Biofuels to make up 6% of road transport by 2030: IEA

Biofuel demand is forecast to expand to 6% of forecasted road transport energy demand in 2030, driven by policies and planned project additions, according to data from the International Energy Agency.

The 6% share will be equivalent to 5.3 exajoules, the IEA said in its December report "The Role of E-fuels in Decarbonising Transport".

Road transport accounted for nearly all liquid biofuels use in 2022 and this will tail off only slightly to 98% by 2030, the IEA said, following comments on biofuels demand in its October World Energy Outlook.

In October, the IEA said in the Stated Policies Scenario of its World Energy Outlook that biofuels accounted for 2.2 million b/d of oil demand in 2022, compared to 41.3 million b/d of road transport demand and equivalent to 5% of that, compared to 3 million b/d of biofuels demand or 7% of total road transport expected in 2030.

"Expanding biofuels beyond 9 EJ would require other feedstocks that are available in larger quantities and do not compete for land resources for food and feed production," the December IEA said.

These include new feedstocks compatible with existing technologies that can be grown on marginal land or as cover crops with current estimates at near 8 EJ of liquid biofuel potential.

The downside is that these growing techniques have not been widely adopted for biofuel production, they come at higher costs, require strict sustainability criteria and dedicated policy support. They also face competition from other bioenergy uses.

Other organic feedstocks such as agricultural and forestry residues, as well as municipal solid waste, offer additional supply potential but are not yet being deployed at scale and compete with other bioenergy uses.

Global biodiesel demand is to continue its growth and set to reach more than 1.4 million b/d in 2025, up from roughly 1 million b/d in 2022 and less than 600,000 b/d ten years ago, analysts at S&P Global Commodity Insights said Dec. 14. The bulk of this will be for blending in road diesel, they said.

Platts assessed the premium for RED-compliant FAME 0 above the front-month ICE low sulfur gasoil futures at $334.50/mt Jan. 3, compared to $417/mt a year previously.

Total biofuels are set to account for almost a quarter of transport fuel demand by 2050, according to S&P Global estimates.

Biofuels, EVs drive oil displacement

Oil demand used as a transport fuel is set to decline from 2026 due to efficiency improvements and a rapid uptake of hybrid and EVs and increased biofuels use. The pace of change varies across different transport modes and depends on the potential for direct electrification, the IEA December report said.

Global road transport fuel demand, accounting for nearly half of total oil consumption, is forecast to decrease from 2024. Projected oil consumption for 2030 would be 7.5 million b/d higher without the savings from new EVs and efficiency improvements since 2022, and a further 500,000 b/d without additional biofuels production, the IEA report said.

Platts is part of S&P Global Commodity Insights.