Cellulosic Ethanol Market Forecast 2023 - 2030

By Feedstock :

The feedstock segment is categorized into energy crops, agricultural residues, organic municipal solid waste, forest residue, and others. In 2022, the agriculture residue segment accounted for the highest market share in the cellulosic ethanol market. Agricultural residues include rice straw, wheat straw, rice husk, and corn stover, which are mostly left on the fields after harvests and used for fodder and landfill material or burnt in many places. Forestry residues consist of branches, leaves, bark, and other portions of wood. Agriculture residue has low manufacturing costs, and it is readily available across the globe. Furthermore, the processing of agriculture residue leads to relatively lower greenhouse gas emissions due to which it is getting popular as a most effective and highly available feedstock for cellulosic ethanol production segment growth across the globe. Thus, the high availability and lower cost of conversion of agriculture residue is fostering the revenue growth of the cellulosic ethanol industry during the forecast period.

However, the energy crops segment is expected to be the fastest-growing segment during the forecast period. The use of energy crops for energy production can be beneficial because of their carbon neutrality. It represents a cheaper alternative to fossil fuels while being extremely diverse in the species of plants that can be used for cellulosic ethanol production.

By Process :

The process segment is categorized into dry grind, wet mills, and others. In 2022, the dry grind segment accounted for the highest market share in the overall cellulosic ethanol market and is expected to grow at a high CAGR over the forecast period. The dry grind process has the potential to overcome some of the challenges faced by traditional cellulosic ethanol production methods such as cost efficiency, higher ethanol yield, resource optimization, and lower impact on the environment. The integration of dry grind technology for the manufacturing of cellulosic ethanol production increases production efficiency and potentially reduces overall manufacturing costs. The growth of the dry grind process in cellulosic ethanol is gaining popularity owing to the increasing research and development activities for the optimization of technologies. Hence, the high affordability and acceptance of dry grind process for cellulosic ethanol manufacturing is fostering market growth.

By Application :

The application segment is categorized into industrial solvents, fuel & fuel additives, beverages, chemical additives, and others. In 2022, the fuel & fuel additives segment accounted for the highest market share in the overall cellulosic ethanol market, and it is expected to grow at the fastest CAGR over the forecast period. Cellulosic ethanol is used as fuel & and fuel additives due to its higher octane number and premium blending properties in gasoline. Furthermore, blending ethanol in fuel leads to lower emissions and acts as a fuel stabilizer. Owing to these beneficial properties of ethanol as a fuel additive, government bodies across the globe are promoting ethanol blending in the fuel to lower the overall gasoline prices and increase sustainability in fuels. For instance, in March 2022, the Government of the U.S. announced its plan to increase the addition of ethanol into gasoline to lower the prices. Therefore, such rising initiatives are fostering the demand for cellulosic ethanol for fuel & and fuel additives applications and thereby driving segmental growth.

By End-user Industry :

The end-user industry segment is categorized into transportation, energy, chemicals, and others. In 2022, the transportation segment accounted for the highest market share of 35.55% in the overall cellulosic ethanol market and is expected to hold the highest CAGR over the forecast period. Cellulosic ethanol is a renewable fuel made from various plant materials collectively known as "biomass." Ethanol is used as a fuel and fuel additive in the transportation industry. Gasoline contains 10% ethanol and 90% gasoline. Such a high content of ethanol in gasoline helps to reduce the air pollution caused by vehicle emissions. The increasing government initiatives to increase the blending of ethanol and gasoline to promote sustainability in fuel and reduce the dependency on fossil fuels are driving the segment growth. For instance, according to the report by The Association of French Alcohol Producers, in June 2022, the surge in oil prices accelerated consumption of E85 super ethanol reaching a 53% increase in consumption from May 2021 to April 2022. Furthermore, the number of stations selling E85 has also greatly increased in the country in recent years, rising from 1,015 in 2018 to 2,856 in 2022. Hence, the increasing adoption of ethanol blended fuel across the globe is fostering market growth.

Get More Information

Download Sample Report

By Region :

The regional segment includes North America, Europe, Asia Pacific, Middle East and Africa, and Latin America.

In 2022, North America accounted for the highest market share at 36.10% valued at USD 1,137.15 million and is expected to reach USD 3,462.83 million in 2030. In North America, the U.S. accounted for the highest market share of 64.30% during the base year of 2022 owing to the increasing biofuel production across the region. Cellulosic ethanol is a form of biofuel made from agriculture, forest, and plant residue. The increasing investments in the production of sustainable biofuels across the region are accelerating the cellulosic ethanol market in the North American region. For instance, in January 2023, The U.S. Department of Energy (DOE) today announced USD 118 million in funding for 17 projects to accelerate the production of sustainable biofuels for America's transportation and manufacturing needs. Furthermore, in August 2021, Deputy Under Secretary for Rural Development Justin Maxson today announced that the U.S. Department of Agriculture (USDA) is investing USD 26 million to build infrastructure to expand the availability of higher-blend renewable biofuels by 822 million gallons annually in 23 states in the U.S. Henceforth, the rising initiatives and funding to produce biofuel in the North America region is fostering market growth.

Furthermore, Asia Pacific is expected to witness significant growth over the forecast period, growing at a CAGR of 15.6% during 2023-20230. This is due to the increasing demand for sustainable and renewable energy sources to reduce the dependency on fossil fuels for various applications. Furthermore, in January 2020, Clariant Anhui Guozhen, and Chemtex announced a partnership for the development of a full-scale cellulosic ethanol production plant in China, with an annual production capacity of 50,000 tons. Such initiatives are expected to drive the cellulosic ethanol market growth across the Asia Pacific region over the forecast period.