Saudi Arabia Ethanol Market

Saudi Arabia Ethanol Market Overview:

The Saudi Arabia ethanol market size reached USD 646.11 Million in 2024. Looking forward, IMARC Group expects the market to reach USD 1,032.57 Million by 2033, exhibiting a growth rate (CAGR) of 4.8% during 2025-2033. Rising demand for bio-based chemicals, increasing industrial solvent usage, and government efforts toward fuel diversification are some of the factors contributing to Saudi Arabia ethanol market share. Growth in pharmaceuticals and cosmetics, along with supportive regulatory frameworks and expanding manufacturing sectors, further bolsters market development.

Saudi Arabia Ethanol Market Trends:

Industrial Demand Drives Ethanol Imports Amid Limited Domestic Production

In Saudi Arabia, the ethanol market is witnessing rising demand across the pharmaceutical, personal care, and chemical manufacturing sectors. However, the country lacks significant ethanol production capacity due to water scarcity and limited availability of feedstock like sugarcane and corn. This has led to a reliance on imports, particularly from the US and Brazil, to meet industrial needs. Ethanol’s role as a solvent and disinfectant in personal care products has been crucial, especially after the pandemic-led hygiene awareness. In parallel, the chemical industry’s growing use of ethanol in downstream products like ethyl acetate and acetic acid supports import growth. There is no major government push for bioethanol blending in fuels, limiting ethanol’s uptake in the energy sector. Pricing remains vulnerable to global commodity shifts, logistics, and regulatory constraints on hazardous chemical transport. While local demand grows steadily, the market’s dependence on imports poses long-term supply stability and pricing concerns. These factors are intensifying the Saudi Arabia ethanol market growth.

Emphasis on Safety Tech in Heavy-Duty Transport

Ethanol is slowly gaining attention in Saudi Arabia as part of broader sustainability efforts under Vision 2030. Though the country remains largely hydrocarbon-dependent, ethanol-based alternatives are being evaluated in niche energy and materials applications. Interest in second-generation bioethanol made from non-edible biomass aligns with the Kingdom’s circular economy goals. Research partnerships and pilot projects are emerging at universities and tech parks to explore ethanol from agricultural residues and municipal waste. Government bodies are exploring potential ethanol blends in transport fuels, though implementation remains in the early stages. Industrial players are also experimenting with ethanol-based green solvents in coatings and cleaning products to reduce VOC emissions. However, economic feasibility, limited biomass availability, and lack of infrastructure for large-scale production remain key barriers. While current ethanol use is still concentrated in pharmaceutical and personal care segments, sustainability-driven investments may redefine ethanol’s market role in the coming decade, provided cost-effective local production pathways emerge.

Saudi Arabia Ethanol Market Growth Drivers:

Increased Need for Biofuels and Alternative Energy

The Saudi Arabian ethanol market is presently led by the growing demand for biofuels and alternative renewable energy sources. The government is actively diversifying the energy mix, with the aim of lowering the reliance on conventional fossil fuels. As the world moves towards sustainable and green energy options, the demand for biofuels such as ethanol is consistently rising. Saudi Arabia is also investing in renewable energy systems, such as solar and wind energy, to follow the international environmental agenda. For instance, in 2024, Saudi Arabia launched five solar power plants with a total capacity of 3,751 MW, increasing the nation’s overall installed solar capacity to 6,151 MW, as reported by the General Authority for Statistics. These initiatives are causing an enhanced focus on the production of ethanol as the country focuses on ensuring energy sustainability. The increased global focus on the environment is also being seen with regard to the demand for cleaner fuels, including ethanol, which is also being seen as a cleaner fuel option compared to gasoline. Therefore, this trend is propelling the establishment of local ethanol production, strengthening the market and attracting investors and regional stakeholders.

Government Policies Favoring Sustainable Fuel Production

Saudi Arabia government is already backing sustainable production of fuel through policies and programs designed to curb carbon emissions. The government, under the Saudi Vision 2030 initiative, is encouraging the development of alternative energy sources, including ethanol, as part of an overarching strategy to diversify the economy away from oil reliance. These efforts are incentivizing the development of the ethanol market by providing incentives for renewable energy projects, such as subsidies to ethanol production facilities and advanced biofuel technology research. The government is also actively involved in developing a regulatory framework to enable the production of cleaner, sustainable fuels such as ethanol. With the government insisting on environmental reforms, policies are increasingly favorable to the production of sustainable ethanol, and this is encouraging investment in the industry. These actions are keeping the Saudi Arabia ethanol market profitable and inviting for domestic and global players. In 2025, Multiple Saudi firms, such as the major utility ACWA Power and a branch of oil behemoth Aramco (2222.SE), signed power purchase agreements for clean energy initiatives with a capacity of 15 gigawatts and funding estimated at approximately $8.3 billion.

Growing Investments in Agriculture and Biotechnology

The ethanol market in Saudi Arabia is witnessing an upsurge with the increasing investments in biotechnology and agriculture sectors. The government is also placing more emphasis on enhancing agricultural efficiency and sustainability, which is a key component in biofuel production, such as ethanol. Saudi Arabia's drive to enhance agricultural yields through the application of sophisticated biotechnology is presently making it simpler to derive biofuels from domestic crops and organic waste. This is decreasing the dependency on imported ethanol, thereby encouraging local manufacturing. Funds are also being directed towards research and development to increase the yield of crops used in ethanol manufacturing, including sugarcane and corn. These biotechnological developments are making the process of ethanol manufacturing more efficient and less costly overall, adding to the increasing market. As the farm industry continues to grow and develop, the supply of raw materials used in ethanol production is increasing, further supporting the potential for the market's growth. IMARC Group predicts that the Saudi Arabia biotechnology market is projected to attain USD 11,604 Million by 2033.

Saudi Arabia Ethanol Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the country and regional levels for 2025-2033. Our report has categorized the market based on type, raw material, purity, and application.

Type Insights:

• Bio Ethanol
• Synthetic Ethanol

The report has provided a detailed breakup and analysis of the market based on the type. This includes bio ethanol and synthetic ethanol.

Raw Material Insights:

• Sugar and Molasses
• Cassava
• Rice
• Algal Biomass
• Ethylene
• Lignocellulosic Biomass

A detailed breakup and analysis of the market based on the raw material have also been provided in the report. This includes sugar and molasses, cassava, rice, algal biomass, ethylene, and lignocellulosic biomass.

Purity Insights:

• Denatured
• Undenatured

The report has provided a detailed breakup and analysis of the market based on the purity. This includes denatured and undenatured.

Application Insights:

• Fuel and Fuel Additives
• Beverages
• Industrial Solvents
• Personal Care
• Disinfectants
• Others

A detailed breakup and analysis of the market based on the application have also been provided in the report. This includes fuel and fuel additives, beverages, industrial solvents, personal care, disinfectants, and others.

Regional Insights:

• Northern and Central Region
• Western Region
• Eastern Region
• Southern Region

The report has also provided a comprehensive analysis of all the major regional markets, which include Northern and Central Region, Western Region, Eastern Region, and Southern Region.

Competitive Landscape:

The market research report has also provided a comprehensive analysis of the competitive landscape. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

Saudi Arabia Ethanol Market News:

• In July 2025: ACWA Power has chosen a consortium of Técnicas Reunidas and Sinopec to head the design of a new green hydrogen facility in Yanbu, Saudi Arabia. The initiative will double the production capacity of the renowned NEOM hydrogen project and represents a further advancement in the nation’s effort to establish itself as a global leader in clean energy, according to Inspenet.
• In July 2025: JBS plans to greatly increase its manufacturing capacity in Saudi Arabia by launching a new production facility in November 2024. The facility in Jeddah symbolizes a $50 million investment and will support JBS's manufacturing of breaded chicken items. The growth is anticipated to generate 500 additional jobs. The company states that the new facility enhances the strategy for increasing value-added production in the area.
• In May 2025, Saudi Arabia explored downstream diversification through joint refinery and petrochemical ventures with India, including two planned integrated complexes. Such petrochemical expansions align with Saudi Arabia's broader strategy to support alternative fuel development and reduce crude dependency. These projects could potentially contribute to future ethanol value chain growth, supporting domestic consumption or exports, depending on the final product slate of the upcoming facilities.
• In April 2025: The Biofuel Company, the first and sole biofuel producer in Saudi Arabia, plans to triple its refining capacity by 2025. Gary Hubbard, SVP Commercial & Operations, informed Zawya Projects that the current expansion at Jeddah and Riyadh will increase the company’s annual Used Cooking Oil (UCO) refining capacity to 36 million litres by 2025.
• In April 2025: Two oil refineries will be built in India as part of Saudi Arabia’s $100-billion investment pledged to the south Asian nation which would cover cooperation in multiple areas, including energy and petrochemicals. The projects, which will be built in partnership with the Indian government, and agreements to enhance cooperation with the world’s biggest crude exporter across various industries were announced on 22 April, during a state visit by Indian Prime Minister Narendra Modi to Saudi Arabia.

Saudi Arabia Ethanol Market Report Coverage:

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Saudi Arabia ethanol market from 2019-2033.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the Saudi Arabia ethanol market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Saudi Arabia ethanol industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.