Transport Biofuels

Not on track
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In this report

Transport biofuel production expanded 6% year-on-year in 2019, and 3% annual production growth is expected over the next five years. This falls short of the sustained 10% output growth per year needed until 2030 to align with the SDS. Stronger policy support and innovation to reduce costs are required to scale up both advanced biofuel consumption and the adoption of biofuels in aviation and marine transport, as envisaged in the SDS. As only sustainable biofuels have a place in the SDS, more widespread sustainability governance must complement higher biofuel output.

Global biofuel production 2010-2019 compared to consumption in the Sustainable Development Scenario

Tracking progress

Transport biofuel consumption needs to almost triple by 2030 (to 298 Mtoe) to be on track with the Sustainable Development Scenario (SDS). This equates to 9% of global transport fuel demand, compared with the 2018 level of around 3%.

Global biofuel production is not increasing quickly enough to meet SDS demand. Output grew 6% year-on-year in 2019 to reach 96 Mtoe (161 billion litres), but average production growth of only 3% per year is anticipated over the next five years. This falls short of the sustained annual growth of 10% through to 2030 required to keep pace with the SDS.

Biofuel production in 2019 compared to consumption in 2030 under the Sustainable Development Scenario


Some major biofuels markets are expected to fall short of the production levels required by the SDS in 2030, while others are better positioned to keep pace.

Country/region Forecast annual production growth (2019-25) Annual production growth needed to meet SDS (2019-30)
United States 1.9% 7%
European Union 0.5% 9%
Brazil 1.7% 5%
India 11.8% 22%
China 15.3% 19%
ASEAN 13.3% 10%

Note: ASEAN = Association of Sotheast Asian Nations.

Biofuel production in the United States and EU member states is not on track to meet SDS demand in 2030. Most biofuel consumption in these countries occurs at low percentage blend levels with fossil fuels. Lower US and EU road transport fuel demand as a result of improved vehicle efficiency therefore means that, without higher biofuel blend rates or greater use of drop-in biofuels, consumption of biofuels is set to fall.

Although biofuel production in Brazil and India is expected to expand, growth must accelerate further yet to achieve the SDS volume for 2030.

Brazil reached record ethanol and biodiesel production levels in 2019. Continued output growth is anticipated owing to improved production economics and the supportive environment for capacity investment that the new Renovabio policy will create. Brazil has also announced plans to progressively scale up its biodiesel mandate from 11% to 15%.

In India, accelerated ethanol production is needed to meet the SDS level by 2030. India’s 2018 biofuels policy widened the permitted feedstock base for ethanol and introduced subsidies to expand production capacity, establishing the foundations for ethanol output growth. 

China and ASEAN countries also exhibit production growth, which if sustained would deliver the 2030 biofuel volumes required by the SDS. China plans to roll out blends of 10% ethanol in gasoline from 11 to 15 provinces and new ethanol capacity is in development.

Given rapidly increasing transport fuel demand, policy support for transport biofuels in ASEAN countries is robust because domestic biofuel consumption is a means to raise energy security while ensuring demand for strategically important agricultural commodities.

In Mexico and South Africa transport biofuel industries are at an early stage. Therefore, market development and technology leapfrogging are needed to get on track with the SDS.

In the SDS, low-carbon fuels meet 7% of international shipping and 9% of aviation fuel demand in 2030. However, current biofuel consumption is minimal in both these subsectors.

Biofuel consumption breakdown in the Sustainable Development Scenario, 2015-2030


Some progress has been made in biofuels for aviation. Flights using biofuel blends have surpassed 200 000; continuous biofuel supply is available at six airports; and policy support was enhanced in the United States and Europe in 2018.

Still, aviation biofuel production of about 15 million litres in 2018 accounted for less than 0.01% of aviation fuel demand. This means that very significant market development is needed to deliver the aviation biofuel production required to be on the SDS trajectory in 2030.

In the marine sector, the use of biofuels is under consideration in certain cases, although the currently higher costs for biofuels means uptake remains low.

Advanced biofuels from non-food crop feedstocks need to command a more substantial share of biofuel consumption in the SDS. This is because they mitigate land use change concerns and generally offer higher lifecycle GHG emissions reductions than conventional biofuels. 

Technologies to produce biodiesel and hydrotreated vegetable oil (HVO) from waste oil and animal fat feedstocks are technically mature and provided 8% of all biofuel output in 2018. However, production of novel advanced biofuels from other technologies is still modest, with progress needed to improve technology readiness. These technologies are important nevertheless as they can utilise feedstocks with high availability and limited other uses (e.g. agricultural residues and municipal solid waste). 

The investment landscape for advanced biofuels is challenging, however, with only a small share of announced projects moving into construction. Nevertheless, policy interest remains strong, notably in Europe, India and the United States. The Biofuture Platform, a 20-country collaboration, advocates an increase in low-carbon biofuel consumption.

Policy support means Europe, India and the United States account for three-quarters of projects currently in construction and under development,

Country/region Policies
Europe Updated Renewable Energy Directive (RED) with 3.5% target for novel advanced biofuels by 2030; mandates in Denmark, Finland, France, Germany, Italy, Norway and the United Kingdom.
United States Renewable Fuel Standard, California Low-Carbon Fuel Standard.
India 2018 policy pledges fiscal and investment support for advanced biofuels. Target to develop 12 commercial-scale plants.

Note: The IEA defines advanced biofuels as sustainable fuels produced from non-food crop feedstocks, capable of delivering significant lifecycle GHG emissions reductions compared with fossil fuel alternatives, and which do not directly compete with food and feed crops for agricultural land or cause adverse sustainability impacts. Novel advanced biofuels are fuels that meet the advanced biofuel definition but are not currently commercialised.

Sustainability governance is essential to ensure that scaling up biofuel consumption delivers tangible social, economic and environmental benefits, including lifecycle GHG emissions reductions.

Policy makers must establish frameworks to ensure only sustainable biofuels receive policy support. Adherence with sustainability criteria can be demonstrated by third-party certification of biofuel supply chains.

The European Union, the United States and Brazil have established frameworks to ensure biofuel sustainability, but there is a need for other countries to ensure that rigorous sustainability governance is linked to biofuel policy support.

Novel advanced biofuel investment and production costs are currently high. Supportive policies are needed to facilitate the technology 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, China and ASEAN countries, as they possess significant feedstock resources.

Countries and regions should consider policies that specify reductions in fuel life-cycle carbon intensity (such as California’s Low Carbon Fuel Standard), which are effective in boosting demand for biodiesel and HVO from waste oil, fat and grease feedstocks, as well as biomethane. They could also support deployment of novel advanced biofuels once production costs fall.

Biofuel production for airplanes and ships is technically viable, but the availability of suitable fuels is low. In addition, uptake is constrained by costs that are higher than fossil fuels at current oil prices, especially since policy support is less widespread than for road transport.

To scale up biofuel consumption, market and policy frameworks must be devised that reflect the international nature of these sectors. This task falls within the remit of the International Civil Aviation Organisation and the International Maritime Organisation.

Domestic aviation and navigation fall under the jurisdiction of national governments, however, and policy measures that close cost premiums with fossil fuels (e.g. consumption subsidies or carbon pricing) can be employed to increase the economic viability of biofuel use.

Most biofuels are currently consumed through blending at low percentages (typically less than 10% by volume or energy) with fossil fuels.

Policy makers should consider how to encourage the use of flexible-fuel vehicles and drop-in biofuels to replace higher shares of gasoline or diesel with sustainable biofuels.

Flexible-fuel vehicles are adapted to high biofuel blend levels or unblended biofuel use. Drop-in biofuels can be used unblended or at high blend shares without modifications to engines, maintenance regimes or fuel supply infrastructure.


Dina Bacovsky (Advanced Motor Fuels TCP), Carlos Ocampo (Novozymes)