility through improved conversion rates. According to Ethanol Producer Magazine, June 2025, in the 'Novonesis launches Innova Eclipse-L and Innova Total A6' report, the newly introduced yeast strain enables ethanol plants to achieve a 1-2% increase in ethanol yield while reducing glycerol production by up to 40% compared to standard fermentations.

Segmental Insights

The Ethyl Alcohol segment is currently the fastest-growing category in the Global Industrial Alcohol Market, primarily due to the increasing global adoption of bio-based fuels. This market surge is heavily influenced by environmental regulations from entities like the Environmental Protection Agency, which mandate the blending of renewable additives to lower carbon emissions. Additionally, the pharmaceutical industry sustains high demand for ethyl alcohol as a vital solvent and disinfectant agent. These combined drivers across the energy and healthcare sectors ensure that ethyl alcohol continues to outpace other segments in global market expansion.

Regional Insights

Asia Pacific commands the leading position in the Global Industrial Alcohol Market, driven primarily by the abundant availability of cost-effective feedstocks such as sugarcane, corn, and cassava. This agricultural advantage enables major economies like China and India to sustain high-volume production of bioethanol and industrial solvents without heavy reliance on imports. The market is further propelled by stringent government mandates advocating for sustainable fuel blending to reduce emissions. Consequently, the region benefits from a cohesive ecosystem where agricultural output directly supports the expanding requirements of the pharmaceutical, personal care, and automotive industries, ensuring continued regional dominance.

Recent Developments

In September 2024, Gevo, Inc. announced a definitive agreement to acquire the ethanol production plant and carbon capture assets of Red Trail Energy, LLC for $210 million. This acquisition included a facility with a capacity of 65 million gallons per year and an active carbon sequestration site. The move was strategically designed to accelerate the company’s ability to produce net-zero sustainable aviation fuel (SAF) and low-carbon industrial alcohol derivatives. By integrating existing fermentation infrastructure with carbon abatement capabilities, the company aimed to reduce the carbon intensity of its products and capture value from clean energy incentives.
In August 2024, Be8, a Brazilian renewable energy company, signed a strategic licensing agreement with Praj Industries to establish a new wheat-based ethanol plant in Rio Grande do Sul. This collaboration aims to construct the first large-scale cereal-based biofuel refinery in the region, with a projected annual capacity of 220 million liters. The project, involving an investment of approximately R$1 billion, will utilize the partner's proprietary technology to ensure energy efficiency and low operating costs. This partnership underscores the diversification of feedstocks in the industrial alcohol market, moving beyond traditional sugarcane to enhance energy security and sustainability.
In July 2024, Methanex Corporation achieved a major milestone by producing the first methanol from its new Geismar 3 (G3) manufacturing facility in Louisiana. The plant, designed to produce 1.8 million tonnes of methanol per year, utilizes advanced technology to operate with significantly lower carbon emissions compared to conventional facilities. This expansion of production capacity was a critical development for the global industrial alcohol market, positioning the company to meet growing international demand for methanol as a chemical building block and low-carbon fuel. Following the successful startup, the facility began ramping up to full commercial operating rates to serve global markets.
In May 2024, Raízen inaugurated the world's largest second-generation ethanol (E2G) plant at the Bonfim Bioenergy Park in São Paulo, Brazil. The facility, representing an investment of R$1.2 billion, has a production capacity of 82 million liters annually. This launch marked a significant advancement in the industrial alcohol market, as the plant utilizes sugarcane bagasse—a byproduct of conventional ethanol production—to create cellulosic ethanol with an 80% lower carbon footprint than gasoline. The company confirmed that 80% of the plant's output had already been contracted under long-term agreements, highlighting the strong global demand for low-carbon industrial biofuels.

Key Market Players

BASF
Shell
LyondellBasell
SABIC
Cargill
Dow
Methanex
Godrej
Kuraray
Eastman Chemical

By Type	By Source	By Processing Method	By Purity	By Application	By Region
Ethyl Alcohol Isobutyl Alcohol Methyl Alcohol Isopropyl Alcohol Benzyl Alcohol and Others	Corn Grains Sugar & Molasses Fossil Fuels and Others	Fermentation Method and Synthetic Method	Denatured Alcohol and Undenatured Alcohol	Pharmaceuticals Personal Care Products Fuel Chemical Intermediates & Solvent Food Ingredients and Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Industrial Alcohol Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

Industrial Alcohol Market, By Type:

Ethyl Alcohol
Isobutyl Alcohol
Methyl Alcohol
Isopropyl Alcohol
Benzyl Alcohol and Others

Industrial Alcohol Market, By Source:

Corn
Grains
Sugar & Molasses
Fossil Fuels and Others

Industrial Alcohol Market, By Processing Method:

Fermentation Method and Synthetic Method

Industrial Alcohol Market, By Purity:

Denatured Alcohol and Undenatured Alcohol

Industrial Alcohol Market, By Application:

Pharmaceuticals
Personal Care Products
Fuel
Chemical Intermediates & Solvent
Food Ingredients and Others

Industrial Alcohol Market, By Region:

North America

United States
Canada
Mexico

Europe

France
United Kingdom
Italy
Germany
Spain

Asia Pacific

China
India
Japan
Australia
South Korea

South America

Brazil
Argentina
Colombia

Middle East & Africa

South Africa
Saudi Arabia
UAE

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Industrial Alcohol Market.

Available Customizations:

Global Industrial Alcohol Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

Detailed analysis and profiling of additional market players (up to five).

Global Industrial Alcohol Market is an upcoming report to be released soon. If you wish an early delivery of this report or want to confirm the date of release, please contact us at [email protected]

Table of content

1. Product Overview

1.1. Market Definition

1.2. Scope of the Market

1.2.1. Markets Covered

1.2.2. Years Considered for Study

1.2.3. Key Market Segmentations

2. Research Methodology

2.1. Objective of the Study

2.2. Baseline Methodology

2.3. Key Industry Partners

2.4. Major Association and Secondary Sources

2.5. Forecasting Methodology

2.6. Data Triangulation & Validation

2.7. Assumptions and Limitations

3. Executive Summary

3.1. Overview of the Market

3.2. Overview of Key Market Segmentations

3.3. Overview of Key Market Players

3.4. Overview of Key Regions/Countries

3.5. Overview of Market Drivers, Challenges, Trends

4. Voice of Customer

5. Global Industrial Alcohol Market Outlook

5.1. Market Size & Forecast

5.1.1. By Value

5.2. Market Share & Forecast

5.2.1. By Type (Ethyl Alcohol, Isobutyl Alcohol, Methyl Alcohol, Isopropyl Alcohol, Benzyl Alcohol and Others)

5.2.2. By Source (Corn, Grains, Sugar & Molasses, Fossil Fuels and Others)

5.2.3. By Processing Method (Fermentation Method and Synthetic Method)

5.2.4. By Purity (Denatured Alcohol and Undenatured Alcohol)

5.2.5. By Application (Pharmaceuticals, Personal Care Products, Fuel, Chemical Intermediates & Solvent, Food Ingredients and Others)

5.2.6. By Region

5.2.7. By Company (2025)

5.3. Market Map

6. North America Industrial Alcohol Market Outlook

6.1. Market Size & Forecast

6.1.1. By Value

6.2. Market Share & Forecast

6.2.1. By Type

6.2.2. By Source

6.2.3. By Processing Method

6.2.4. By Purity

6.2.5. By Application

6.2.6. By Country

6.3. North America: Country Analysis

6.3.1. United States Industrial Alcohol Market Outlook

6.3.1.1. Market Size & Forecast

6.3.1.1.1. By Value

6.3.1.2. Market Share & Forecast

6.3.1.2.1. By Type

6.3.1.2.2. By Source

6.3.1.2.3. By Processing Method

6.3.1.2.4. By Purity

6.3.1.2.5. By Application

6.3.2. Canada Industrial Alcohol Market Outlook

6.3.2.1. Market Size & Forecast

6.3.2.1.1. By Value

6.3.2.2. Market Share & Forecast

6.3.2.2.1. By Type

6.3.2.2.2. By Source

6.3.2.2.3. By Processing Method

6.3.2.2.4. By Purity

6.3.2.2.5. By Application

6.3.3. Mexico Industrial Alcohol Market Outlook

6.3.3.1. Market Size & Forecast

6.3.3.1.1. By Value

6.3.3.2. Market Share & Forecast

6.3.3.2.1. By Type

6.3.3.2.2. By Source

6.3.3.2.3. By Processing Method

6.3.3.2.4. By Purity

6.3.3.2.5. By Application

7. Europe Industrial Alcohol Market Outlook

7.1. Market Size & Forecast

7.1.1. By Value

7.2. Market Share & Forecast

7.2.1. By Type

7.2.2. By Source

7.2.3. By Processing Method

7.2.4. By Purity

7.2.5. By Application

7.2.6. By Country

7.3. Europe: Country Analysis

7.3.1. Germany Industrial Alcohol Market Outlook

7.3.1.1. Market Size & Forecast

7.3.1.1.1. By Value

7.3.1.2. Market Share & Forecast

7.3.1.2.1. By Type

7.3.1.2.2. By Source

7.3.1.2.3. By Processing Method

7.3.1.2.4. By Purity

7.3.1.2.5. By Application

7.3.2. France Industrial Alcohol Market Outlook

7.3.2.1. Market Size & Forecast

7.3.2.1.1. By Value

7.3.2.2. Market Share & Forecast

7.3.2.2.1. By Type

7.3.2.2.2. By Source

7.3.2.2.3. By Processing Method

7.3.2.2.4. By Purity

7.3.2.2.5. By Application

7.3.3. United Kingdom Industrial Alcohol Market Outlook

7.3.3.1. Market Size & Forecast

7.3.3.1.1. By Value

7.3.3.2. Market Share & Forecast

7.3.3.2.1. By Type

7.3.3.2.2. By Source

7.3.3.2.3. By Processing Method

7.3.3.2.4. By Purity

7.3.3.2.5. By Application

7.3.4. Italy Industrial Alcohol Market Outlook

7.3.4.1. Market Size & Forecast

7.3.4.1.1. By Value

7.3.4.2. Market Share & Forecast

7.3.4.2.1. By Type

7.3.4.2.2. By Source

7.3.4.2.3. By Processing Method

7.3.4.2.4. By Purity

7.3.4.2.5. By Application

7.3.5. Spain Industrial Alcohol Market Outlook

7.3.5.1. Market Size & Forecast

7.3.5.1.1. By Value

7.3.5.2. Market Share & Forecast

7.3.5.2.1. By Type

7.3.5.2.2. By Source

7.3.5.2.3. By Processing Method

7.3.5.2.4. By Purity

7.3.5.2.5. By Application

8. Asia Pacific Industrial Alcohol Market Outlook

8.1. Market Size & Forecast

8.1.1. By Value

8.2. Market Share & Forecast

8.2.1. By Type

8.2.2. By Source

8.2.3. By Processing Method

8.2.4. By Purity

8.2.5. By Application

8.2.6. By Country

8.3. Asia Pacific: Country Analysis

8.3.1. China Industrial Alcohol Market Outlook

8.3.1.1. Market Size & Forecast

8.3.1.1.1. By Value

8.3.1.2. Market Share & Forecast

8.3.1.2.1. By Type

8.3.1.2.2. By Source

8.3.1.2.3. By Processing Method

8.3.1.2.4. By Purity

8.3.1.2.5. By Application

8.3.2. India Industrial Alcohol Market Outlook

8.3.2.1. Market Size & Forecast

8.3.2.1.1. By Value

8.3.2.2. Market Share & Forecast

8.3.2.2.1. By Type

8.3.2.2.2. By Source

8.3.2.2.3. By Processing Method

8.3.2.2.4. By Purity

8.3.2.2.5. By Application

8.3.3. Japan Industrial Alcohol Market Outlook

8.3.3.1. Market Size & Forecast

8.3.3.1.1. By Value

8.3.3.2. Market Share & Forecast

8.3.3.2.1. By Type

8.3.3.2.2. By Source

8.3.3.2.3. By Processing Method

8.3.3.2.4. By Purity

8.3.3.2.5. By Application

8.3.4. South Korea Industrial Alcohol Market Outlook

8.3.4.1. Market Size & Forecast

8.3.4.1.1. By Value

8.3.4.2. Market Share & Forecast

8.3.4.2.1. By Type

8.3.4.2.2. By Source

8.3.4.2.3. By Processing Method

8.3.4.2.4. By Purity

8.3.4.2.5. By Application

8.3.5. Australia Industrial Alcohol Market Outlook

8.3.5.1. Market Size & Forecast

8.3.5.1.1. By Value

8.3.5.2. Market Share & Forecast

8.3.5.2.1. By Type

8.3.5.2.2. By Source

8.3.5.2.3. By Processing Method

8.3.5.2.4. By Purity

8.3.5.2.5. By Application

9. Middle East & Africa Industrial Alcohol Market Outlook

9.1. Market Size & Forecast

9.1.1. By Value

9.2. Market Share & Forecast

9.2.1. By Type

9.2.2. By Source

9.2.3. By Processing Method

9.2.4. By Purity

9.2.5. By Application

9.2.6. By Country

9.3. Middle East & Africa: Country Analysis

9.3.1. Saudi Arabia Industrial Alcohol Market Outlook

9.3.1.1. Market Size & Forecast

9.3.1.1.1. By Value

9.3.1.2. Market Share & Forecast

9.3.1.2.1. By Type

9.3.1.2.2. By Source

9.3.1.2.3. By Processing Method

9.3.1.2.4. By Purity

9.3.1.2.5. By Application

9.3.2. UAE Industrial Alcohol Market Outlook

9.3.2.1. Market Size & Forecast

9.3.2.1.1. By Value

9.3.2.2. Market Share & Forecast

9.3.2.2.1. By Type

9.3.2.2.2. By Source

9.3.2.2.3. By Processing Method

9.3.2.2.4. By Purity

9.3.2.2.5. By Application

9.3.3. South Africa Industrial Alcohol Market Outlook

9.3.3.1. Market Size & Forecast

9.3.3.1.1. By Value

9.3.3.2. Market Share & Forecast

9.3.3.2.1. By Type

9.3.3.2.2. By Source

9.3.3.2.3. By Processing Method

9.3.3.2.4. By Purity

9.3.3.2.5. By Application

10. South America Industrial Alcohol Market Outlook

10.1. Market Size & Forecast

10.1.1. By Value

10.2. Market Share & Forecast

10.2.1. By Type

10.2.2. By Source

10.2.3. By Processing Method

10.2.4. By Purity

10.2.5. By Application

10.2.6. By Country

10.3. South America: Country Analysis

10.3.1. Brazil Industrial Alcohol Market Outlook

10.3.1.1. Market Size & Forecast

10.3.1.1.1. By Value

10.3.1.2. Market Share & Forecast

10.3.1.2.1. By Type

10.3.1.2.2. By Source

10.3.1.2.3. By Processing Method

10.3.1.2.4. By Purity

10.3.1.2.5. By Application

10.3.2. Colombia Industrial Alcohol Market Outlook

10.3.2.1. Market Size & Forecast

10.3.2.1.1. By Value

10.3.2.2. Market Share & Forecast

10.3.2.2.1. By Type

10.3.2.2.2. By Source

10.3.2.2.3. By Processing Method

10.3.2.2.4. By Purity

10.3.2.2.5. By Application

10.3.3. Argentina Industrial Alcohol Market Outlook

10.3.3.1. Market Size & Forecast

10.3.3.1.1. By Value

10.3.3.2. Market Share & Forecast

10.3.3.2.1. By Type

10.3.3.2.2. By Source

10.3.3.2.3. By Processing Method

10.3.3.2.4. By Purity

10.3.3.2.5. By Application

11. Market Dynamics

11.1. Drivers

11.2. Challenges

12. Market Trends & Developments

12.1. Merger & Acquisition (If Any)

12.2. Product Launches (If Any)

12.3. Recent Developments

13. Global Industrial Alcohol Market: SWOT Analysis

14. Porter's Five Forces Analysis

14.1. Competition in the Industry

14.2. Potential of New Entrants

14.3. Power of Suppliers

14.4. Power of Customers

14.5. Threat of Substitute Products

15. Competitive Landscape

15.1. BASF

15.1.1. Business Overview

15.1.2. Products & Services

15.1.3. Recent Developments

15.1.4. Key Personnel

15.1.5. SWOT Analysis

15.2. Shell

15.3. LyondellBasell

15.4. SABIC

15.5. Cargill

15.6. Dow

15.7. Methanex

15.8. Godrej

15.9. Kuraray

15.10. Eastman Chemical

16. Strategic Recommendations

17. About Us & Disclaimer

Report Description

Table of content

Figures and Tables

Frequently asked questions

What was the market size of the Global Industrial Alcohol Market in 2025?

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