Tracking report
Electric Vehicles
On track

Lead authors
Jeremy Moorhouse
IEA (2021), Transport Biofuels, IEA, Paris https://www.iea.org/reports/transport-biofuels
Replacing fossil fuels with biofuels is one of the primary ways to decarbonise the transport sector. In fact, biofuels make up 64% of the sector’s renewable energy consumption in 2030 in the Net Zero Emissions by 2050 Scenario. Biofuel consumption triples between 2019 and 2030 to 12 EJ in the scenario, equivalent to 12% of global transport fuel demand in 2030.
Today, however – accounting for just 3% of transport fuel demand – biofuels are not on track to attain the Net Zero trajectory, and high commodity prices present a near-term obstacle. Nevertheless, a number of significant policy actions under discussion could accelerate demand for sustainable biofuels in the decade ahead.
Biofuel demand fell 8% from 2019 to 2020, largely due to mobility constraints resulting from the Covid-19 pandemic. The pandemic also prompted some governments to delay policy implementation. Although demand is expected to return to the 2019 level in 2021, rising commodity prices in 2021, including for feedstocks such as soy and corn, have prolonged policy delays in several key countries:
Despite challenges arising from the Covid-19 crisis and high feedstock costs, a number of new policies that could accelerate sustainable biofuel demand are being discussed in large biofuel markets.
Between 2010 and 2019, global biofuel consumption expanded 5% on average per year. Although achieving the Net Zero Scenario’s 14% average annual growth between 2021 and 2030 will require considerably stronger policies, similar expansion has been achieved in some countries and regions in the past.
In fact, Europe, North America and several countries in Asia are considering or implementing policies that could accelerate biofuel demand.
Biofuels produced from wastes, residues and dedicated crops that do not compete with food crops (such as crops grown on marginal land) make up 45% of biofuels consumed in 2030 in the Net Zero Scenario, up from an estimated 7% in 2020.
Today, used cooking oil and waste animal fats provide the majority of non-food-crop feedstocks for biofuel production. Given that these feedstocks are limited, however, new technologies will need to be commercialised to expand non-food-crop biofuel production. For instance, cellulosic ethanol and biomass-to-liquids technologies use non-food feedstocks to produce low-carbon biofuels for use in the transport sector. While the average production cost is still double to triple that of fossil fuel equivalents, it could decline by as much as 27% over the next decade.
Biofuel demand and production are expanding globally, but not at a pace consistent with the Net Zero Scenario. National governments can employ a combination of regulatory measures such as mandates, low-carbon fuel standards and GHG intensity targets, combined with carbon pricing and financial incentives, to help raise biofuel demand. In all cases, policies should include rigorous sustainability criteria and promote lifecycle GHG emissions reductions.
Sustainability governance is essential to ensure that higher biofuel consumption provides tangible social, economic and environmental benefits, including lifecycle GHG emission reductions.
Policymakers must establish frameworks to ensure that only sustainable biofuels receive policy support. Adherence to sustainability criteria should be verified by third-party certification of biofuel supply chains.
The European Union, the United States (through minimum GHG thresholds in the RFS programme and the incorporation of indirect land-use change into California’s LCFS) and Brazil have established frameworks to codify some aspects of biofuel sustainability, but other countries must also ensure that rigorous sustainability governance is linked to biofuel policy support.
Most biofuels are currently consumed through blending at low percentages with fossil fuels (typically less than 10% by volume or unit of energy).
Policymakers should therefore find ways to encourage the use of flexible-fuel vehicles and drop-in biofuels to allow higher shares of sustainable biofuels to replace gasoline or diesel.
Flexible-fuel vehicles are adapted to run on high biofuel blend levels or even on unblended biofuel, while drop-in biofuels can be used unblended or at high blend shares without modifications to engines, maintenance regimes or fuel supply infrastructure.
Novel advanced biofuel investment and production costs are currently high, so policies are needed to facilitate the technological learning and production scale-up necessary to reduce costs.
Relevant policies include advanced biofuel quotas and financial de-risking measures (e.g. loan guarantees from development banks). These would be particularly effective in Latin America and China as well as ASEAN countries, as these regions possess significant feedstock resources.
Furthermore, governments should introduce policies that aim to reduce the lifecycle carbon intensity of fuels (such as California’s Low Carbon Fuel Standard). Advanced fuels with lower carbon intensities are rewarded financially under such policies.
This report, prepared by IEA Bioenergy Task 39, offers an overview of advanced biofuel costs, cost reduction potential and policies that could support commercialisation.
The Biofuture Platform is a 21-country collaboration that supports the expansion of sustainable bioenergy.
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