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Global ethanol market: the big players in the ethanol supply chain

3 minutes
Joris Djojokarso

Global ethanol market: the big players in the ethanol supply chain

Ethanol is a commodity that is produced and traded globally; the diverse amount of raw materials that ethanol can be made out of makes it especially easy to produce in any part of the world. Nevertheless, countries’ agricultural and (socio-)economic considerations make some of them turn into the biggest players in the ethanol industry. Which countries are currently at the forefront of ethanol production and export? And which countries are the aspiring ethanol export powerhouses of the future?

Brazil - the sugarcane empire

When talking about ethanol, you cannot come around Brazil: Together with the US, it makes up more than 80% of the world’s ethanol production. The country derives most of its ethanol from sugarcane. While much of it is used as a biofuel in the country, it is also exported worldwide to various other markets and industries. In order to stay on top of the market, Brazil has been scaling up its ethanol production through the use of other raw materials, namely corn and molasses.

The prosperous US corn market

The United States are the biggest user, producer, and exporter of ethanol. It derives ethanol mainly from corn, which is a highly established feedstock and raw material in the US due to the local weather conditions. The country is constantly expanding their market reach, recently by establishing ties with countries that increase their ethanol consumption but don’t have the land mass to produce their own. Examples include the Philippines, Malaysia, and Vietnam.

A united effort - EU ethanol

While the need for fuel ethanol scales down in some EU countries, ethanol production is continuing to grow due to its use in other sectors such as industry, food and beverage, and pharmaceuticals. Most EU ethanol uses grain, specifically wheat, due to its wide availability in countries like Germany and France.

Asia - the present and future of ethanol production?

The Asian continent is home to two well-established and growing ethanol markets: China and India are in the top 5 ethanol producers and exporters worldwide, with India expected to overtake China in production volumes per year. While China’s top-producing ethanol companies use corn and wheat for the distillation, India’s climate allows for a high production of sugarcane. Furthermore, India’s government roadmap focuses on the expansion of ethanol exports by using other raw materials like rice to increase production volumes.

The future of ethanol production

The importance of ethanol in the evergrowing, environmentally-conscious industry creates many new emerging producers, several of them in Asia and Africa: South Africa’s growing, but limited ethanol production could be challenged by other African countries such as Zambia and Nigeria due to its abundance in land and suitable climate. However, with the world’s ethanol production giants Brazil, the US, China, the EU, and India continuing to solidify their position in the market, the creation of geographic niche markets is more likely a choice for new players than the overtake of the former.