India Ethanol Market Is Driven By Growth In Railway Freight Transportation

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The India Ethanol Market is primarily driven by the increasing demand from the transportation sector. Ethanol is largely used as a biofuel for vehicles in India. It is blended with gasoline to reduce reliance on fossil fuels and cut down carbon emissions. According to the government mandate, oil marketing companies are required to sell gasoline blended with 10% ethanol throughout the year. This is done to enhance energy security by reducing import dependence. Ethanol blended fuel also aids in improving air quality by decrementing vehicular pollution.

The India Ethanol Market has been evolving at a tremendous pace over the past few years. Ethanol is produced from various feedstock including sugarcane juice, sugar syrup, sugar molasses, maize, damaged grains, surplus grains, and cellulosic materials. It serves as a clean, renewable and affordable biofuel alternative to gasoline. The Indian government has implemented favorable policies and initiatives such as interest subvention, financial assistance, technology upgradation fund, to boost ethanol production capacity from non-food crops. Rising emphasis on utilizing agricultural ...
... residues and waste biomass for generating biofuel has also stimulated growth of the market.

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 Piccadilly 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.

The demand for ethanol in India has witnessed a monumental increase over the recent years owing to the rising blending quotas and improving production capacities. Ethanol blended fuel has emerged as a credible alternative fuel, helping the nation to curb vehicular emissions and satisfy its liquid fuel needs. The Indian government has aggressively promoted the production and utilization of ethanol in light of environmental protection and energy security goals.

The Indian ethanol market has exhibited substantive internationalisation during the past decade with increasing investments and partnership agreements from global producers. Companies are actively pursuing investments and collaborative ventures to establish production plants and distribution networks across major agro-climatic zones of the country. Foreign players are also assisting domestic firms to upgrade technological capabilities and adopt best practices.

Market Drivers

The primary driver fueling growth of the India ethanol market is the rising blending mandates by the government. As per the directives, oil marketing firms are compelled to mix 10% ethanol in petrol throughout India from April 2024 onwards. This is expected to drive ethanol demand up significantly. Furthermore, implementation of favorable policies supporting setting up of new distilleries along with interest subvention, subsidy on molasses and input materials will boost indigenous production capacities over the next few years. Investments in second and third generation technologies aiding use of agricultural waste and lignocellulosic biomass for ethanol fermentation are anticipated to emerge as a key area of focus.

Impact of geopolitical situation on India Ethanol Market growth:

The India ethanol market is currently witnessing significant growth owing to supportive government policies and programs. However, the ongoing Russia-Ukraine conflict is posing challenges and impacting the market growth. Both Russia and Ukraine are major producers and exporters of grains like wheat and corn. The conflict has disrupted the global grain supply chain leading to a sharp rise in food inflation. This is forcing the Indian government to partially divert grains toward food instead of ethanol production to keep prices under control. Lower availability of grains is impacting the supply of feedstock required for ethanol manufacturing. The conflict has also led to rising energy prices globally. As ethanol is made from crops, higher energy costs are increasing production costs for manufacturers. This may constrain capacity expansion plans in the short term. However, ongoing investments in advanced technologies and second-generation biofuel production are expected to help mitigate feedstock supply issues. The government's firm commitment to ethanol blending targets also provides long-term robust growth opportunities for the market.

Geographical regions where India Ethanol Market is concentrated in terms of value:

The India ethanol market is primarily concentrated in the northern and western states in terms of value. Uttar Pradesh, Karnataka, Maharashtra, and Uttarakhand account for over 60% of the total market value currently. This is because these states have established sugarcane belt industries that allow for easy feedstock availability and an abundant supply of molasses - a key raw material used in ethanol production. Uttar Pradesh alone contributes about 25% to the national ethanol production owing to the large number of sugar mills located in the state. Maharashtra comes second due to the availability of both molasses and grain-based distilleries. The concentration is also attributed to the strategic locations of these states that allow manufacturers easy access to domestic and export markets. Going forward, states like Bihar, Madhya Pradesh, and Telangana may witness faster capacity additions to meet future blending targets.

Fastest growing region for India Ethanol Market:

The southern region, primarily Andhra Pradesh and Telangana, is expected to emerge as the fastest growing market for ethanol in India during the forecast period. These states currently contribute only 10-15% to the national production. However, this share is anticipated to increase significantly owing to the governments' aggressive push for second-generation biofuel projects based on cellulosic feedstock like agricultural and forest residues. Both Andhra Pradesh and Telangana have initiated collaborative programs to promote advanced technologies and are offering incentives for investments. Telangana for instance has allocated 15,000 acres of degraded lands for the cultivation of non-food biofuel crops. It plans to commission eight second-generation ethanol distilleries by 2025 with total investment of Rs. 4,800 crores. Projections indicate the southern region's ethanol production capacities may double by 2031 driven by new production facilities coming online. This will substantially boost overall market revenues and make it the fastest expanding regional segment.

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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