Cellulosic Ethanol Market

Demand for Renewable Energy Sources to Fuel Growth of the Cellulosic Ethanol Market

The Cellulosic Ethanol Market is valued at USD 5.1 Bn in 2026 and is projected to reach USD 19.1 Bn,  growing at a CAGR of 21% by 2033. Need to consider renewable alternative energy sources such as cellulosic ethanol is largely driven by growing prices of crude oil. With the ongoing political tensions and Russia-Ukraine war scenario, the crude oil prices reached a maximum high in 2022 as Russian crude oil traders claim the absence of potential buyers. Moreover, apart from price hikes, carbon footprint exhibited from crude oil derivatives is much higher as compared to biofuels such as cellulosic ethanol. This factor continues to influence the use of renewable sources of energy, in turn bolstering the growth of the cellulosic ethanol market.

Cellulosic Ethanol Market Growth Spearheaded by Rising Biofuel Demand Worldwide

Demand for biofuels is expected to increase at a higher rate in the years to follow. Following a major decline in 2020 on the back of a significant disruption in the global transportation scenario owing to COVID-19 pandemic, the overall demand for biofuel is now on course to outdo the 2019 market statistics in 2022. For instance, according to International Energy Agency (IEA), the demand for biofuels is anticipated to increase by 28% in the next five years on the global front touching 186 billion litres.

With respect to volume, United States is expected to be at the helm, also mostly driven by the rebound from the slack caused by COVID-19 pandemic. Asia Pacific on the other hand is expected to account for around 30% of new biofuel production by end of 2026. This is mainly attributed towards robust domestic policies coupled growing demand for liquid fuels and an export-driven production. IEA analysis also reflects that recent policies for ethanol in India along with blending biodiesel targets in Malaysia and Indonesia are the main contributors favouring growth of biofuel in Asia. IEA also predicts that India is most likely to become the third largest market for cellulosic ethanol by 2026. That said, growing demand and use of biofuel is expected to give an impetus to the cellulosic ethanol market growth in the years to follow.

Advantages of Cellulosic Ethanol over its Corn-Based Counterpart to Influence Market Growth

Production of cellulosic ethanol from a commercial standpoint, unlike sugarcane and corn, would not hinder food production but is beneficial as it will alleviate pressure on these crops. Albeit it’s higher processing costs, overall pricing of cellulosic biomass is cheaper as compared to the price of fruits and grains. In addition, cellulose being the key component of plants, harvesting the whole plant is economical rather than just seeds or fruit. This can result in an enhanced yield per acre of land. For instance, as compared to corn, ethanol yield from switchgrass (panicum virgatum) is almost twice per acre. Moreover, biomass material required for cellulose production need few inputs, such as herbicides and fertilizers. Also, overall global warming quotient and carbon footprint potential of cellulosic ethanol is significantly lower while the net putout of energy is multiple times higher than that from corn-based ethanol. In this backdrop, advantages associated with the commercial production of cellulosic ethanol over its sugar or a corn-based counterpart is expected to augur well for the cellulosic ethanol market.

Use of Cellulosic Ethanol in Transportation to Boost Market Growth

Use of cellulosic ethanol in transportation applications is poised to increase at a significant rate in the coming years. Combination of low-ratio gasoline and ethanol can be used effectively in conventional engines with spark ignition without carrying out any engine modifications. In addition, hybrid vehicles that can be operated on extremely concentrated mixture are an apt audience for cellulosic ethanol. Moreover, cellulosic ethanol facilitates environmental benefits apropos to carbon emissions. Carbon emissions using cellulosic ethanol as biofuel are significantly lower than those from gasoline.

The U.S. Department of Energy has set a target to replace 30% of gasoline demand by end of 2030 which will translate to around 60 billion gallons of ethanol per year. While corn ethanol is not sufficient to fruition this target, cellulosic ethanol can promise of achieving it while shunning carbon emissions. Cellulosic ethanol can be considered as sizeable substitution for gasoline and can act as a primary solution to domestic transportation fuels. Thus, increasing inclination towards use of gasoline substitutes in transportation is likely to contribute to the valuation of the cellulosic ethanol market in due course of time.

North America Gears Up to be an Opportunistic Revenue Pocket

Developed economies in North America are likely to present potential opportunities for growth of cellulosic ethanol market. This is owing to increased production of cellulosic ethanol in the region coupled with strong government mandates apropos to clean energy. Policies around reduction in carbon and GHG (Green House Gas) emissions such as low carbon fuel standards in California are expected to boost demand for biofuels. In addition, recently signed RFS (U.S Renewable Fuels Standard) as part of amended Energy Bill, has favoured production of biofuel. By end of 2022, RFS targets 36 billion gallons of biofuel production in the country which has scaled up the demand for cellulosic ethanol, apart from its corn-based counterpart. This factor continues to influence growth of cellulosic ethanol market in the region, making it a lucrative revenue pocket.

Few of the players in the cellulosic ethanol market include 

• POET DSM Advanced Biofuels
• DuPont / DuPont Industrial Biosciences
• GranBio
• Abengoa Bioenergy
• Beta Renewables
• Clariant International Ltd.
• BlueFire Renewables Inc.
• Fiberight LLC
• Enerkem Inc.
• Ineos Bio / INEOS AG
• Borregaard ASA
• COFCO Corp.
• Green Plains Inc.
• Iogen Corporation
• Orsted AS

End Market

• Automotive
• Chemical
• Energy

 Application

• Transportation Fuel
• Industrial Chemicals
• Power Generation

 Feedstock Type

• Woody Biomass
• Non-Woody Biomass

 Production Process

• Enzymatic Hydrolysis
• Acid Hydrolysis
• Thermochemical Conversion

Region

• North America
• Latin America
• Europe
• Asia Pacific
• Middle East and Africa