The India ethanol market is primarily driven by the rising usage of ethanol in transportation fuel blending. Ethanol is gaining traction as a biofuel and clean energy source which can help reduce carbon emissions. It is derived from sugarcane and other agricultural residues and offers environmental benefits over petrol. The Indian government has implemented an ethanol blending program wherein oil marketing companies are mandated to blend ethanol with gasoline. This is aimed at reducing import dependence and curbing pollution. Ethanol serves as a strategic fuel diversification option.
India Ethanol Market Size is estimated to be valued at US$ 2.43 Bn in 2024 and is expected to exhibit a CAGR of 15% over the forecast period 2024-2031.
Key Takeaways
Key players operating in the India ethanol market are Piccadily Sugar & Allied Industries Ltd., Thiru Arooran Sugars Ltd., Ugar Sugar Works Ltd., Dhampure Speciality Sugars Ltd., Praj Industries, Triveni Engineering & Industries Ltd, E.I.D. Parry (India) Ltd., DCM Shriram Ltd., Mawana Sugars Ltd., Uttam Sugar Mills Ltd., Kothari Sugars And Chemicals Ltd., Avadh Sugar & Energy Ltd., The Ugar Sugar Works Ltd., Dwarikesh Sugar Industries Ltd., K.M.Sugar Mills Ltd., Shree Renuka Sugars, Balrampur Chini Mills Ltd., Bajaj Hindusthan Sugar Ltd., Dalmia Bharat Sugar and Industries Ltd., Dhampur Sugar Mills Ltd. Growing production capacities of these companies is anticipated to meet the rising demand.
The demand for ethanol is increasing from the transportation fuel sector to meet the government mandated blend targets. Oil marketing companies are procuring more volume each year to supply fuel stations across the nation. Various states have also implemented higher blend targets above the national mandate to boost usage of renewable fuel.
New technologies are emerging for higher and cheaper production of ethanol from cellulosic material. Companies are investing in research and development of advanced processes like enzymatic hydrolysis to lower costs and increase output. Some players have initiated projects based on agricultural waste feedstock. This will further support market growth.
Market Trends
Increasing focus on Second Generation Technologies - With a view to reduce dependency on sugarcane juice and molasses, emphasis is being given to utilize agricultural residues like rice and wheat straws. Players are investing in technologies like biochemical and thermochemical conversion processes.
Rising Co-generation - Ethanol plants are increasingly adopting cogeneration to produce steam and power from bagasse. This helps maximize resource utilization and boost profits. Some units export excess electricity to the grid under framework by regulatory bodies.
Market Opportunities
Project under EBP Programme - The government's Ethanol Blended Petrol Programme provide opportunities for companies to set up new plants especially in states with surplus agricultural biomass. Over 180 projects with capacity of 325 crore litres have been approved so far.
Higher Blend Targets - Some states like Punjab, Haryana, Maharashtra have mandated E20 blend while the Centre is planning to raise ethanol blend to 20% at the national level by 2025. This presents scope to invest in capacity additions.
Impact of COVID-19 on India Ethanol Market
The outbreak of COVID-19 pandemic had a significant impact on the India ethanol market during 2020-2021. The nationwide lockdowns imposed by the government led to disruptions across various industries and supply chains. This caused a steep decline in demand and production of ethanol in the country during the period. Distilleries and sugar mills had to either shut down or operate at highly reduced capacities due to labor shortages and lack of raw material supply. Ethanol blending program by OMCs remained stalled and off take from them reduced substantially. Exports also witnessed a major fall.
However, post lockdowns and as unlock measures were implemented, the market has started recovering gradually. Demand from fuel and chemical sectors has picked up and is reaching near pre-pandemic levels. OMCs have resumed ethanol blending program and are procuring higher quantities to achieve EBP targets. Several policy reforms and stimulus initiatives unveiled by the government have boosted investor sentiment and production capabilities. Distilleries and sugar mills are operating at optimal levels with implementation of safety protocols. Projects under the EBP have been expedited and upcoming seasons are expected to see record ethanol supply. Rising gasoline usage and international fuel demand will further aid growth in coming years.
Some key strategies that need to be adopted for sustaining growth include enhancing raw material capacities, technological upgradation, forward integration, ensuring seamless supply chains and focusing on exports. Financial support from government and expansion of EBP program will help the industry strengthen its position in post COVID scenario over long term.
Geographical Regions with Highest India Ethanol Market Value Concentration
The northern and western states account for over 70% of the total ethanol market value in India. Uttar Pradesh has the highest share concentrated, valued at an estimated US$ 600 million in 2024 primarily due to large sugar production. States like Uttar Pradesh, Maharashtra, Karnataka and Gujarat collectively generate maximum demand from fuel, chemicals and potable segments. Abundant availability of raw material sugars and presence of major distilleries in these regions attract significant investment and production activities. The upcoming policies and blending mandates are further likely to promote establishment of new projects, increasing value contribution from these geography strongholds.
Fastest Growing Region in India Ethanol Market
The southern region represents one of the most vibrant high growth pockets for India's ethanol industry. States like Tamil Nadu, Andhra Pradesh and Telangana have witnessed rapid capacity expansions and new plant additions in recent years. Robust supply of molasses from the sizable sugarcane crops and investments into distillery infrastructure have been the key growth drivers. The encouragement of biofuels by local governments and availability of unutilized feedstocks have boosted investor confidence. The region is estimated to expand at a CAGR of over 20% till 2031, making it the fastest growing for ethanol market in India. Continued focus on developing integrated biorefineries will aid sustaining this momentum.
What Are The Key Data Covered In This India Ethanol Market Report?
:- Market CAGR throughout the predicted period
:- Comprehensive information on the aspects that will drive the India Ethanol's growth between 2024 and 2031.
:- Accurate calculation of the size of the India Ethanol and its contribution to the market, with emphasis on the parent market
:- Realistic forecasts of future trends and changes in consumer behaviour
:- India Ethanol Industry Growth in North America, APAC, Europe, South America, the Middle East, and Africa
:- A complete examination of the market's competitive landscape, as well as extensive information on vendors
:- Detailed examination of the factors that will impede the expansion of India Ethanol vendors
FAQ’s
Q.1 What are the main factors influencing the India Ethanol?
Q.2 Which companies are the major sources in this industry?
Q.3 What are the market’s opportunities, risks, and general structure?
Q.4 Which of the top India Ethanol companies compare in terms of sales, revenue, and prices?
Q.5 Which businesses serve as the India Ethanol’s distributors, traders, and dealers?
Q.6 How are market types and applications and deals, revenue, and value explored?
Q.7 What does a business area’s assessment of agreements, income, and value implicate?
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