Bioethanol Market Size, Share, Growth, Trends, and Global Industry Analysis: Size, Share, Growth, Trends, and Global Industry Analysis By Raw Material (Sugar Based, Starch Based, Lignocellulose Based, and Others), Fuel blend (E5, E10, E15 to E70, and E75 to E85), End User (Automotive & Transportation, Power Generation, Food & Beverage, Pharmaceutical, Cosmetics & Personal Care, and Others), and Region Forecast 2020-2031

Bioethanol market size was valued at US$ 82.3 billion in 2024 and is projected to reach US$ 124.6 billion by 2031, growing at a CAGR of 6.1% from 2025-2031. The global Bioethanol production was 112.3 billion litres in 2024 and is projected to reach 163.4 billion litres by 2031, growing at a CAGR of 5.5% from 2025-2031.  Moreover, in the USA, the Bioethanol market size was valued at US$ 27.6 billion in 2024 and is projected to reach US$ 37.2 billion by 2031, growing at a CAGR of 4.5% from 2025-2031. The market demand is mainly due to the increasing demand for renewable and sustainable energy sources. The transportation and automotive sector is majorly driven by it, as bioethanol is a cleaner fuel than fossil fuels. Power generation is a new application that takes advantage of bioethanol's lowered carbon content emissions. There is an application in the food and beverages industry, manufacturing with the assistance of bioethanol. Also, government policies towards utilizing renewable energy and awareness among consumers regarding green options are propelling the market.

However, the market is beset by challenges such as the rising cost of production according to innovative technology and raw materials such as non-availability of lignocellulose in some regions. Variations in crops' yields that influence the availability of starch- and sugar-based raw materials are also hindering factors. Compatibility with mixing fossil fuel with bioethanol is sometimes a problem, even for regular engines. Even though innovation in the enzymatic process, second-generation bioethanol, and enhanced investment in the bio-refinery are promising in growth.

Market trends refer to an increase in bioethanol blends such as E85 to comply with strict emissions standards. Technological advances, including genetically modified enzymes for effective biomass conversion, also impact the market. Circular economy approaches, and the manufacture of bio-based chemicals as by-products are prompting industries to incorporate bioethanol as a critical element in their sustainability plans.

Key Takeaways

• Brazil leads globally with a mandatory 27% ethanol blending (E27) in gasoline, consuming over 30 billion liters annually, driven by its well-established bioethanol infrastructure.
• The U.S. mandates 10% ethanol blending (E10) under the Renewable Fuel Standard (RFS), resulting in an annual consumption of approximately 55 billion liters, contributing to its energy independence and emission reduction strategy.
• China targets 10% ethanol blending (E10) nationwide, requiring around 15 billion liters annually. It aims to balance its energy needs with environmental sustainability efforts.
• India aims to blend 20% ethanol (E20) in petrol by 2025-26, requiring an estimated 10.16 billion liters of ethanol annually. This will showcase the country's commitment to reducing carbon emissions and promoting renewable energy.
• Under the Renewable Energy Directive, the European Union mandates 7-10% ethanol blending, with specific levels varying across member states. This reflects efforts to reduce reliance on fossil fuels and meet environmental goals.

Facts and Figures

• Bioethanol significantly reduces greenhouse gas emissions, with its combustion producing up to 50-60% fewer emissions compared to fossil fuels. It is a renewable energy source derived from crops like sugarcane, corn, and wheat, supporting sustainable agricultural practices.
• Globally, bioethanol production exceeds 100 billion liters annually, with the U.S. and Brazil accounting for over 80% of this volume. Second-generation bioethanol, derived from agricultural residues, is gaining traction, reducing waste and enhancing sustainability.
• Bioethanol blends like E10 and E85 are widely adopted, with E10 alone contributing to 10% of global gasoline consumption. These blends improve engine performance while meeting stringent emission regulations.

Key Developments

• In August 2024, Verbio SE started commercial corn-based ethanol production at its Nevada, Iowa, biorefinery, completing its second U.S. market strategy phase. The plant has a capacity of 60 million gallons of ethanol and 2.3 million MMbtu of RNG annually, marking a milestone in sustainable bioenergy production, per CEO Claus Sauter.
• In July 2023, Indonesia's Pertamina launched E5 gasoline with 5% sugarcane-derived ethanol, reviving its dormant blending mandate program since 2009. Initially available at 15 stations in Surabaya, this move supports Indonesia's goal of producing 1.2 billion liters of ethanol by 2030, boosting sugarcane cultivation and molasses use for ethanol production.
• In February 2023, BBGI inaugurated its Nam Phong 2 bioethanol plant in Khon Kaen province, Thailand. With a daily capacity of 200,000 liters, the facility boosts BBGI's total production to 800,000 liters daily, supporting government policies to promote biofuels and benefit farmers growing energy crops.

Bioethanol Market Segmentation

Based on the Raw Material:

• Sugar Based
• Starch Based
• Lignocellulose Based
• Others

 The sugar-based bioethanol segment drives global production due to the high efficiency of crops like sugarcane and sugar beet in ethanol generation. Prominent in regions with robust agriculture, such as Brazil and India, it supports renewable energy goals and benefits from advancements in crop yields and sustainable agricultural practices.

Based on the Fuel Blend:

• E5
• E10
• E15 to E70
• E75 to E85

The E10 fuel blend segment is a significant contributor to the market, widely adopted in countries like the U.S., where it accounts for approximately 10% of gasoline consumption, translating to billions of liters annually. This blend balances fuel efficiency with reduced emissions, making it a cornerstone of global sustainability efforts.

Based on the End User:

• Automotive & Transportation
• Power Generation
• Food & Beverage
• Pharmaceutical
• Cosmetics & Personal Care
• Others

The Automotive and Transportation segment dominates the market, driven by global adoption of ethanol-blended fuels like E10 and E85. This sector consumes a significant portion of the approximately 200 billion liters of bioethanol produced annually, aligning with emission reduction goals and supporting the transition to cleaner, renewable energy sources.