New Delhi: In a notable transition towards renewable energy, the International Energy Agency (IEA) anticipates a substantial 30% rise in global biofuel demand over the next five years, amounting to an additional 38 billion liters by 2028, reports Economic Times.
The impetus behind this surge primarily originates from emerging economies such as Brazil, Indonesia, and India, as outlined in the latest IEA report.
As per the IEA projections, the total biofuel demand is poised to escalate by 23%, reaching 200 billion liters by 2028, with renewable diesel and ethanol contributing to two-thirds of this expansion. The remaining portion comprises biodiesel and biojet fuel. This upswing is chiefly credited to robust biofuel policies, an upswing in transport fuel demand, and substantial feedstock potential within these burgeoning economies.
Conversely, advanced economies, encompassing the European Union, the United States, Canada, and Japan, despite fortifying their transport policies, encounter limitations in volume growth due to factors such as the growing prevalence of electric vehicles, enhancements in vehicle efficiency, and the formidable costs and technical constraints associated with biofuels.
The IEA underscores that in an accelerated scenario, wherein existing policies are reinforced and biofuel demand proliferates in new markets, the growth in demand could nearly triple. Renewable diesel and bio-jet fuel consumption are projected to amplify by 18 billion liters during the forecast period, with the United States and Europe contributing to nearly 80% of this upswing.
Despite the promising growth outlook, the IEA acknowledges various challenges, including the comparatively higher costs of biofuels compared to fossil fuels. To address this, countries like Indonesia, Malaysia, and India have instituted direct fuel subsidies, alleviating the cost impact for consumers and businesses.
The report also underscores the escalating role of electric vehicles in diminishing oil demand, particularly in the United States, Europe, and China. By 2028, electric vehicles utilizing renewable electricity are anticipated to circumvent 1.3 million barrels of oil equivalent per day of oil consumption in these regions, approximately equating to the impact of biofuels.
This significant transformation in the global biofuel market underscores the evolving dynamics of energy consumption and the growing significance of renewable energy sources in the pursuit of sustainable and environmentally friendly alternatives to fossil fuels.
