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IEA eyes double digit biofuels growth

The IEA is predicting double digit growth in international demand for biofuels over the next five years, with the sector’s outlook constrained by the sub-optimal policy environment supporting it, the Paris-based agency said in a new study released Friday.
IEA expects biofuels to increase their share of the global transport fuel mix from 4% last year to 5% by 2022. The limited availability of Electric Vehicles (EVs) will leave biofuels with over 90% of the market in renewable energy supplied into the road transport sector by 2022 following a 16% rise in output over the next five years.

“With a more favourable market and policy landscape, biofuel production could be 13% higher,” IEA says. It sees growth concentrated in Brazil and the US alongside “supportive” policy frameworks, despite the recent consternation in the US biofuels sector over the potential fallout from the Trump-appointee helmed EPA consultation on reductions to the US biodiesel mandate announced last week.

In the EU IEA sees “modest growth”. This is because the bloc’s policy environment “is not expected to encourage industry investment” post 2020, a stinging sideswipe to the bloc’s ambitions to steer demand away from crop-based biofuels and towards technology-intensive advanced biofuels. While the EU’s current draft RED II proposal on renewable fuels policy post-2020 will undeniably kill any incentive to invest in crop-based biofuels, demand and investment has already been pivoting towards the conversion of wastes into low carbon road transport fuels (for more information on developments in EU waste biofuel mandates, contact [email protected] to arrange a free trial of PRIMA’s Daily Low Carbon Fuels and Feeds Report).

MS – 06/10/2017

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