Indian Ethanol Market Size Likely to Surpass at a CAGR of 14.5% By 2033

According to current market research conducted by the CMI Team, the Indian Ethanol Market is expected to record a CAGR of 14.5% from 2024 to 2033. In 2024, the market size is projected to reach a valuation of USD 3.1 Billion. By 2033, the valuation is anticipated to reach USD 6.2 Billion.

Indian Ethanol Market: Growth Factors and Dynamics

• Policy and Government Initiatives: The Government of India aims to foster ethanol development, consumer acceptance, and the use of ethanol in the renewable energy context. Therefore, the Government has implemented an Ethanol Blending Program, with a 20% blending target for petrol by 2025. The blending policy is essential to developing a market offering for ethanol, which includes financial incentives and subsidies for both domestic ethanol producers and the domestic consumption of ethanol products.

• Sustainability and Environmental Factors: Climate changes and environmental degradation is calling for firmer sustainable energy options. Ethanol derived from agricultural feedstock, such as corn and sugarcane, is a clean energy option compared to fossil fuels while increasing greenhouse gas emissions and pollution. As more consumers/industries utilize ethanol-blended fuels, this factor will increase the proportion of sustainable energy options.

• Technologies: Advances in ethanol production technology and applied science have improved production economics through better fermentation and feedstock utilization efficiency. Second-generation ethanol production from agricultural feedstock will expand opportunities to produce ethanol from non-food biomass (e.g., agricultural waste), decreasing the food/ethanol consumer conflict while increasing ethanol production feedstock opportunities.

• Investment and Infrastructure: Increased investment in both production and distribution infrastructure will be critical in addressing the increasing levels of ethanol and transport fuel demand for fuel. Investment from the public and private sectors can work together to supplement the construction of ethanol processing facilities and, therefore, eventually, in the logistical area.

Indian Ethanol Market – Mergers & Acquisitions and Investment

Several mergers and acquisitions have been reported in the Indian Ethanol Market in recent years as companies exploit synergies and seek to enhance their position in the market competition. Some noteworthy mergers and acquisitions in the India Ethanol Market include:

• In February 2021, Balrampur Chini Mills purchased additional ethanol production units to substantially increase their ethanol production, diversifying from sugar production into biofuels.

• In June 2021, Shree Renuka Sugars significantly invested in ethanol production and distillation capacity. By 2022, it had established itself as one of the largest producers of ethanol in India. Shree Renuka Sugars increased its capacity by upgrading previous capacities.

• In March 2022, Godavari Biorefineries announced a USD 100 million investment from TPG Rise Climate Fund to expand its ethanol production capacity, focusing on scaling up operations.

Report Scope

Indian Ethanol Market: COVID-19 Analysis

The COVID-19 pandemic has greatly impacted the India Ethanol Market, where some factors have been adversely and positively influential on the industry. Among such influences include the following:

• Pharmaceutical Ethanol demand spur: Pharmaceutical-grade ethanol demand has increased manifold because of the massive consumption of hand sanitizers, disinfectants, and medicinal supplies during the pandemic.

• Government Support Strategies: The Indian government adopted several measures to support the ethanol industry, including easy and fast-track clearances for alcohol-based ethanol and a much greater focus on biofuels to achieve energy security, which benefitted the ethanol industry. The government’s support and actions aimed to stabilize the market and promote recovery post-pandemic.

• Changes in Consumer Preference: The pandemic caused changes in consumer preference toward sustainable and eco-friendly products. Increased conscious health and hygiene and consumer awareness of ethanol components in hand sanitizers and disinfectants have a positive impact on the outlook for orders of components for ethanol-related products.
• Innovation and Adaptation: Faced with the challenges of the pandemic, ethanol producers exhibited an innovation mindset and responded to their production capabilities to meet changing market challenges. For instance, many producers completely changed their production capabilities to produce hand sanitizers and other disinfectants to meet the spike in demand for these products, illustrating the ethanol industry’s ability to adapt to changing market conditions.

• Long-term consequences: While the pandemic created a different mixed bag of consequences in the short term, the long-term consequences for the market based on ethanol attributes would likely see net benefits from a heightened focus on health, hygiene, and sustainability preferences, potentially detracting from purchasing preferences for goods and services partially or fully based on renewable fuels and other products from bio-based feedstocks.

Overall, regarding the demand market for ethanol in India, the COVID-19 crisis had both positive and negative implications for market demand, as demand destruction potential was mixed with various opportunities that could arise from the pandemic.

List of the prominent players in the Indian Ethanol Market:

• Indian Oil Corporation Ltd
• Bharat Petroleum Corporation Limited
• Hindustan Petroleum Corporation Limited
• Balrampur Chini Mills Ltd
• Praj Industries Ltd
• Shree Renuka Sugars Ltd
• Triveni Engineering & Industries Ltd
• Bajaj Hindusthan Sugar Ltd
• Godavari Biorefineries Ltd
• DSCL
• Jain Irrigation Systems Ltd
• Simbhaoli Sugars Ltd
• Others

The Indian Ethanol Market is segmented as follows:

By Source

• Sugarcane-based Ethanol
• Corn-based Ethanol
• Other

By End-Use

• Fuel & Transportation
• Industrial
• Beverages
• Pharmaceuticals

By Purity Grades

• Fuel Grade Ethanol
• Industrial Grade Ethanol
• Pharmaceutical Grade Ethanol