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Ethanol Explained

Ethanol, with the chemical formula C2H6O, is among the essential chemical compounds used for industrial applications. It is a simple alcohol with properties like being a flammable and hazardous chemical. It is a clear, colourless compound with a distinct soft odour. It can be produced through sugar (employing yeast) fermentation or via petrochemical procedures.

Ethanol is extensively used in a wide array of medical uses, for instance, as an antiseptic and disinfectant. Often, the chemical is used as a chemical solvent for producing natural blends or scientific chemical testing. It is also employed in many industrial production processes. Furthermore, ethanol finds application as an alternate fuel source. In addition, it is used in the automotive industry since it is used for preserving gasoline and similarly contributes to being  the intoxicating agent in multiple alcohol-based beverages, including beer, wine, and distilled spirits.

Making Ethanol

Production of Ethanol relies on the feedstock used. The process is less complex and faster with starch- or sugar-based feedstocks in contrast to cellulosic feedstocks.

Production of Starch and Sugar-Based Ethanol  


One way of producing ethanol is using starch-based crops employing dry- or wet-mill processing. Approximately 90% of ethanol-producing plants are dry mills because they are inexpensive. The Dry-milling process includes grounding corn that is used to make flour which further gets fermented to produce ethanol with the distiller’s grains resulting in carbon dioxide as a by-product.

The Wet-mill plants primarily create corn sweeteners along with ethanol and additional by-products, including corn oil and starch. Wet mills separate starch, protein, and fibre present in corn prior to these components being processed into products such as ethanol.

Production of Ethanol using Cellulosic

Production of ethanol via cellulosic feedstocks such as residue of grass, wood, and crops is a much more complex process in contrast to using starch-based crops—the two primary processes used for cellulosic ethanol’s production: thermochemical and biochemical.

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In the thermochemical conversion method, heat and chemicals are included in a biomass feedstock for making syngas, which is a hydrogen and carbon monoxide mix. The following syngas gets mixed with a catalyst and turned into ethanol, producing other liquid by-products.

In the biochemical method, a pre-treatment is done for the release of hemicellulose sugars which are pursued by hydrolysis used to break down the cellulose into sugars. These sugars are further fermented to form ethanol, and lignin is recovered, being used in producing energy which powers the process.

Ethanol Prices: Market Trend and Forecast

North America

In Q3 of 2022, the prices of ethanol went through mixed market sentiments in the US. As per industry experts, the production of ethanol stayed on the lower side during July. But, the commodity’s demand rose in August as prices of sugarcane and corn followed the upward trend in the domestic market. The expense of producing ethanol climbed in the domestic market as major key players witnessed turmoil to fulfil supply to meet domestic demand. The demand for the product from the downstream, biofuel production and pharmaceutical stayed strong, leading to a price inclination in the US market. Ethanol Suppliers and manufacturers got lesser inquiries for the product from end-user industries leading to a decline in the prices of ethanol in the domestic market. The international market demand was soaring, leading to a rise in domestic prices.


Asia Pacific


During Q3 of 2022, the prices of ethanol went through mixed market sentiments In Asia due to feedstock availability and robust demand outlook. As per the Renewable Fuel Association (US), the government in China imported lesser ethanol from the United States, indicating lower demand from the downstream sector. But ethanol’s demand in China grew by a quarter as the production of biofuel increased. In India, prices for ethanol climbed by more than 3% as the Indian government succeeded in meeting its goal of 10% ethanol-based fuel and is now looking to raise the ethanol quantity. The cost of Ethanol production in Asian countries also rose due to the increasing prices of fuel.




Ethanol prices in the European market dipped during the third quarter of 2022 due to growing fears of the recession and surging prices of natural gas. Owing to high rates of inflation and a lower supply of ethanol, the ethanol demand from biofuel production in the German market stayed under pressure. In Q3, Germany’s North Sea ports underwent a union worker strike that slowed transit and hindered supply. The nation’s crucial ports piled up vessels with less momentum.

Ethanol plays a crucial role in several end-user industries making its procurement critical for companies. Here arises the need for Procurement Resource where our leading industry experts can help businesses with the sourcing of various chemicals and other commodities.


  1. gate io gate io February 27, 2023

    For my thesis, I consulted a lot of information, read your article made me feel a lot, benefited me a lot from it, thank you for your help. Thanks!

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