Transport biofuels

Tracking Clean Energy Progress

Not on track

Transport biofuel production expanded 7% year-on-year in 2018, 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.

Pharoah Le Feuvre
Lead author

Global biofuel production 2010-24 vs. SDS biofuel consumption in 2025 and 2030

	Historical	Forecast	Sustainable Development Scenario
2010	59.33	0	0
2011	62.09	0	0
2012	63.98	0	0
2013	70.75	0	0
2014	75.65	0	0
2015	75.21	0	0
2016	79.35	0	0
2017	82.56	0	0
2018	88.01	0	0
2019	0	91.17	0
2020	0	96.55	0
2021	0	98.96	0
2022	0	101.16	0
2023	0	103.58	0
2024	0	106.08	0
2025	0	0	198.4
2030	0	0	252
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Back to Transport sector | TCEP overview 🕐 Last updated Monday, May 27, 2019

Tracking progress

Transport biofuel consumption needs to triple by 2030 (to 280 Mtoe) to be on track with the Sustainable Development Scenario (SDS). This equates to 10% of global transport fuel demand, compared with the current level of around 3%.

Global biofuel production is not increasing quickly enough to meet SDS demand. Output grew 7% year-on-year in 2018 to reach 88 Mtoe (152 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 2018 compared with SDS consumption in 2030

Alignment with the SDS will require more widespread biofuel market development and higher production in China and India.

	2018 Production	2030 Consumption (SDS)
United States	36.06	86.16
EU-28	14.00	43.74
Brazil	20.03	33.29
RoW	7.29	25.90
China	2.87	23.66
ASEAN	6.92	12.69
India	0.83	8.03
Aviation and marine	0.00	46.79
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Note: RoW = rest of world

Trends in key biofuel markets

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.

Forecast production growth vs. growth required to meet SDS in 2030

While transport biofuels are off track globally, China and the ASEAN region are on course to meet SDS demand

Country/regionForecast annual production growth
Annual production growth needed to meet SDS (2019-30)
United States 1% 6%
European Union 0.5% 8%
Brazil 3.5% 6%
India 11% 22%
China 16% 17%
ASEAN 9% 8%

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 2018. Continued output growth is anticipated owing to improved production economics and the supportive environment for capacity investment that the Renovabio policy will create after its introduction in 2020. Brazil has also announced plans to progressively scale up its biodiesel mandate from 10% to 15%.

In India, accelerated ethanol production and a ramp-up in used cooking oil biodiesel output are 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 nationwide; expansion from 11 to 15 provinces is under way and significant 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.

Biofuels in aviation and marine transport

In the SDS, low-carbon fuels meet 7% of international shipping and 10% of aviation fuel demand in 2030. However, current biofuel consumption is minimal in both these subsectors.

Biofuel consumption breakdown in the SDS

The SDS requires greater biofuel consumption in road freight, aviation and shipping.

	Light passenger vehicles	Road freight	Shipping	Aviation
2015	66.02795555	12.47895113	0.175217	0
2020	81.65484576	36.57027332	4.05667617	0
2025	123.6757877	58.78257614	9.45120405	15.7402719
2030	151.400769	82.15554677	15.31187577	31.4805257
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Some progress has been made in biofuels for aviation. Flights using biofuel blends have surpassed 150 000; continuous biofuel supply is available at five 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.

Scaling up advanced biofuels is essential

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 6-8% 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, and the Biofuture Platform, a 20-country collaboration, advocates an increase in low-carbon biofuel consumption.

Key advanced biofuel support policies

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

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.

Concerted stakeholder action is essential to overcome key barriers and put transport biofuels on track with the SDS.

Ensuring sustainability

Since only sustainable biofuels have a place in the SDS, 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.

Commercialising advanced biofuels

Novel advanced biofuel investment and production costs are currently high. It is recommended that supportive policies be introduced 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), that 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.

Scaling up aviation and marine biofuels

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.

Moving beyond low biofuel blend shares

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.

Biofuel energy consumption and transport energy demand shares, 2016

Brazil (flex-fuel vehicles) and Sweden (drop-in biofuels) have harnessed measures to increase biofuel blend shares.

	Biofuels	Share of biofuels in transport energy demand
Brazil	16.55	19.9
Argentina	1.25862547	7.262427811
China	2.469312116	0.83
France	3.118010178	7.113930452
India	0.639102041	0.710482214
Indonesia	2.104213	4.5
Sweden	1.335020759	16.3
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Innovation gaps

Advanced biofuels need to command a more significant share of transport biofuel consumption by 2030 in the SDS. However, currently only biodiesel and HVO production from fat, waste oil and grease feedstocks is commercialised, and there are limits on the availability of these feedstocks.

Therefore, scaling up advanced biofuel production volumes significantly needs innovation so other less mature advanced biofuel technologies reach commercial production. Cellulosic ethanol and biomass-to-liquid (BtL) synthetic fuels are important in this respect. This is because they can be produced from feedstocks with higher availability and potentially lower cost, such as municipal solid waste, forestry and agricultural residues. 

Commercialisation of cellulosic ethanol

Cellulosic ethanol offers significant CO2 emissions reductions compared with fossil-based transport fuels for internal combustion engine (ICE) passenger vehicles, as well as for trucks and buses when used as ED95 (95% fuel ethanol with lubricants and additives). Although regular vehicles can accommodate ethanol at low blend rates, CO2 emissions reductions are maximised when it is used at high blend shares or unblended in flexible-fuel vehicles. Higher cellulosic ethanol production would also provide the additional benefit of curtailing agricultural residue-burning in fields, which deteriorates air quality. 

Read more about this innovation gap →

Development of Biomass-to-Liquids fuel production from thermochemical processes

Biomass-to-Liquids (BtL) synthetic fuels produced from thermochemical processes, such as gasification and pyrolysis, offer the potential to convert low value biomass and waste feedstocks (including municipal solid waste) to low carbon transport fuels. The high availability of these feedstocks means that fully commercialised thermochemical technologies could open the door to significant volumes of advanced biofuels for the transport sector, providing diesel substitutes in sectors that are hard to electrify.

Read more about this innovation gap →

Additional resources


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