Bio-Alcohol Market Is Expected To Witness A Twofold Growth During The Forecast Period

Market Overview

Ever-growing motorization and industrialization, coupled with volatility in the prices of petroleum-based fuels and their depleting reserves concentrated in certain regions, have compelled other regions to seek a solution to curb the vast import of crude oil. The emergence of an alternative fuel that can be processed with locally available raw materials such as vegetable oil, biodiesel, and alcohol has provided these regions a means to reduce their dependence on fossil fuel rich nations. With bio-alcohol, every region can become independent and sustainably produce its own fuel as the only requirements for the production of bio-fuels are crops, as compared to the need for scarce natural reserves in the case of petroleum-based fuels.

Segmentation Analysis

Globally, the bio-alcohol market is segmented by type and application.

Based on type, the bio-alcohol market is segmented into bio-ethanol, bio-methanol, bio-butanol, and BDO. Bio-ethanol is a higher-octane fuel alternative and used in applications such as power generation and in trucks, buses, the medical industry, airplanes, and fuel cells. Petrol's life span is diminishing and oil suppliers – in order to ensure greater fuel security globally – are blending petrol with bioethanol. Additionally, bio-ethanol is also considered a great alternative fuel due to its bio-degradability and low toxicity.

Based on application, the bio-alcohol market segmented into transportation, medical, power generation, and others. The transportation segment is expected to register significant growth during the forecast period. According to the Organization for Economics Corporation and Development (OECD), the transport sector contributes one-fifth to the total alternative to fossil fuel, significantly reducing carbon dioxide emission. Vehicles are key consumers of conventional fuels and adopting new and alternative fuels would necessitate modifications. Primary biofuels used in transportation are bio-ethanol and biodiesel. The increasing use of biofuel as an advanced fuel in engines and other systems to improve vehicle performance and efficiency is expected to accelerate market growth.

Regional Landscape

Geographically, the bio-alcohol market is segmented into North America, Europe, Asia Pacific, and Latin America and the Middle East & Africa (LAMEA).

North America is expected to hold a prominent bio-alcohol market share, driven by fluctuating oil prices and the increasing initiatives promoting the use of alternative biofuels. Further, government subsidies over the production of corns have led to an upsurge in the production of ethanol in the region. The U.S. Environmental Production Agency (EPA) has implemented policies such as the Renewable Fuels Standard (RFS2), which required gasoline to be mixed with some amount of liquid fuel, spurring the overall consumption of bio-alcohol in the U.S.

Latin America is likely to witness noteworthy growth in the bio-alcohol market during the forecast period. Factors such as the increasing number of gasoline stations and national biofuel policies for fuel production are spurring ethanol biorefineries in the country. In Brazil, the number of ethanol refineries is increasing. Brazil is the 5th
largest country across the world to import no oil, as half the country's cars run on alcohol fuel from sugarcane, which is grown in 1% of its land.

Asia Pacific bio-alcohol market is likely to witness at a higher rate during the forecast period. This is attributed to increasing usage of bio-based fuels due to their low emission features

According to a European Union directive, biomass is defined as the biodegradable fraction of products, waste, and biological origin residues from agriculture, forestry and related industries. European law assumes that the share of biofuels in the overall consumption of petrol and diesel for transport is expected to reach 10% by 2020.