GLOBAL FLEXFUEL MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

The global Flexfuel market size was valued at US$ 93.57 billion in 2024 and is expected to reach US$ 194.27 billion by 2031, grow at a compound annual growth rate (CAGR) of 11% from 2024 to 2031. 

Flexfuel which is also known as flexible fuel vehicles (FFVs), are automobiles with internal combustion engines that can run on more than one fuel and also a mixture. Typically, flexfuel vehicles can operate with a blend of up to 85% ethanol fuel (E85) and 15% gasoline or petrol. The ability of flexfuel vehicles to run on more than one fuel makes them attractive options as they provide fuel flexibility and reduce dependence on gasoline. The key drivers of the flexfuel market include supportive government policies, rising crude oil prices, a growing global automotive market, and decreasing dependence on fossil fuels.

Global flexfuel market is segmented by blend, application, feedstock source, and region. By blend, the market is segmented into E10, E15, E70, E75, E85, ED95, and E100. The E85 segment accounts for the largest share of the market due to its widespread availability and suitability for use in light vehicles. E85 is a blend of 85% ethanol and 15% gasoline and offers reduced emissions as compared to pure gasoline. Growing adoption of E85 globally is driving the growth of this segment.

Global Flexfuel Market Regional Insights

• North America is expected to be the largest market for the global flexfuel market during the forecast period, accounting for over 38.5% of the market share in 2024. The growth of the market in North America is due  to supportive policies, well-established ethanol production, and a large automotive market.
• Europe market is expected to be the second-largest market for the global flexfuel market, accounting for over 25.6% of the market share in 2024. The growth of the market in Europe is due to growing adoption of biofuels and government incentives promoting flexfuel vehicles.
• Asia Pacific market is expected to be the fastest-growing market for the global flexfuel market, with a CAGR of over 16.4% during the forecast period. The growth of the market in Asia Pacific is due to rapidly growing automotive sales and supportive government policies in countries like India, Thailand, and Australia.
• Latin America market is expected to be the fastest-growing market for the global flexfuel market, with a CAGR of over 10.5 % during the forecast period. This growth is due to the significant adoption of flexfuel vehicles in countries like Brazil and Argentina, which have a long history of using ethanol as a transportation fuel.
• Middle East & Africa market is expected to be the fastest-growing market for the global flexfuel market, with a CAGR of over 9 % during the forecast period. The growth of the market in Middle East & Africa is due  to growing adoption of biofuels.

Figure 1. Global Flexfuel Market Share (%), by Region, 2024

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Global Flexfuel Market Drivers:

• Supportive government policies and incentives: Governments across several countries have implemented supportive policies, mandates, and incentives to drive the adoption of flexfuel vehicles. Countries like Brazil, Canada, Thailand, and India have adopted nationwide ethanol blending mandates, ranging from 5% to 27.5%, to expand domestic ethanol markets. Financial incentives including fuel tax reductions and favorable vehicle taxation policies are attracting customers towards flexfuel cars and light commercial vehicles. Such strong government support is propelling the global flexfuel market growth.
• Growing production and adoption of biofuels: Rising production and adoption of biofuels like ethanol and methanol globally is a key factor propelling flexfuel vehicles sales. According to industry estimates, ethanol production reached around 1.86 billion gallons in 2020. As more ethanol gets blended with gasoline, it creates the need for more compatible flexfuel engines. Major biofuel-producing countries are promoting flexfuel vehicle adoption in line with their targets to cut oil imports and reduce emissions.
• Decreasing dependence on crude oil: Surging crude oil prices and import dependence on petroleum in many countries is shifting focus towards alternate renewable fuels like ethanol, methanol, and butanol. Flexfuel vehicles provide freedom from volatility in crude oil markets. The clean fuel diversification offered by flexfuel cars is expected to reduce the overall dependence on gasoline in the automotive sector. This will spur flexfuel vehicle adoption globally.
• Technology innovations in engines and fuel systems: Major automakers are investing in research and development (R&D) to develop improved flexfuel engine technologies that can efficiently operate on any ethanol-gasoline blend. Dual-fuel injection systems, corrosion-resistant fuel system components, and engine control module tunings are some innovations enabling wider ethanol compatibility. As engine and fuel technologies evolve, they will accelerate the adoption of high ethanol blend flexfuel vehicles.

Global Flexfuel Market Opportunities:

• Export otential in developing countries: Many developing countries in Asia, Africa, and Latin America have low vehicle ownership rates, rapidly growing economies, and supportive biofuel adoption policies. This creates significant opportunities for global automakers to enter these untapped markets with their flexfuel models. Launching cost-effective flexfuel cars and light trucks tailored to regional needs can help gain share in high-potential markets. Localization efforts including sourcing feedstocks and setting up flex-fuel plants will also boost exports.
• Transition towards sustainable aviation fuels (SAF): Rising focus on reducing carbon emissions is driving the development of renewable aviation fuels including ethanol and methanol blends that can significantly lower the lifecycle emissions of air transport. This will spur the use of flexfuel vehicles at airports to handle the distribution logistics safely and efficiently. Strategic partnerships between flexfuel automakers, airlines, biofuel producers, and airport operators will accelerate the deployment of flex-fuel vehicles for seamless SAF integration.
• Partnerships for infrastructure development: Flexfuel automakers should pursue strategic tie-ups with fuel retailers and infrastructure providers to jointly fund and develop an expanded network of flex-fuel pumps globally. Well-established partnerships can help share the infrastructure costs, drive greater consumer awareness about station locations through apps, and attract more customers to switch to ethanol-compatible vehicles. The joint development efforts will help unlock the full potential of flexfuel vehicles.
• Innovation in lightweight fuel tanks: Investments in research and development (R&D) to develop advanced lightweight and corrosion-resistant materials for high-volume fuel tanks will help improve vehicle performance, enhance safety, and drive down costs. Lighter weight composite and plastic tanks will improve fuel economy and allow packing of larger, more cost-effective tanks to extend vehicle range in flex-fuel models. Partnerships with chemical/material suppliers will be crucial to develop durable, futuristic tank technologies.

Global Flexfuel Market Trends:

• Product development of flexible fuel additives: Leading fuel additive companies are developing specialized flex-fuel additives that enhance engine performance across wider ethanol blend ranges. Fuel injector cleaners, corrosion inhibitors, lubricity improvers, and combustion catalysts are some additives that optimize engine operation on ethanol blends from E15 to E85. The growing product development focus will improve flex-fuel vehicle performance and drive their adoption.
• Emergence of E85 as a preferred lex-fuel lend: Among various ethanol-gasoline blends, E85 has emerged as the most preferred flexfuel option due to its higher bio-based composition (85% ethanol), capability to reduce emissions significantly as compared to pure gasoline, and availability. Automakers are designing and optimizing engines to maximize performance on E85. Rising E85 production worldwide aligned with government blending targets is reinforcing its position as the foremost flexfuel blend.
• Growth in hybrid flexfuel vehicles: Automotive Original Equipment Manufacturer are combining hybrid and flexfuel technologies to develop environmentally friendly hybrid flex-fuel models. These vehicles allow drivers to run on any blend of ethanol and gasoline and also switch between electric and combustion modes. The hybrid-flexfuel combination enhances fuel efficiency, cuts emissions, and provides greater fuel flexibility. Advancements in hybrid powertrains will spur the launch of more hybrid flexfuel variants.
• Expansion of feedstock production: Diversifying the feedstock sources for ethanol production beyond conventional grains like corn will expand the sustainable production of lower carbon intensity ethanol. Cellulosic feedstocks including crop wastes, grasses, and woody biomass offer new opportunities for large-scale ethanol manufacturing. Partnerships between flexfuel automakers and advanced biofuel producers using innovative feedstocks will strengthen cellulosic ethanol's position as a green fuel.

Global Flexfuel Market Restraints:

• Higher vehicle cost: The additional compatible fuel system components and advanced engine technologies required for flexfuel vehicles entail higher manufacturing costs compared to conventional gasoline-only models. This results in purchasers having to incur a higher upfront vehicle cost, which limits adoption among value-conscious customers. Bringing down the overall vehicle cost through scaled-up production and technology improvements remains a key challenge.
• Low consumer awareness: Despite growing ethanol fuel availability, general consumer awareness about the capabilities and benefits of flexfuel vehicles remains low worldwide. Lack of knowledge about the ease of using and transitioning between gasoline and various ethanol blends is preventing wider adoption.
• Counterbalance: Enhanced educational marketing is essential to inform customers about the favorable economics and eco-friendliness of flexfuel vehicles.
• Inadequate E85 refueling infrastructure: A major constraint hampering flex-fuel vehicle growth is the lack of sufficient E85 refueling infrastructure in many countries. Large upfront investments required setting up separate ethanol storage tanks and pumps at filling stations are a key deterrent.
• Counterbalance: Coordinated efforts between automakers, fuel retailers, and governments are needed to fund and expand E85 infrastructure accessible to flexfuel vehicle owners.

Recent Developments

New product launches

• In January 2022, Archer-Daniels-Midland Company is an American multinational food processing and commodities trading corporation The company is involved in the production of oilseeds, corn, wheat, cocoa, and other agricultural commodities. Archer Daniels Midland Company launched its enhanced VERITASTM ultra-low carbon ethanol solution for cleaner transportation fuels. This new ethanol solution significantly reduces carbon intensity as compared to traditional ethanol.
• In September 2021, DuPont is an American chemical company that was founded in 1802 by French-American chemist E.I. du Pont The company has a long history and has expanded its operations over time, focusing on various industries, including agriculture, electronics, and safety and protection. DuPont announced the commercial launch of their newest enzyme technology, -DuPont’s sustainable solutions for better ethanol (SSBETM). This new enzyme innovation improves the ethanol production process efficiency.

Acquisition and partnerships

• In February 2022, Bunge Limited acquired a corn ethanol plant in the U.S. from Southwest Iowa Renewable Energy. This 120 million gallons per year dry-mill ethanol plant acquisition aligns with Bunge Limited’s strategy to grow its renewable fuels business.
• In June 2021, Archer Daniels Midland Company and Gevo Inc. announced a partnership to produce sustainable aviation fuel by using ethanol and carbon capture. Gevo Inc. is a renewable chemicals and advanced biofuels company that focuses on delivering low-carbon sustainable fuels and chemicals. This partnership combines Archer Daniels Midland Company (ADM’s) ethanol production and Gevo’s expertise in sustainable aviation fuel production.

Figure 2. Global Flexfuel Market Share (%), by Type, 2023

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Top companies in Global Flexfuel Market

• Archer Daniels Midland Company
• DuPont
• BP
• Royal Dutch Shell
• Poet LLC
• Cargill
• Purfresh Inc.
• Andersons Inc
• Aceites Manuelita S.A.
• Abengoa Bioenergy
• Flint Hills Resource
• Raízen
• Valero Energy Corp.
• Green Plains Renewable Energy Inc.
• Bunge Limited
• CropEnergies AG
• Cristal Union
• Darling Ingredients Inc.
• Eco-Energy
• Advanced Bioenergy LLC

Definition: Flexfuel or flexible fuel vehicles are automobiles with internal combustion engines that can operate on more than one fuel, typically a blend of gasoline and ethanol. Flexfuel vehicles provide fuel flexibility and reduce dependence on gasoline. Key applications include passenger vehicles, light and heavy commercial vehicles. The growing shift towards renewable transportation fuels globally is driving demand for flexfuel vehicles. With supportive government policies and advancements in engine technology, the global flexfuel market is poised for robust growth during the forecast period.

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