Biofuels
Global biofuel production reached ~180 billion litres in 2024 — about 4% of total transport energy. US and Brazil together produce 80% of world ethanol; the EU, Indonesia, US lead biodiesel. Sustainable aviation fuel (SAF) is the fast-growing frontier, mandated by EU ReFuelEU and US tax credits. The food-vs-fuel debate persists, with second-generation (waste-based) and third-generation (algae) biofuels still pre-commercial.
Key insights
US and Brazil dominate ethanol
Roughly half of US corn crop (~140Mt) goes to ethanol production (~58B litres). Brazil produces 35B litres from sugarcane — generally lower-carbon than corn ethanol because sugarcane growing requires fewer inputs. Together the two countries are 80% of world ethanol. US ethanol benefits from RFS (Renewable Fuel Standard) mandates; Brazilian ethanol from blend mandates and flex-fuel vehicles.
SAF is the new growth frontier
Sustainable Aviation Fuel — biofuel that can replace conventional jet fuel in existing engines — has emerged as a critical decarbonization tool for aviation. Global SAF production is ~3.6B litres in 2024 (1% of jet fuel demand). EU ReFuelEU mandates 2% SAF by 2025, 6% by 2030, 70% by 2050. US Inflation Reduction Act provides $1.25-1.75/gallon SAF tax credit. Major producers: Neste (Finland), Phillips 66, World Energy, Honeywell UOP.
Food-vs-fuel and indirect land-use
The food-vs-fuel debate is partly empirical, partly normative. Roughly 7% of global grain goes to biofuel. The 2007-2008 food price spike was widely (though contested) attributed to US ethanol expansion. Indirect land-use change (biofuels displacing food production → forest cleared for new food agriculture) creates climate accounting challenges. The EU has tightened sustainability criteria; California's LCFS scoring accounts for ILUC.
Top biofuel producers (2024)
Billion litres total biofuel (ethanol + biodiesel)
Key Finding: USA dominates; Brazil and Indonesia are the next-largest single producers; EU collectively produces substantial biodiesel.
Global SAF production 2018–2030E
Billion litres per year
Key Finding: SAF is small today but growing fast under regulatory mandates. EU and US production capacity is expanding rapidly.
Methodology & caveats
First, second, third generation
First-generation biofuels use food crops (corn, sugarcane, soybeans, palm oil) — mature, scalable, food-vs-fuel concerns. Second-generation uses waste/residue (corn stover, used cooking oil, municipal waste) — better sustainability profile but harder to scale, higher cost. Third-generation algae-based fuels remain pre-commercial after 15+ years of trying.
Lifecycle emissions
Biofuel climate benefits depend on lifecycle GHG accounting: emissions from fertilizer use, tractor fuel, processing, transport, and land-use change subtracted from displaced fossil fuel emissions. US corn ethanol: 20-40% reduction vs gasoline. Brazilian sugarcane ethanol: 60-80% reduction. Used-cooking-oil biodiesel: 80%+. Palm-oil biodiesel with deforestation: can be worse than fossil. EU RED II sets sustainability thresholds.
Mandates and policy
US RFS (2005, expanded 2007): blend mandate for renewable fuels, currently ~38B litres conventional ethanol + 0-5B advanced biofuels. EU RED II/III: increasing renewable share in transport fuels. Brazilian Anhydrous (gasoline) and Hydrous (E100) blends. Indonesia B35-B40 biodiesel mandates. Mandates have driven most production growth; pure market demand is small.