The global biofuels market is expected to grow and diversify in 2025 thanks to efforts to reduce carbon emissions and build more sustainable energy systems, according to Aida Gonzalez Palomino, chief analyst at SGS INSPIRE. However, the growth will be uneven depending on regional policies, infrastructure and economic factors.
The European Union, the US, Asia Pacific and Latin America, especially Brazil, will likely see biofuel uptake. This is due to their advanced biofuel markets, supportive policies and subsidies. Moreover, concerns over biofuel fraud will likely lead to enhanced regulatory oversight in the EU this year.
The European demand for advanced biofuels has been growing since 2018 and will keep growing in 2025 for use in transport fuels. EU’s production of advanced biofuels is expected to rise, driven by the transposition of the Renewable Energy Directive III (RED III) into national laws by 2025, the implementation of sustainable aviation fuel (SAF) mandates, and GHG intensity reduction targets in the marine sector.
A SAF mandate in the UK started on January 1, with several projects receiving government funding to boost domestic SAF production. The Union Database for Biofuels (UDB), launched in 2024 to combat certification fraud, may face a delayed mandatory implementation to January 1, 2026, due to technical challenges after 16 EU member states, including France, Germany, Italy and Spain, requested the delay.
In early March 2023, there were reports of fraudulent imports of biodiesel from China, which were then sold as advanced biofuels on the European market. Consequently, the Netherlands, France and Germany have insisted on anti-fraud investigations into imported biofuels and reinforcement of the governance systems, including granting EU member states the right to demand inspection access. SGS INSPIRE anticipates that although the UDB may have a limited initial impact on the market, it is likely to improve market transparency and help stabilise feedstock prices in the long run by eliminating counterfeit supplies.
Source: Biofuels International