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Emerging economies to lead global biofuels production throughout 2028

Economy Materials 1 July 2023 10:35 (UTC +04:00)
Maryana Ahmadova
Maryana Ahmadova
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BAKU, Azerbaijan, July 1. From 2022 to 2028, global biofuels production is expected to reach a substantial expansion of nearly 600,000 b/d, with emerging economies leading the way, Trend reports.

As the International Energy Agency (IEA) supposes, Brazil, Indonesia, and India will collectively contribute to 70 percent of this growth as they work towards achieving their domestic blending targets.

The US, Europe, and Canada are projected to witness an increase in biofuel production due to policies aimed at reducing greenhouse gas emissions.

In emerging economies, ethanol and biodiesel supply will rise by 30 percent during this period to meet the growing domestic demand driven by policies focused on reducing oil imports and greenhouse gas emissions. These policies encourage the use of domestic feedstocks like sugar, corn, and palm oil. The rising demand for liquid transport fuels further supports the expansion of biofuel production, the agency noted.

Meanwhile, India is increasing its ethanol production to achieve a 20-percent blending target by 2025. They are providing guaranteed pricing and incentives to encourage the establishment of new ethanol facilities. In Indonesia, production is expanding to meet a 35-percent biodiesel blending goal, surpassing the previous target of 30 percent set in 2022. Brazil has set its sights on a 15=percent target by 2026, and they are actively promoting ethanol through a current 27-percent blending target, tax incentives, and the RenovaBio program, which aims to reduce carbon intensity. Additionally, Indonesia, Brazil, and India are exploring additional biofuel policies that could further boost growth in this sector.

As the IEA explained, biofuel demand growth in advanced economies is driven by their greenhouse gas reduction targets, despite a slowdown in transport fuel demand over the forecast period.

Renewable diesel and biojet fuel are the primary sources of new supply due to their low greenhouse gas intensity, often derived from residues, and their ability to be blended with minimal modifications. However, ethanol faces challenges in certain regions where compatible infrastructure, such as pumps, for supporting higher blending levels is lacking. As a result, ethanol demand experiences a slight decline from 2022 to 2028, compounded by declining gasoline demand in advanced economies.

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