"Alcohol" refers to a group of organic compounds with a vast range of forms and uses in cosmetics and in other types of products and solutions.
For skin, there are good alcohols and bad alcohols, corresponding to high-molecular-weight alcohols and low-molecular-weight alcohols, respectively, which can have emollient properties (cetyl alcohol) or act as detergent cleansing agents like isopropanol.
There also are benign forms, including glycols, which are used as humectants to help hydrate and deliver ingredients into skin’s uppermost layers.
Alcohols with low molecular weights—the bad-for-skin kind—can be drying and sensitizing. The alcohols to be concerned about in skincare products are ethanol or ethyl alcohol, denatured alcohol, methanol, isopropyl alcohol, SD alcohol, and benzyl alcohol. The concern is when one or more of these are listed among the main ingredients; tiny amounts in an otherwise good formula aren’t a problem.
In addition to being drying and sensitizing, these alcohols can disrupt skin’s surface layers. Alcohol helps ingredients like retinol and vitamin C penetrate into the skin more effectively, but it does that by breaking down the surface layers of skin—destroying the very substances that keep your skin feeling healthier and looking younger over the long term.
Alcohols like SD and "denatured" immediately harm the skin, starting a chain reaction of damage that continues long after it has evaporated. A 2003 study published found that with regular exposure to alcohol-based products, cleansing becomes a damaging ordeal—skin is no longer able to keep water and cleansing agents from penetrating into it, thus further eroding its surface layers.
It also destroyed the substances in skin that help to naturally soothe and defend it against visible effects of environmental damage.
If that weren’t bad enough, exposure to alcohol causes healthy substances in skin to literally self-destruct. The research also showed that these destructive, aging effects on skin’s substances increased the longer the exposure to alcohol; that is, two days of exposure was dramatically more harmful than one day, and that is only from exposure to a 3% concentration (most skincare products with denatured alcohol contain greater amounts than that).
In short, for the healthy appearance of skin at any age, avoiding products that contain high amounts of the drying, sensitizing types of alcohol is a non-negotiable skincare must.
References for this information:
Biochimica et Biophysica Acta, May 2012, issue 4, page 1410
Aging, March 2012, issue 3, pages 166-175
Chemical Immunology and Allergy, March 2012, pages 77-80
Dermato-Endocrinology, January 2011, issue 1, pages 41-49
Journal of Occupational Medicine and Toxicology, November 2008, issue 3
Experimental Dermatology, June 2008, issue 6, pages 542-551
Clinical Dermatology, September-October 2004, issue 5, pages 360-366
The Journal of Hospital Infection, December 2003, issue 4, pages 239-245
Alcohol Journal, April 2002, issue 3, pages 179-190