World Economies Ask: Can Biofuels Replace Fossil Fuel Shortages?

---

Written by Paul Wiseman for IIR News Intelligence (Sugar Land, Texas)

---

Summary

Industrial Info Resources is tracking 507 biodiesel/renewable diesel/SAF projects worldwide, with a total investment value of $95.57 billion.

---

Crude Options

Current geopolitical actions are taking their toll on energy and economies across the globe, and governments are scrambling to offset that any way they can. Large crude oil importers especially, such as China, Japan, India, and the EU are reeling, and looking to replace fossil fuels wherever possible.

Since transportation uses about 65% of the world's fossil fuel production, according to EBSCO, and because about 95% of transportation still uses fossil fuels (according to research firm Rhodium Group), some governments are seeing an increase of biofuels mandates in the transportation sector as a way to reduce the impact of higher vehicle-related fuel prices.

Industrial Info Resources data show 507 biodiesel/renewable diesel/sustainable aviation fuel (SAF) projects worldwide, with a total investment value (TIV) of $99.57 billion. The top two regions are North America, with 55 projects and a TIV of $28.8 billion, and Asia with 135 projects with a TIV of $22.9 billion.

Also tracked are 745 ethanol projects with TIV of $30.3 billion. The vast majority (504, TIV $18.6 billion) are in South America, with Brazil (448, TIV $16.85 billion) responsible for most of that. A recent Industrial Info Resources news story details further development in this sector.

The U.S. is the world's top producer and exporter of biofuels, including ethanol. As per this story from September 23, USDA Announces Plan to Boost Exports of Ethanol, Other Biofuels, the U.S. produces just over half the world's ethanol. The U.S. has also set ethanol export records in both 2024 and 2025, with most of those exports going to Canada, the European Union (EU), the United Kingdom (UK), and India, according to the U.S. Energy Information Administration (EIA).

Although the U.S. has actually backed off on domestic incentives for replacing fossil fuels, its export market is encouraging some expansion, including the aforementioned ethanol plants. Renewable diesel/synthetic aviation fuel (RD/SAF) are also growing.

In addition to 30 operating units with capacity of 5,660.6 million gallons per year, Industrial Info Resources is tracking six under-construction projects with potential capacity of 167 million gallons per year, and 84 more that are in planning stages. The latter would have a capacity of 6,175.5 million gallons per year if completed.

Asia Ups the Mandates

Most nations are still at least enforcing existing clean fuels mandates and, since February, governments particularly in Asia and Oceania have raised them, at least in part to try to mitigate oil prices and supply shortages. Others, such as the EU, have discussed such action but have not yet acted.

Indonesia: Making the biggest move of all, it overrode a January 2026 decision to delay moving from B40 (biodiesel) to B50 until 2027. But in April, after the closing of the Strait of Hormuz Indonesia's energy minister moved the adoption date to July 1. Biodiesel there comes from domestically-grown palm oil, making it a key part of the nation's energy independence.

The upgrade raises palm oil use from the previous 12.6-12.7 million tons per year to almost 15 million tons per year.

Malaysia: On April 14, Malaysia's Economy Minister Akmal Nasrullah Mohd Nasir announced the nation would raise is biodiesel blend mandate to B15 from the previous B10, with an intermediate B12 step in between. Its goal also was to reduce fossil fuel imports.

That will be a significant boon to the nation's biodiesel industry, which has only been operating at about 58% of capacity for several years, according to a USDA report.

India and Ethanol
In May, India's government gave notice that the previous E20 standards would be raised to E30, but gave no specific timetable for the change. In fact, the nation had only begun even using the E20 as a minimum, due to pushback from consumers concerned about reduced gas mileage and increased repairs that can result from higher ethanol mixes.

As in other nations, the stated cause for the higher standards was the reduced availability of crude worldwide. While E85 and E100 have already been available there, those blends remain optional for now.

Europe
Most current updates in the EU were already in the works before the Strait of Hormuz conflicts, based on Renewable Energy Directive III (RED III) plans.

Key Takeaways

• Fossil fuel shortages and price increases due to closings of the Strait of Hormuz are pushing governments to at least consider raising renewable fuel standards to mitigate cost and supply issues. This is incentivizing new projects in both renewable diesel/SAF and ethanol industries.

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).