IEA Forecasts Surge in Biofuel Demand Until 2028
IEA Forecasts Surge in Biofuel Demand Until 2028

IEA Forecasts Surge in Biofuel Demand Until 2028

  • 17-Jan-2024 3:10 PM
  • Journalist: Xiang Hong

The International Energy Agency (IEA) has unveiled its latest insights on the future of biofuels in the Renewables 2023 report, signaling a significant surge in global demand for biofuels over the next five years. The report, released on January 11, projects a noteworthy expansion of 38 billion liters (equivalent to 10.4 billion gallons) between 2023 and 2028, with the overall biofuel demand anticipated to rise by 23 percent to reach 200 billion liters by 2028. Within this growth trajectory, renewable diesel and ethanol are poised to play pivotal roles, collectively contributing two-thirds of the projected increase, while biodiesel and biobased sustainable aviation fuel (SAF) are expected to account for the remaining share.

A key focal point of the IEA's projections is the geographical distribution of this biofuel demand surge. Emerging economies, notably Brazil, Indonesia, and India, are anticipated to be the primary contributors to this growth over the next half-decade. In these regions, the usage of ethanol and biodiesel is expected to experience the most substantial expansion. Conversely, advanced economies, including the United States, European Union, Canada, and Japan, are expected to witness the primary growth in renewable diesel and biobased SAF consumption. The IEA anticipates a collective expansion of 18 billion liters in these segments through 2028, with the United States and Europe accounting for 80 percent of this increase.

The report underscores the prominent role of renewable diesel in driving new growth in demand, attributed to its superior blending properties. This reflects a strategic shift in the biofuel landscape, with advanced economies embracing renewable diesel as a key component of their sustainable energy portfolios. As a result, the demand for renewable diesel and biobased SAF is expected to exhibit robust growth, contributing significantly to the overall surge in biofuel consumption.

Furthermore, the IEA's predictions highlight the evolving dynamics within the ethanol and biodiesel sectors. Over the next five years, these biofuels are projected to experience a 13 percent expansion, with increased consumption in emerging economies offsetting declines in advanced economies. While the report suggests a slight rise in European ethanol demand through 2028, it anticipates a counterbalancing decrease in the United States due to an expected shrinkage in gasoline use.

The biodiesel landscape presents a varied scenario, with anticipated expansion in consumption in Brazil and Indonesia. The United States and Europe are expected to retain their positions as major biodiesel markets, collectively accounting for over one-third of global biodiesel demand in 2028. This projection underscores the continued significance of biodiesel in meeting the growing demand for sustainable fuel alternatives.

The IEA's Renewables 2023 report paints a compelling picture of the biofuel landscape, highlighting a substantial increase in global demand over the next five years. The anticipated growth is not only quantitative but also reflects a shift in preferences towards specific biofuels, with renewable diesel and biobased SAF emerging as frontrunners. The geographical distribution of this growth, with a focus on emerging and advanced economies, further emphasizes the diverse factors influencing biofuel consumption patterns. As the world navigates the transition towards cleaner and more sustainable energy solutions, the IEA's insights provide valuable guidance for industry stakeholders, policymakers, and investors alike.

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