Industry Trends - Ethyl Alcohol
Trends in the Ethyl Alcohol Industry include the rising demand for ethanol as a biofuel, new and stringent regulations in the transportation of ethanol, increased demand for ethanol in the Asia-Pacific region, increased use of corn as a source of ethanol in Brazil, and the new use of cassava as a source of ethanol in developing countries and China.
RISING DEMAND FOR BIO-FUEL
Recent years have seen the demand for ethanol in the automobile sector drastically increase. This trend has been influenced by climate change and the need for countries to reduce their greenhouse emissions. Ethanol is a clean-burning fuel and refiners add it to fuel to reduce emissions. In the United States, for example, 97% of gasoline contains ethanol and the percentage is said to be higher. The increasing number of automobiles in developing and developed countries has significantly increased the demand for ethanol more so among developed countries. The use of ethyl alcohol has also reduced the dependence of some countries on oil.
Countries like the U.S. have seen an increase in the number of gasoline stations that provide blended ethyl alcohol. There is also a witnessed growth in ethyl alcohol bio-refineries further increasing the alcohol's demand in developed countries.
INCREASED DEMAND FOR ETHANOL IN ASIA-PACIFIC REGIONS
The 2019-2024 period will see the continued dominance of North America in the ethyl alcohol industry. This dominance was to be followed by South America, and the U.S. and Brazil being the major contributors in these continents respectively. However, recent years have seen growth in demand for ethanol in the Asia-Pacific region. This increase has largely been recorded in Western Pacific and South-East Asian countries. The cause of this increase has been attributed to the change in culture in these parts of the world. The demand is directly related to increased alcohol consumption in this region. The medical industry in this region is also showing significant growth with a lot of investor backing of this sector in this region has also contributed to the increased demand for ethyl alcohol in Asia-Pacific.
CORN ETHANOL PRODUCTION INCREASE IN BRAZIL
During the first half of March, Brazil recorded the highest amount of ethanol produced from corn in the country, approximately 52.76 million liters during the two-week period. Corn ethanol production by April 1st of this year reached 754.05 million liters, up from 590.14 million liters during the same period of the previous harvest.
This was a record increase and this is due to the fact that corn is high in starch and starch-based ethanol products are able to reduce greenhouse gas emissions to a larger percentage than other raw materials used to derive ethanol. The expected CAGR for the starch-based segment of ethanol products is 5.8% by the year 2025.
NEW USE OF CASSAVA TO PRODUCE ETHANOL
Developing countries such as Thailand and developed countries such as China are increasing their use of cassava to produce ethanol. This is due to the fact that cassava is highly rich in starch content and the ethyl alcohol produced from this starch has very good anti-knocking properties that are good in fuels and it also consists of a high octane rating.
There will also be a witnessed increase in the use of cellulose-based ethanol in the market. This ethanol is produced from wood chips, corn stover, and fruit peels. This type of ethanol will show the greatest growth in the 2018-2025 period.
STRINGENT REGULATIONS WILL AFFECT SALES
Ethanol is also used for everyday home use for example, as a sanitizer, in household cleaning products, in personal care products, and in many other general uses. However, the alcohol is highly flammable in nature making it a hazard. This also makes its transportation very costly and this can affect sales within the market.
A number of developed countries have regulated and restricted its end-use applications and this has affected the market value of ethyl alcohol.