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Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--Biofuels--renewable substitutes or blend-ins for natural gas and diesel--account for only about 1% of fuel use worldwide now, and only 3% of the production of all renewable fuels. An exception is California, where renewable diesel accounted for 65% of diesel fuel use in fourth-quarter 2024, according to the U.S. Energy Information Administration (EIA).
But the production and consumption of biogases are poised to grow, according to a report issued by the International Energy Agency (IEA) (Paris, France).
The IEA said it sees that share rising to 5-10% by 2050. Biogases include biogas and its more-refined cousin biomethane, the latter of which can be mixed with or a replacement for natural gas. The IEA's "Outlook for Biogas and Biomethane" report, released on May 28, admits that biogases "start from a low base," which allows for plenty of growing room.
At the same time, a new report from the U.S. Department of Energy's EIA report shows U.S. production of renewable and biodiesel dropped to 10-year lows in first-quarter 2025 due to high production costs and uncertainties about tax credits under the new presidential administration.
In fact, all biofuels are challenged by high costs relative to their fossil fuel equivalents, making them reliant on quotas and tax incentives for profitability. And when used for power generation, biogases also suffer compared to wind and solar, coming in at a levelized $100 per megawatt-hour (MWh) compared with $30 per MWh for the latter two.
Gauging worldwide production, the IEA said, "In 2023, combined biogas and biomethane production globally was just under 50 bcme (billion cubic meters of natural gas equivalent)," or about 1.65 trillion cubic feet (tcf). The U.S. share of that was 6 bcme, or 211.9 billion cubic feet (bcf), which is three times its 2017 level.
Currently, about half of the U.S.' biogas and biomethane's production comes from landfill gas collection. But most new projects involve agricultural waste because that is the source of about a fourth of methane emissions in the U.S., so increasing use of that source could have a greater impact on meeting net carbon goals.
For the future, most growth will come from the developing world, another area in which biogases are starting from a low point. Currently, said the IEA, "Europe and North America together make up 60% of today's global demand for biogases. However, emerging market and developing economies dominate future growth...." Additionally, "China sees the largest increase in absolute terms, but India grows more rapidly, with demand tripling by 2035."
Unlike fossil fuels and renewables, including wind and solar that can boost production by adding more facilities, biomass-derived fuels depend on other-generated waste. The IEA said even so, the potential for production growth there has not been reached--yet.
"Less than 5% of the total sustainable potential for production of biogases is used currently," the IEA said. The agency sees that growing to between 17% and 25% by 2050. The IEA sees China and Europe reaching 100% exploitation of some feedstocks by that date.
Other biofuels are struggling in the U.S. In the first quarter of this year, biodiesel and renewable diesel production dropped to 2015 levels, squeezed between high production costs and uncertainties about the new administration's willingness to continue tax credits and other subsidies, according to the EIA.
"In January 2025, U.S. production of biodiesel fell to 60,000 barrels per day (BBL/d), the least since January 2015, and about 40% less than in January 2024," the EIA said. U.S. biodiesel producers only partially ramped up production in February and March, bringing the quarterly production to about 70,000 BBL/d, a decrease of more than 30% from first-quarter 2024. U.S. renewable diesel production averaged about 170,000 BBL/d in first-quarter 2025, down 12% from first-quarter 2024.
Biodiesel, which can only be mixed with petroleum-based diesel at ratios ranging from 5% to 20%, has not grown in production since 2021. However, renewable diesel, a more recent arrival to the scene but one that can replace petroleum diesel 100%, has grown significantly. In 2021, production was around 50 thousand BBL/d, the EIA said, while in fourth-quarter 2024 it was around 220,000 BBL/d.
For renewable diesel, the EIA said it expects a 5% rise over 2024 levels due to the opening of new plants. But for biodiesel, "We forecast 2025 annual biodiesel production to be 15% lower than in 2024 because of low production early in the year and an assumption that some biodiesel plants with less favorable economics may close."
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) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
But the production and consumption of biogases are poised to grow, according to a report issued by the International Energy Agency (IEA) (Paris, France).
The IEA said it sees that share rising to 5-10% by 2050. Biogases include biogas and its more-refined cousin biomethane, the latter of which can be mixed with or a replacement for natural gas. The IEA's "Outlook for Biogas and Biomethane" report, released on May 28, admits that biogases "start from a low base," which allows for plenty of growing room.
At the same time, a new report from the U.S. Department of Energy's EIA report shows U.S. production of renewable and biodiesel dropped to 10-year lows in first-quarter 2025 due to high production costs and uncertainties about tax credits under the new presidential administration.
In fact, all biofuels are challenged by high costs relative to their fossil fuel equivalents, making them reliant on quotas and tax incentives for profitability. And when used for power generation, biogases also suffer compared to wind and solar, coming in at a levelized $100 per megawatt-hour (MWh) compared with $30 per MWh for the latter two.
Gauging worldwide production, the IEA said, "In 2023, combined biogas and biomethane production globally was just under 50 bcme (billion cubic meters of natural gas equivalent)," or about 1.65 trillion cubic feet (tcf). The U.S. share of that was 6 bcme, or 211.9 billion cubic feet (bcf), which is three times its 2017 level.
Currently, about half of the U.S.' biogas and biomethane's production comes from landfill gas collection. But most new projects involve agricultural waste because that is the source of about a fourth of methane emissions in the U.S., so increasing use of that source could have a greater impact on meeting net carbon goals.
For the future, most growth will come from the developing world, another area in which biogases are starting from a low point. Currently, said the IEA, "Europe and North America together make up 60% of today's global demand for biogases. However, emerging market and developing economies dominate future growth...." Additionally, "China sees the largest increase in absolute terms, but India grows more rapidly, with demand tripling by 2035."
Unlike fossil fuels and renewables, including wind and solar that can boost production by adding more facilities, biomass-derived fuels depend on other-generated waste. The IEA said even so, the potential for production growth there has not been reached--yet.
"Less than 5% of the total sustainable potential for production of biogases is used currently," the IEA said. The agency sees that growing to between 17% and 25% by 2050. The IEA sees China and Europe reaching 100% exploitation of some feedstocks by that date.
Other biofuels are struggling in the U.S. In the first quarter of this year, biodiesel and renewable diesel production dropped to 2015 levels, squeezed between high production costs and uncertainties about the new administration's willingness to continue tax credits and other subsidies, according to the EIA.
"In January 2025, U.S. production of biodiesel fell to 60,000 barrels per day (BBL/d), the least since January 2015, and about 40% less than in January 2024," the EIA said. U.S. biodiesel producers only partially ramped up production in February and March, bringing the quarterly production to about 70,000 BBL/d, a decrease of more than 30% from first-quarter 2024. U.S. renewable diesel production averaged about 170,000 BBL/d in first-quarter 2025, down 12% from first-quarter 2024.
Biodiesel, which can only be mixed with petroleum-based diesel at ratios ranging from 5% to 20%, has not grown in production since 2021. However, renewable diesel, a more recent arrival to the scene but one that can replace petroleum diesel 100%, has grown significantly. In 2021, production was around 50 thousand BBL/d, the EIA said, while in fourth-quarter 2024 it was around 220,000 BBL/d.
For renewable diesel, the EIA said it expects a 5% rise over 2024 levels due to the opening of new plants. But for biodiesel, "We forecast 2025 annual biodiesel production to be 15% lower than in 2024 because of low production early in the year and an assumption that some biodiesel plants with less favorable economics may close."
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) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
