Second Generation (2G) Ethanol Market Size, Share & Trend Analysis, By Feedstock, By End-Use Industry, By Technology, Regional Stance, Competitive Tactics, and Segment Forecast to 2030

Second Generation (2G) Ethanol Market at a glance:  

This market research report on the global market for 2G Ethanol constructed by the Reports and Insights team intends to address market aspects such as key drivers, challenges, and opportunities for industry participants. Furthermore, it will encompass a regional outlook, market segmentation outlook, and market trends for 2G Ethanol, Market size, and share, industry, and product insights, SWOT analysis, Porter's five forces analysis, PESTEL analysis, heat map analysis, market prediction, and information on the key players active in the market of second generation (2G) ethanol.

2G ethanol is a biofuel that is manufactured from non-food biomass as opposed to first-generation ethanol which is produced with the help of food-based biomass such as corn, soy, and sugarcane. The non-food biomass utilized in the production of 2G ethanol includes corn stover, sugarcane bagasse, municipal waste, perennial grass, and other fast-growing trees. The process for the production of 2G ethanol involves fermenting a non-edible substance called cellulose which is found in the above-mentioned ingredients.

Ethanol, by its first-generation or second-generation, is used mainly as a substitute for petroleum and is also used in several other industries such as pharmaceuticals, personal care items, liquor, etc. The demand for 2G ethanol is on the rise because the raw material and ingredients used in its production are not edible items.

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Scope of Report:

Report Metric 	Report Details 
Market size available for the years 	2021-2030 
Base year  	2021
Forecast Period 	2022-2030 
Segments Covered 	By Feedstock, By End-use Industry, By Technology, and By Region
Regions Covered 	North America  The U.S., & Canada   Latin America  Brazil, Mexico, Argentina, & Rest of Latin America    Asia Pacific  China, India, Japan, Australia & New Zealand, ASEAN, & Rest of Asia Pacific    Europe  The U.K., France, Spain, Italy, Russia Poland, BENELUX, NORDIC, & Rest of Europe    Africa  North Africa, Egypt, & Rest of Africa   The Middle East  GCC Countries, Israel, & Rest of the Middle East
Key Players	Praj Industries, Shell, TruAlt Bioenergy, and among others

Second Generation (2G) Ethanol Market Dynamics:  

Market Drivers: 

“Increasing awareness about harmful effects of greenhouse gases”

The automobile industry is booming in the current stage and more than 95% of automobiles sold today run on traditional gasoline. People are growing concerned about the effect of these vehicles on the ozone layer and thus are growing concerned about the accelerating rate of global warming. Since ethanol is produced effectively through aerobic/anaerobic procedures, the formation of ethanol doesn’t add carbon dioxide to the environment. Additionally, it also limits the amount of CO2 released in the air by the combustion of fossil fuels. This leads to an increased demand for ethanol in the market and thus a push in the demand for 2G ethanol.

“Does not compete for food resources”

First-generation ethanol is being produced at a steady rate around the world. However, the ingredients used for first-generation ethanol are corn, soy, and sugarcane, which are edible items. Since there is a widespread shortage of food in developing and under-developed nations, people want to fulfill the need for hunger eradication before producing ethanol. Therefore, 2G ethanol, which uses non-edible items as raw materials, is in greater demand.

“Promotion of 2G ethanol by governments”

Governments around the world are coming down in support of 2G ethanol. It has attracted a lot of interest from developing nations such as China, India, and Malaysia. India has also launched a policy called PM VI-HAN to give the required initial thrust to the production of 2G ethanol. However, some polices have failed to deliver as well. Overall, the demand for 2G ethanol is bound to go up with support from governments.

 

Market Restraints:

“Inefficient markets and technology”

The market for 2G ethanol is a long way from maturity. People still prefer the lower priced fossil fuel over ethanol-based fuel. This restricts the demand for 2G ethanol. Also, since the first commercial factory for 2G ethanol production opened in 2013, there have been 7 more which have set up till today. Some of these production units are failing whereas some of them are prospering. This shows that the production technology is yet to be perfected.

“A long way for economies of scale”

To be efficient, one production unit must process at least 400 tonnes of biomass in a day. Moreover, the production equipment for 2G ethanol, while still not perfect, is very costly. Thus, venture capitalists and industrialists find this to be very capital intensive. Additionally, whereas the raw materials themselves are not very highly priced, their transportation and collection drive the cost up.

“Trade-offs are still possible”

Although raw materials such as corn stover, municipal waste, switchgrass, etc. do not have any known uses and are generally disposed of by farmers, other raw materials such as sugarcane bagasse are also used in paper-making and electricity generation. This creates trade-offs and thus an opportunity cost is added to the final product.

 

Market Opportunities:

“Ample availability of 2G ethanol raw materials”

Although the process for production of 2G ethanol is not easy, the availability of cheap raw material is helping in making the final product feasible. 2G ethanol requires ingredients such as perennial grass and fast-growing trees which, once planted, grow continuously for 8 to 10 years. Additionally, other raw materials such as corn stover and sugarcane bagasse are by-products which are seldom used. This is driving down the cost of production and thus serves as a great opportunity to compete with traditional fossil fuels.

“Depleting fossil fuels”

Fossil fuels are made over thousands of years by geological processes. The depletion of these fuels is increasing at an alarming rate. People and organizations are exploring other environmentally safe energy options such as solar and wind energy. However, these do not come without drawbacks. This situation provides a great opportunity for the market of 2G Ethanol to prosper

Second Generation (2G) Ethanol Market Segmentation Stance: 

The 2G Ethanol market can be segmented based on the following criteria: 

By Feedstock:

• Agricultural Waste
• Forestry Waste
• Municipal Solid Waste
• Others

By Technology:

• Biochemical
• Thermochemical
• Hybrid

By End-use Industry:

• Liquor
• Petroleum
• Personal Care
• Pharmaceuticals
• Others

By Region:

• North America
• Asia Pacific
• Europe
• Latin America
• Middle East
• Africa

 

Second Generation (2G) Ethanol Market Regional Stance:

North America is leading the race for 2G ethanol production. Out of the 8 production plants worldwide, 4 are in the United States. Moreover, the maximum consumption of ethanol is in the United States which helps match the demand and supply.

Countries in the Asia Pacific such as India, China, Indonesia, and Malaysia are taking interest in ethanol production as well. The target of the Indian Government is to add at least 20% ethanol in petroleum and its products by 2025 and the country aims to become a self-sufficient energy producer by 2047.

Brazil, in Latin America, also has a 2G ethanol production plant and wants to reduce its dependency on fossil fuels. Thus, the scope of expansion in Latin America is wide.