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Forecast Period
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2019-2029
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Market Size (2023)
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USD 6512.27 Million
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CAGR (2023-2028)
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8.84%
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Fastest Growing Segment
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Bio ethanol
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Largest Market
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North India
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Market Overview
India Ethanol Market has valued at USD 6512.27
Million in 2023 and is anticipated to project robust growth in the forecast
period with a CAGR of 8.84% through 2029. Ethanol is a renewable fuel made
from various plant materials collectively known as "biomass”. Ethanol's
lower carbon intensity compared to conventional fuels has led to a reduction in
carbon emissions, contributing to India's efforts to meet its climate goals. Along
with this, the Indian government's resolute push for ethanol blending in petrol
has been a game-changer. The Ethanol Blended Petrol (EBP) program, which
started in 2003, mandates the blending of ethanol with petrol to reduce
greenhouse gas emissions and promote cleaner fuels. The government's commitment
to achieve 20% ethanol blending in petrol by 2025 has provided a strong impetus
to ethanol production. Moreover, the government's support through incentives,
subsidies, and grants has encouraged investment in ethanol production
infrastructure. These incentives have stimulated the interest of both public
and private entities, resulting in increased capacity and output. Furthermore,
ethanol production provides an additional revenue stream for farmers,
contributing to rural economic development. The promotion of ethanol acts as a
bridge between agriculture and energy sectors, enhancing farmer welfare while
advancing energy security. All these factors contribute to the growth of the India
Ethanol Market in the forecast period.
Key Market Drivers
Rising
Demand for Biofuels for Sustainable Development
In recent years, the world has witnessed
a growing awareness of the pressing need to transition towards sustainable
energy sources, driven by concerns over climate change, dwindling fossil fuel
reserves, and the imperative to mitigate environmental degradation. In line
with this global shift, India has emerged as a frontrunner in adopting alternative
energy solutions, with a particular focus on biofuels as a key component of its
sustainable development strategy. Within the realm of biofuels, ethanol has
gained prominence as a cleaner and greener alternative to traditional fossil
fuels. The rising demand for biofuels, particularly ethanol, in India's pursuit
of sustainable development presents a paradigm shift in the country's energy
landscape. Moreover, India's burgeoning population, rapid industrialization,
and urbanization have led to an exponential increase in energy consumption. The
country heavily relies on imported fossil fuels to meet its energy demands,
making it vulnerable to global price fluctuations and geopolitical
uncertainties. Additionally, the burning of fossil fuels contributes
significantly to greenhouse gas emissions, exacerbating the challenges of
climate change and air pollution. To address these multifaceted issues, India
has committed to ambitious goals outlined in the Paris Agreement, which
includes a significant reduction in carbon emissions and an increase in the
share of renewable energy in its energy mix. To support this agreement, focus
on source of energy that are generated from renewable feed stock such as
ethanol which is a renewable biofuel derived from organic matter such as
sugarcane, corn, and various cellulosic feedstocks, has garnered attention as
an effective way to mitigate the adverse environmental impacts of conventional
fuels by emitting fewer greenhouse gases as compared to traditional gasoline. Therefore,
the increasing demand for biofuels for sustainable development led to the
growth of India Ethanol Market in the forecast period.
Favorable Policies by Government
In the wake of global calls for a more
sustainable and eco-friendly approach to energy consumption, the Indian
government has taken noteworthy strides to promote the production and
utilization of ethanol as an alternative fuel. With a strategic focus on
reducing carbon emissions, decreasing dependency on fossil fuels, and ensuring
energy security, India has put in place a series of favorable policies that
have not only stimulated the growth of the ethanol industry but also positioned
the country as a pioneer in sustainable energy transitions. One of the
cornerstones of India's ethanol push is the implementation of the Ethanol
Blended Petrol (EBP) program. This progressive policy mandates the blending of
ethanol with petrol to reduce the carbon footprint of the transportation sector
and promote cleaner energy consumption. Since its inception in 2003, the
program has undergone significant reforms, culminating in the announcement of
an ambitious target to achieve 20% ethanol blending in petrol by 2025. For
instance, in May 2022, the Indian government launched National Policy on
Biofuels that allow use of surplus food grains for production of ethanol for
blending with petrol with the approval of National Biofuel Coordination
Committee. Moreover, the government has also encouraged the production and use
of Flexible Fuel Vehicles that can run on varying blends of ethanol and petrol.
This move not only boosts demand for ethanol but also provides consumers with
greater fuel choice. Along with this, the government provides subsidiaries and
benefits to the sugarcane producers. Due to various support by the government is
anticipated to drive the demand in the forecast period.
Increasing Demand from Automotive Sector
The automotive sector, a significant
contributor to carbon emissions, is undergoing a remarkable transformation as
the world intensifies efforts to combat climate change and reduce its
environmental impact. In this pursuit, the demand for cleaner and more
sustainable fuel alternatives has gained substantial momentum, with ethanol
emerging as a frontrunner in revolutionizing the automotive industry. The
surging demand for ethanol from the automotive sector is not only reshaping the
fuel landscape but also driving a shift towards a more environmentally
conscious and greener future. The automotive sector has long relied on fossil
fuels, predominantly gasoline and diesel, to power vehicles and facilitate
transportation. However, the drawbacks of these traditional fuels - ranging
from air pollution to climate-altering emissions - are increasingly evident.
Ethanol, a biofuel derived from renewable resources, presents an appealing
alternative due to its potential to significantly reduce greenhouse gas
emissions and enhance energy security. Moreover, in automobile sector, Indian government
passed or introduced different initiatives and policy to promote the use of
ethanol as a fuel in the automobile industry that propels the demand of ethanol
in the country. For example, Indian government launched fuel blended with 20%
ethanol (E20) in phased manner from April 2023 to ensure availability of E20 by
2025. Ethanol is widely used as a fuel additive in gasoline to improve fuel
efficiency, reduce emissions, and improve engine performance. All these factors
dominate the growth of India Ethanol Market in the forecast period.
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Key Market Challenges
Lack
of Awareness
Without awareness and understanding of
ethanol, consumers and industries may not be inclined to adopt it as a fuel
source. This could result in a slower transition from traditional fossil fuels
to more sustainable alternatives like ethanol. In addition, a lack of knowledge
by consumers of the environmental benefits of ethanol blended gasoline, as well
as persistent rumors that it harms vehicle engines, continue to negatively
affect sales of blended petrol.
Limited Availability of Feedstock
Fluctuations in agricultural production,
weather conditions, and seasonal variations can affect the availability and
pricing of the feedstocks like broken rice and maize, along with large quantity
of water requirement by sugarcane industry also creates a problem in the
availability of the feedstock result in hampering the market growth.
Key Market Trends
Expansion
of Production Capacity
India has been making efforts to expand
its ethanol production capacity in recent years. Currently, most of the
country's ethanol production comes from sugarcane molasses and cassava, which
are grown as local crops. India has been attracting investments in new ethanol
plants, with both domestic and foreign investors seeing potential in the
market. By December 2023, the ethanol production capacity for ethanol blending
and other uses is expected to reach 12440 million liters. In January 2023, the
Food Ministry has in principle approved 11 major new ethanol projects under a
new interest subvention scheme. This would help in adding an additional 470 million
liters of ethanol. Out of the 11 projects, 10 are grain-based and one is based
on dual feedstock.
Focus on Green Fuels
The focus on green fuels, including
ethanol, has had a significant impact on the India Ethanol Market. The focus on
green fuels has led to an increased demand for ethanol as a renewable fuel
source. Ethanol is seen as a cleaner and more sustainable alternative to fossil
fuels, and the demand for ethanol has been driven by government policies and
incentives that promote the use of biofuels in transportation. The focus on
green fuels has also led to a diversification of feedstocks used in ethanol production.
In addition to traditional feedstocks such as sugarcane and grains, ethanol
producers are exploring the use of non-food feedstocks such as algal biomass to
produce ethanol. Adoption of green fuels has also led to environmental
benefits, including a reduction in greenhouse gas emissions and air pollution.
Segmental Insights
Type Insights
Based on the type, the bio
ethanol segment is expected to register the highest growth of 15.84% during the
forecast period 2025-2029, on account of the potential to green energy source.
This growth can be attributed as bio ethanol is obtained from different types
of plants rich in cellulose such as sugar cane, sugar beet, or some grains such
as corn. Bio ethanol reduces CO2 emissions, does not generate waste.
Along with that it also reduces dependence on crude oil which leads to the
growth of India Ethanol Market during the forecast period.
Application Insights
Based on the application, the fuel & fuel
additives segment is expected to register the highest growth of 16.66% during
the forecast period, 2025-2029. This can be ascribed due to wide use of fuel
& fuel adhesives in various applications such as fuel tanks, fuselage,
wings, and engine components. Along with that, it provides high resistance to
temperature, pressure, and chemical exposure, as well as excellent bonding
strength and durability. Moreover, ethanol-based fuel and fuel additives offer
a more sustainable and cleaner-burning fuel option, which is becoming
increasingly attractive to consumers and government as well that boost the
growth of India Ethanol Market during the projected period.
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Regional Insights
North
Region Ethanol market will witness fastest growth of 16.65% during the forecast
period 2025-2029. This is because the production capacity of ethanol is very
high as compared to other region as well as in the forecast period a greater
number of production plants will be opened which further increase the
production capacity of the ethanol in the region. Additionally, in many states
of the region such as Uttar Pradesh, Haryana and Punjab adequate quantity of
feed stocks available which further encourage the market player to install huge
number of ethanol production plants that result in contributing to the
expansion of the India Ethanol Market.
Recent Developments
- In July 2023,
the Food Corporation of India (FCI) has sold 1.305 million tonnes of rice for
conversion into ethanol till July 10 in the current marketing year 2022-2023,
earning a revenue of USD 315.20 million. The government has been implementing
Ethanol Blended Petrol (EBP) Programme, wherein oil marketing companies sell
petrol blended with ethanol up to 10%.
- In February 2023, fuels and mobility entity
Jio-bp a joint venture between Reliance Industries and bp announced the
roll-out of E20 blended petrol, a twenty percent blend of ethanol and eighty
percent of fossil-based fuel and become one of the first fuel retailers in
India to make E20 blended petrol available.
- In February
2023, Prime Minister Narendra Modi launched the higher 20 per cent ethanol
blended petrol two months ahead of the planned rollout in April, at the India
Energy Week (IEW) 2023 in Bengaluru.
- In May 2022,
Oil marketing companies including Bharat Petroleum Corporation Limited (BPCL),
Indian Oil Corporation Ltd (IOCL) and Hindustan Petroleum Corporation Limited
(HPCL) have entered into a long-term purchase agreement (LTPA) for upcoming
dedicated ethanol plants across India. As per agreement, ethanol produced by
these dedicated ethanol plants shall be sold to OMCs for blending with petrol
as per the Centre's Ethanol Blended Petrol (EBP) programme.
- In May 2022, Oil marketing companies
including Bharat Petroleum Corporation Limited (BPCL), Indian Oil Corporation
Ltd (IOCL) and Hindustan Petroleum Corporation Limited (HPCL) have entered into
a long-term purchase agreement (LTPA) for upcoming dedicated ethanol plants
across India. As per agreement, ethanol produced by these dedicated ethanol
plants shall be sold to OMCs for blending with petrol as per the Centre's
Ethanol Blended Petrol (EBP) programme.
Key Market Players
- India Glycol Limited
- Triveni Engineering & Industries Ltd.
- Shree Renuka Sugars Limited
- Balrampur Chini Mills Limited
- Dhampur Sugar Mills Ltd
- Bajaj Hindusthan Sugar Ltd.
- Dalmia Bharat Sugar and Industries Limited
- E.I.D.-Parry (India) Limited
- Simbhaoli Sugars Ltd.
- Mawana Sugars Limited
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By Type
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By Raw Material
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By Purity
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By Application
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By Region
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Bio Ethanol
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Synthetic Ethanol
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Sugar & Molasses Based
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Grain Based
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Lignocellulosic Biomass
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Algal Biomass
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Denatured
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Undenatured
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Fuel & Fuel Additives
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Industrial Solvents
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Disinfectant
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Personal Care
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Beverage
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North
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West
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South
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East
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Report Scope:
In this report, the India Ethanol Market has been
segmented into the following categories, in addition to the industry trends
which have also been detailed below:
o Bio Ethanol
o Synthetic Ethanol
- Ethanol Market, By Purity
o Denatured
o Undenatured
- Ethanol Market, By Raw Material:
o Sugar & Molasses Based
o Grain Based
o Lignocellulosic Biomass
o Algal Biomass
- Ethanol Market, By Application:
o Fuel & Fuel Additives
o Industrial Solvents
o Disinfectant
o Personal Care
o Beverage
- Ethanol Market, By Region:
o North
o West
o South
o East
Competitive Landscape
Company Profiles: Detailed analysis of the major companies
present in the India Ethanol Market.
Available Customizations:
India Ethanol Market report with the given
market data, Tech Sci Research offers customizations according to a company's
specific needs. The following customization options are available for the
report:
Company Information
- Detailed analysis and
profiling of additional market players (up to five).
India Ethanol Market is an upcoming report to be
released soon. If you wish an early delivery of this report or want to confirm
the date of release, please contact us at [email protected]