2025 China New Edible and Industrial Ethanol Capacity
Introduction: China’s edible and industrial ethanol capacity grew from 2023 to 2024, and it will maintain an upward trend in 2025. When supply exceeds demand, the production profit of fermented ethanol is compressed. Although the capacity of fermented ethanol has shown a downward trend in the past five years, the total capacity of the ethanol industry entered a growth period again due to the increase in coal-based ethanol projects put into production from 2023 to 2025. Affected by the change in capacity, the supply pattern of the edible and industrial ethanol industry will change significantly in the future, and it will still face challenges under full competition, with the market concentration further improving.
The capacity of the edible and industrial ethanol industry first decreased and then expanded from 2020 to 2024.
From 2020 to 2024, the compound annual growth rate of edible and industrial ethanol capacity was 0.93%. From 2016 to 2020, the commissioning of new corn-based ethanol capacity was largely completed, and in the following two years, the eliminated capacity exceeded the new capacity, resulting in accelerated elimination of capacity among small and medium-sized enterprises in the industry due to oversupply, which further lifted the industry concentration. The lowest capacity during 2020-2024 appeared in 2022, while the highest was in 2024. In 2022, amid the poor production profits, the eliminated capacity for fermented ethanol was larger than the new capacity, leading to the lowest capacity in nearly five years. In 2024, several large-scale coal-based ethanol units were put into operation, contributing to a record-high level of capacity for China’s edible and industrial ethanol.
According to SCI, China’s edible and industrial capacity reached 14,791kt/a in 2024, an increase of 1,112kt/a from 2023. Among them, 1,242kt/a of new capacity was added, and 130kt/a of capacity was eliminated, leading to a net increase of 1,120kt/a of capacity. The new capacity involved 7 enterprises, 5 of which adopted the coal-based synthesis process, and the 600kt/a methanol-based ethanol unit in Anhui was the largest in the world.
Judging from the distribution characteristics of China’s edible and industrial ethanol capacity in 2024, the proportion of grain-based ethanol capacity fell, while that of non-grain-based ethanol mounted. This was mainly due to the increase in coal-based ethanol capacity. In 2024, grain-based ethanol capacity accounted for 55.74% of the total capacity, a decrease of 4.12 percentage points from 2023, and coal-based ethanol capacity accounted for 16.21%, an increase of 6.31 percentage points from 2023. At the end of 2024, the new capacity of synthetic ethanol accounted for about 97.37% of the total new capacity of edible and industrial ethanol. The coal-based ethanol capacity put into production in recent years was distributed in Northwest China, Central China, East China and South China, and the distribution was not concentrated. As of the end of 2024, China’s ethanol capacity was still concentrated in the main production areas of grain, and the top three provinces were Henan, Heilongjiang and Jilin, with the capacity accounting for 15.7%, 15.6% and 12.7% respectively.
It is expected that the new capacity of ethanol in 2025 will mostly be put into operation in the second half of the year, with the coal-based synthesis process as the main process.
China’s edible and industrial ethanol capacity will continue to grow in 2025. According to SCI, five sets of units with a total capacity of 1,760kt/a are expected to come on stream before the end of 2025, of which two sets of units are planned to use methanol-based technology. It is expected that by the end of 2025, China’s edible and industrial ethanol capacity will exceed 16,500kt/a.
In 2025, China’s new edible and industrial ethanol capacity is expected to be put into production in the second half of the year, and the specific implementation of the project may also change. In 2025, the supply of coal-based ethanol to the downstream chemical industry and other industrial fields will gradually increase. There are plans to extend the industrial chain to ethyl acetate and other directions for the new capacity, but ethanol produced by most of the new capacity needs to be for outside sales. Therefore, the market competition will intensify due to the supply growth. Combined with the commissioning of new coal-based ethanol capacity in recent years, the output from some capacity may be released until Q1 2026. However, the production profit of fermented ethanol has been obviously squeezed in recent years, so there are no proposed projects. In 2025, sporadic fermented ethanol enterprises may enhance the output of anhydrous ethanol, and there will also be some technical reforms to reduce costs and increase efficiency, as well as slight capacity expansion. Affected by capacity change, the supply pattern of the edible and industrial ethanol industry will change significantly in the future. There are still challenges under full competition, and market concentration will further increase.
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