A European Directive from July 2006 required European countries to accept the sweetener within 18 months, with February 15 2008 being set as the deadline.
Erythritol naturally occurs at low levels in many fruits and at higher levels in fermented foods such as soy sauce, cheese, wine and beer.
It contains a variety of benefits, including low-calorie content, low GI index and a low laxative effect.
Expected popularity John Madden, ingredients account manager at Euromonitor, said: "As a natural sweetener, erythritol is in a position to take advantage of the interest in natural ingredients.
It should be able to establish its own position in the European sweeteners market."
Euromonitor predicts European consumption of the sweetener will grow following adoption of the directive.
It found that Eastern European consumption in 2006 equalled 2,420 tonnes, which increased to 2,544 tonnes in 2007.
It predicts it will increase to 2,666 tonnes in 2008.
For Western Europe, it rose from 5,308 tonnes in 2006 to 5,391 tonnes last year, and is expected to rise to 5,467 tonnes this year.
It found that the UK has used the sweetener the most, with erythritol consumption reach 1,157 tonnes in 2008 from 1,102 tonnes this year.
It predicts a similar increase for most EU countries.
However, for France, Germany and the Netherlands, it predicts consumption will drop slightly.
Erythritol manufacturers Swiss-based Jungbunzlauer, a producer of natural and nature-identical biodegradable ingredients, claims to be ther only company currently able to produce the sweetener in Europe.
Ferid Haji, product manager, said: "Erythritol has the ability to fill a gap, offering a beneficial sweetener under the hat of being a natural product."
The sweetener was approved in the United States and given GRAS status in 1997, and used widely in Japan since 1990.
US-based Cargill has been producing the sweetener, branded Zerose, for international use since the 1980s, and played a key role in pushing forward European regulatory approval for erythritol for more than 10 years.
"Today's consumers have very high expectations of the food they eat, both in terms of healthy ingredients and great taste," said Henry Hussell, head of marketing for health and nutrition.
"Food manufacturers now have a new opportunity to meet those expectations with Zerose erythritol, thanks to this latest regulatory development."
Applications This natural sweetener demonstrates many valuable characteristics for food manufacturers wanting to meet the demand for healthy yet indulgent items.
It contains less than 0.9 kJ per gram (less than 0.2 kcal per gram) and has been shown to display a higher digestive tolerance, having a low laxative effect.
As it is not fermented in the oral cavity, erythritol is said to be toothfriendly, carrying an accreditation from Toothfriendly International.
Furthermore, it has a very low glycemic index and does not raise blood glucose or insulin levels, therefore serving as a useful sugar alternative for the growing number of people with diabetic and pre-diabetic conditions.
Erythritol can be used on its own, or in conjunction with higher intensity sweeteners in a wide range of low-calorie indulgence foods, including bakery items, dairy-based desserts and confectionery items.
In Japan, it is mainly used in non-caloric drinks for adding smoothness and mouthfeel, while also masking off-tastes from high intensity sweeteners.
The low solubility of erythritol provides it with excellent crystalline and powder properties, making it an ideal replacer when the crystalline structure of sucrose is essential.
Non-caloric and non-cariogenic chewing gum can be formulated by using solely erythritol at levels of up to 60 per cent.
The high negative heat of solution of erythritol gives the chewing gum a pleasant cooling effect in the mouth.
Used in combination with sorbitol, erythritol improves flexibility and shelf-life in sugar free gum, preventing the development of hardness and brittleness.