The global industrial alcohols market size was valued at US$ 180.75 Billion in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 10.2% from 2023 to 2030. The global industrial alcohols market is expanding globally owing to growing demand from transportation and aviation industries. The growth of the transportation sector is largely driven by the growing popularity of automobiles. This has led to a rise in the use of ethanol as fuel for vehicles. Ethanol is safer for the environment than gasoline and diesel fuels because it produces fewer hazardous chemicals. Moreover, it is less corrosive and increases the lifespan of vehicle engines.
Global Industrial Alcohols Market: Regional Insights
Based on geography, the global industrial alcohols market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.
North America is expected to hold a significant in the global industrial alcohols market. The growing usage of ethanol as fuel is driving the market growth. Additionally, increasing production of automobiles is again encouraging growth of the market.
Asia Pacific is another major market for industrial alcohol owing to the economic expansion and urbanization. This is creating high demand for cosmetics and other personal care products. The region is also a major producer of sugarcane and cereal crops, which are the primary sources for ethanol production. The production of ethanol in the region is further boosted by government-mandated ethanol fuel standards.
Figure 1. Global Industrial Alcohol Market, By Region 2023
Global Industrial Alcohols Market Drivers:
Growing demand for biofuel is anticipated to foster market growth
The industrial alcohols market is primarily driven by rising demand for ethanol as transportation fuel. This is attributed to the growing demand for eco-friendly products. Additionally, the demand for ethanol-based octane enhancers in gasoline is again driving the market growth. Moreover, shortage of petroleum along with the increasing prices is again driving demand for biofuel. The production of biofuel is projected to reduce the reliance on imported petroleum.
Wide application of industrial alcohols in various industries to propel market growth
Ethyl alcohol is the most popular product among all industrial alcohols and is used in a wide variety of applications such as cosmetics, food and beverages, pharmaceuticals, cleaning, and automotive. It is also used as an octane enhancer in gasoline, reducing emissions and improving engine performance. Isopropyl alcohol is another type of industrial alcohol that is used in a variety of applications. It is used in the production of perfumes and other chemicals such as solvents. It is also used as a disinfectant and sanitizer. Moreover, the paint industry also uses highly proofed isopropyl alcohol for making paints that stay bacteria-free and have a longer life than other types of paints.
Global Industrial Alcohols Market Opportunities:
Advent of new technologies owing to the ongoing research and development activities is expected to provide significant growth opportunities. The emergence of newer technologies is projected to drive the growth of the industrial alcohols industry. One such technology is the lactic acid conversion process in which bio-based acrylic acid is produce by using renewable feedstock. The acrylic acid produced by this process is a sustainable substitute for petroleum-based polymers. It is also useful as a substitute for methyl methacrylate, which is an important raw material used in the production of acrylates. Hence, the lactic acid conversion process is an environmentally friendly alternative to traditional methods.
Growing awareness regarding the benefits of industrial alcohols is expected to offer additional market growth opportunities. Ethanol is the most common and widely used of all industrial alcohols. The alcohol is produced by fermenting a mixture of carbohydrates such as sugar, corn or starch. It is a highly effective fuel for automobiles, and can also be used as an industrial solvent. However, it is highly flammable and toxic substance, and ingesting as little as 10 ml can cause permanent blindness. As such, the alcohol is regulated and requires authorization for its usage.
|Base Year:||2022||Market Size in 2022:||US$ 180.75 Bn|
|Historical Data for:||2018 to 2021||Forecast Period:||2023 to 2030|
|Forecast Period 2023 to 2030 CAGR:||10.2%||2030 Value Projection:||US$ 391.99 Bn|
BASF SE, BIRLA SUGAR, CARGILL INCORPORATED., CRISTALCO, FLINT HILLS RESOURCES, GREEN PLAINS INC., GREENFIELD SPECIALTY, MGP INGREDIENTS INC., SIGMA ALDRICH, and THE ANDERSONS INC.
|Restraints & Challenges:||
Global Industrial Alcohols Market Trends:
Growing hygiene and wellness trend
In addition to its use as a solvent, industrial alcohol can be used in the production of hand sanitizers, detergents and other products. The global demand for disinfectant products soared during the outbreak of COVID-19, as they were important to protect against infection and clean hands. The growing need for such products is projected to augment market growth over the next few years as well. Industrial alcohols are also used in the production of preservation agents, insect repellents, antibacterial and disinfectant solutions, adhesives and coatings and paints.
Growing trend of western culture is creating demand for alcoholic beverages
Ethyl alcohol is a common ingredient in the manufacturing of alcoholic beverages. This process is performed by adding yeast and bacteria to the molasses. The fermentation process takes place inside the cells of these microorganisms, which produces ethyl alcohol or isopropyl alcohol. These alcohols are then distilled to produce the finished product.
Global Industrial Alcohols Market Restraints:
Volatile price of raw materials to hamper market growth
Fluctuating prices of raw materials are hindering growth of the industrial alcohols market. Most of the alcohols used for manufacturing are produced from biomass feedstocks, such as molasses, corn or fossil fuels. Any fluctuation or gap in production of these materials can leads to volatility in price of final product, thereby hampering market growth.
Environmental risk associated with the use of alcohol to restrict market growth
Both ethanol and isopropyl alcohol are flammable. This means they should be stored carefully and not be allowed to come into contact with any flammable materials. Moreover, if the alcohol is accidentally spilled, it can cause a fire hazard so it must be cleaned up immediately. In order to reduce the environmental impact, some manufacturers are experimenting with different production methods such as using renewable feedstocks, while others are looking for ways to increase energy efficiency and the sustainability of existing processes.
Figure 2. Global Industrial Alcohol Market, By Type 2023
Global Industrial Alcohols Market Segmentation:
The global industrial alcohols market report is segmented into type, application, processing methods, source, and geography
Based on type, the market is segmented into Isopropyl alcohol, methyl alcohol, ethyl alcohol, isobutyl alcohol, benzyl alcohol, and others (pentanol and methyl-1-butanol). Out of which, ethyl alcohol is expected to dominate the global market over the forecast period. Ethyl alcohol (ethanol) is the most common type of industrial alcohol, which is produced from molasses and other agricultural products through a biological process called fermentation. The production of ethanol has grown rapidly due to its use as an alternative fuel for cars and trucks. Additionally, it is useful for the production of cellulose fibers and other biodegradable plastics.
Isopropyl alcohol segment is also expected to witness significant growth in the near future. It is very effective at killing germs, and is commonly found in hospitals. It works by breaking down the proteins and DNA that germs need to survive. It can also dissolve the fat and protein that make up a germ's protective outer layer.
Based on application, the market is segmented into Fuel, Chemical Intermediates & Solvent, Pharmaceuticals, Personal Care Products, Food Ingredients, and Other Applications (Adhesives and Coatings). Out of which, Chemical Intermediates & Solvent is expected to dominate the global market over the forecast period and this is attributed to the fact that alcohol is an important raw material in the production of various chemicals that are widely used as pharmaceuticals and personal care products
Fuel segment is also expected to witness significant growth in the near future and this is owing to the growing need for alternative fuels and government initiatives to reduce carbon emissions.
Based on processing methods, the market is segmented into Fermentation and Synthetic. Out of which, Fermentation is expected to dominate the global market over the forecast period. Ethanol can be produced from the fermentation of molasses, which is a waste product of sugarcane production, or by the hydration of ethylene.
Synthetic segment is also expected to witness significant growth in the near future.
Based on source, the market is segmented into Molasses, Sugar, Grains, Fossil Fuels, and Other Source (Whey and Grapes). Out of which, Grains is expected to dominate the global market over the forecast period. The main raw materials for industrial alcohol production are sugar crops such as cane or sugar beets and grain crops such as corn (maize).
Fossil Fuels is also expected to witness significant growth in the near future. Other major sources of alcohols are petroleum and ethylene from hydration.
Global Industrial Alcohols Market: Key Developments
In December 2022, TRDP Group which makes Mario biscuits and Raj Niwas pan masala expects its new alcohol business to generate â¹100 crore of revenue by FY24
In March 2023, CaSa de Spirits Pvt. Ltd, launches its first ever range of spirits under the ‘Fentiro’ brand on December 1st, 2022 in Goa
In March 2022, Sakurafresh Beverage and Food, a Japan headquartered global beverage and food company has recently launched its world-acclaimed and awards winning range of Zero Alcoholic spirits and liqueurs in India.
Global Industrial Alcohols Market: Key Companies Insights
The global industrial alcohols market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis. Some of the key players in the global industrial alcohols market are BASF SE, BIRLA SUGAR, CARGILL INCORPORATED., CRISTALCO, FLINT HILLS RESOURCES, GREEN PLAINS INC., GREENFIELD SPECIALTY, MGP INGREDIENTS INC., SIGMA ALDRICH, and THE ANDERSONS INC.
*Definition: Industrial alcohols act as a reagent and solvent in various applications in the pharmaceutical, personal care, food industry, and energy sector. They are produced through fermentation of sugars from corn, wheat, molasses, and sugar cane. Moreover, industrial alcohols are also used as an alternative fuel in automotive engines. In addition, they are used in the production of several chemical intermediates.