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According to data from the International Energy Agency (IEA), biofuel demand is expected to expand, making up 6 per cent of forecasted road transport energy demand by 2030.
According to a report by S&P Global Commodity Insights (GCI), this growth is attributed to policies and planned project additions outlined in the IEA's December report titled "The Role of E-fuels in Decarbonising Transport." The forecasted 6 per cent share is equivalent to 5.3 exajoules, reinforcing the significance of biofuels in the broader context of decarbonizing the transport sector. The IEA notes that road transport will continue to dominate the use of liquid biofuels, maintaining a share of 98 per cent by 2030. This underscores the critical role biofuels play in the transition toward more sustainable energy sources. In 2022, road transport accounted for nearly all liquid biofuel use, and this trend is expected to marginally decrease to 98 per cent by 2030, as highlighted in the IEA's October World Energy Outlook. In that scenario, biofuels represented 2.2 million b/d of oil demand in 2022, constituting 5 per cent of the road transport demand. Expanding biofuels beyond 9 exajoules would necessitate exploring other feedstocks available in larger quantities that do not compete for land resources for food and feed production. The December IEA report identifies new feedstocks compatible with existing technologies, such as those grown on marginal land or as cover crops, offering around 8 exajoules of liquid biofuel potential. However, these approaches face challenges, including higher costs, strict sustainability criteria, and the need for dedicated policy support. Organic feedstocks like agricultural and forestry residues, along with municipal solid waste, offer additional supply potential. Still, their deployment at scale is limited, and they face competition from other bioenergy uses. Global biodiesel demand is expected to continue growing, reaching over 1.4 million b/d in 2025, reflecting the industry's upward trajectory over the past decade. S&P Global Commodity Insights analysts project this increase from around 1 million b/d in 2022 and less than 600,000 b/d ten years ago. The bulk of this biodiesel will be used for blending in road diesel. While biofuels are poised to play a significant role in the future of transport, other factors such as electric vehicles (EVs) are also contributing to the displacement of oil demand. The IEA's December report anticipates a decline in oil demand used for transport fuel from 2026, driven by efficiency improvements, the rapid adoption of hybrid and EVs, and increased biofuel use. The report emphasizes the importance of these changes in mitigating oil consumption, with global road transport fuel demand projected to decrease from 2024. Without the savings from new EVs and efficiency improvements since 2022, the IEA estimates that projected oil consumption for 2030 would be 7.5 million b/d higher, with an additional 500,000 b/d without further biofuels production. (ANI)
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