Global biofuel output to jump nearly 70% by 2030 due to Gulf energy crisis, study finds

‌Global ​biofuels output is expected to surge nearly 70% by 2030 from 2025 levels as major producing countries push ahead with raising blending mandates in response to the energy crisis triggered by the ‌Iran war, a study published on Tuesday found.

The study was co-authored by London-based think tank Chatham House and non-profit certification group the Forest Stewardship Council (FSC). Biofuels such as ethanol can be produced from a range of organic feedstocks but are typically made from food crops or animal feed. ‌They are commonly blended with gasoline or diesel and become more competitive as fossil fuel prices rise.

The fuels have long ‌been at the centre of debate over whether they help tackle climate change or contribute to food inflation and deforestation. The study's authors warned that the latest surge in demand risks worsening the latter. "By prioritizing energy security in the short term, some policy responses may be trading off against increased food insecurity in the ⁠medium ​term (and) any additional shock such as extreme ⁠weather could severely affect food prices," they said.

Countries including Brazil, China, India, Indonesia and the US, along with the European Union, have proposed or adopted higher ⁠biofuel blending mandates since the outbreak of the Iran war. The authors estimate that if all proposed mandates are fully implemented, the land needed to produce ​biofuel feedstocks could more than double by 2030 compared with 2023 levels. That would require an additional 36 million hectares, ⁠an area roughly the size of Germany.

"The speed at which biofuel mandates are being increased creates significant risks as demand for feedstocks may rise faster than environmental safeguards, ⁠certification ​systems, land-use planning and enforcement mechanisms can be implemented," the authors said. They said feedstocks grown on degraded land or between crop seasons can help reduce land degradation and even restore land, but that is not typically the case for conventional, or first-generation, biofuels.

First-generation biofuels ⁠are made from food and feed crops such as corn and sugarcane. Second-generation, or advanced, biofuels are produced from organic residues and ⁠waste materials such as used cooking ⁠oil. "Production of feedstocks for first-generation biofuels tends to have net negative consequences for land degradation, food security and water use," the authors said.

Crude oil prices have risen nearly 40% since the Iran war ‌began in late February, ‌while sugar and corn prices have gained about 20%.