Ethanol is made by fermenting and then distilling starch or sugar crops such as › sugar-cane, › maize, › sorghum, › wheat and other grains, or › even cornstalks, › fruit and › vegetable waste.

Ethanol (C2H5OH) is a chemical compound that is made up of three basic elements i.e. carbon, hydrogen and oxygen.

This agent has no color and taste but has a distinctive smell and is flammable also.

Also known by the names ethyl alcohol or grain alcohol, is used primarily as a significant ingredient in alcoholic beverages and as a fuel.

Ethanol is also considered as a clean-burning added feature to gasoline.

To produce this chemical, either sugar from the various agricultural crops are fermented or it is produced chemically with the help of ethylene.

Has wide range of uses. Also, the chemical has got some unique physical

properties that makes it even more viable constituent in various other uses.

Ethanol is an easily soluble component, and when mixed with water, it reduces the surface tension of water.

The main demand of ethanol arises from the transport sector as the chemical provides an efficient fuel when mixed with petrol. Countries started using ethanol blended gasoline in vehicles & rockets (Virgin Airlines)

Also, ethanol has been used in the fermented and distilled alcoholic beverages since a long time that include whiskies, brandies, rum, vodka and beers.

Chemicals like nail polish, vinegar, agricultural chemicals etc are also made by using ethanol.

The main ethanol consuming countries are Brazil USA India European Union Japan Mexico China Korea Thailand

Regarding the world trade in the context of ethanol, the major player is European Union as it is the major exporter of the chemical compound.

The leading countries in the ethanol exporters list are European Union United States Brazil China Thailand France South Africa United Kingdom

Production of ethanol involves a complicated and a systematic procedure. As mentioned earlier, ethanol can be produced by two ways either biologically or chemically

Fermentation - The traditional and the most commonly used method of preparing ethanol is the biological method in which the sugars of various agricultural crops like sugarcane, corn, wheat, barley, cassava, rice, grains, sugarcane, sweet sorghum, sugar beet, rye are fermented with yeast. The process of growing yeast to produce alcohol is called brewing. This process is capable of producing only small amounts of ethanol.

Ethylene hydration – This is the second method of producing ethanol in which ethylene is hydrated with the help of an acid catalyst usually phosphoric acid. Charcoal is also an important component that helps in the hydration process and extracting ethanol.

The result of either of the above two processes is ethanol – water mixture that must be purified before use.

The processes of fractional distillation is performed to concentrate the ethanol content and then drying of ethanol is done with the help of lime, salt, molecular sieve etc which brings it to its purest form.

The list depicting the largest ethanol producers of the world with their production figures are

Brazil (3989 million gallons) USA (3535 million gallons) China (964 million gallons) India (462 million gallons) France (219 million gallons) Russia (198 million gallons) South Africa (110 million gallons) United Kingdom (106 million gallons) Saudi Arabia (79 million gallons) Spain (79 million gallons)

4th largest producer of ethanol in the world and the second largest producer in Asia after China.

Utilization rate in the country is usually low. There are very few ethanol plants in India &

many more are proposed to comeup. Most of the plants are located in the states of

› Uttar Pradesh› Maharashtra› Tamil Nadu

International crude price has crossed $100 per barrel.

The world ethanol production has reached to 62.03 Billion liters in 2007 and expected to increase to about 100 Billion liters by 2012.

Indian total ethanol demand is projected to reach 5.920 Billion liters in 2010 at 10% and 5% blending rate of fuel ethanol in gasoline & diesel, respectively.

About 95% distilleries in the country are based on sugar cane molasses.

In India, ethanol is not traded in the commodity exchanges like the other commodities even though the country is a significant player in the world market.

Has got potential of becoming one of major player in the world ethanol market as it has ample capacity to produce the chemical compound almost double of its current produce.

But due to a lower utilization rate, India has to constrain its production level. The current production of the chemical in the country hovers around 460 million gallons annually.

The production of ethanol in the country has been increasing and is estimated to increase further in the future.

The use of ethanol in petrol has proved to be advantageous as it enables a good combustion and that is why, the use of petrol with a min. of 20% ethanol content (E20) by 2017 has been made compulsory by the government.

The country should also focus on exports.

World’s ethanol production will pass 20 Bn gallons in 2012.

Ethanol production is expected to grow in 2008 - 2012 with CAGR about 5%.

U.S. and Brazil are leading the world in production of ethanol.

Emergence of new ethanol producers in Asia and Latin America.

Cuba has the capacity to manufacture as much as 3.2 billion gallons of ethanol annually from its sugar crop.

High oil prices. National energy security

considerations. Ethanol tax incentives. Improved technology - lower costs of

ethanol production. Climate change concerns.

World Ethanol Production Forecast 2008 - 2012 by Country,Millions of Gallons

2008 2009 2010 2011 2012 CAGR, %

Brazil 4,988 5,238 5,489 5,739 5,990 2.8%

U.S. 6,198 6,858 7,518 8,178 8,838 5.7%

China 1,075 1,101 1,128 1,154 1,181 1.4%

India 531 551 571 591 611 2.2%

France 285 301 317 333 349 3.2%

Spain 163 184 206 227 249 6.9%

Germany 319 381 444 506 569 9.7%

Canada 230 276 322 368 414 9.9%

Indonesia 76 84 92 100 108 5.6%

Italy 50 53 55 58 60 2.8%

ROW 2,302 2,548 2,794 3,040 3,286 5.7%

World 16,215 17,574 18,934 20,293 21,653 4.6%

RNCOS has released its Asia Pacific Biofuel Market Forecast, and projected that the global ethanol business would achieve a 14.7 percent compound annual growth rate in market value between 2006 and 2016.

The reports also projects a 26.4 billion gallon global ethanol market by 2014, but projected a compound annual growth rate of 2.51 percent in China for the 2007-2015 period, and 2 percent in India.

In September of 2009 the National Biofuel Policy was proposed in India.

The document states goals, strategies and finacial stimuli to prepare India for the massive use of biofuels.

One of the goals is to blend 20% ethanol into the gasoline mix by the year 2017.

Unfortunately the proposal hasn’t passed throw government yet, however when this will, the Indian biofuel market will exponentially grow.

Product Price Place Promotion People Strategy to find skilled workers in a

tight job market

Fuel Alcoholic Beverage Chemical Constituents of Ethanol Antiseptic Solvent (found in paints, tinctures,

perfumes)

Thank You…By_

Anirudh Pulugurtha,PGDM-BT,

Roll No. (01),Institute of Public Enterprise