Executive summary
India has proposed a Global Biofuel Alliance that aims to support worldwide development and deployment of sustainable biofuels. The Global Biofuel Alliance (GBA) aims to establish a global partnership of national governments, agencies, industries and other stakeholders to advance sustainable biofuels technology deployment and expand sustainable biofuels market penetration. The GBA recognises that sustainable biofuels are a pillar of the global energy transition. The GBA’s governance framework and action plan will be developed over the coming months. Biofuels offer numerous advantages. Liquid biofuels in 2022 avoided near 2 million barrels of oil per day in the transport sector, over 4% of global transport demand, helping secure energy supplies during the energy crisis. Biofuels are also compatible with existing infrastructure, can be made using wastes and residues and offer economic and employment opportunities for rural communities. Sustainable biofuel production is not on track for a net zero trajectory: Global biofuel growth through 2028 is running at less than half the rate needed to help achieve net zero emissions by mid-century based on current policies and market trends. In the IEA’s Net Zero Emissions by 2050 (NZE) Scenario, sustainable biofuel production needs to triple by 2030 to help reduce emissions from new and existing trucks, planes, ships and passenger vehicles that have few other mitigation options.

Introduction India has proposed a Global Biofuel Alliance (GBA) to bring countries together to expand and create new markets for sustainable biofuels. The sharing of best practices, the technical support and the capacity building that the GBA would bring are welcome additions to international efforts to expand sustainable biofuel production and use, a key step to decarbonising transportation and heat services with secure and affordable energy supplies. This document aims to inform and focus the Alliance’s work by sharing policy lessons from three successful biofuel countries about the role sustainable biofuels can play in energy transitions in the transport sector.

Both conventional and advanced fuels expand In the IEA’s NZE Scenario, demand for ethanol (blended with gasoline), biodiesel (blended with diesel) and biojet fuel (blended with jet fuel) expands to 2030. Most biofuels today are made from corn, sugar cane and soybeans (soyoil) with a growing share of residues such as used cooking oil1 . However, the scale and pace of growth in the NZE Scenario requires more efficient agricultural production and new processing technologies that can use feedstocks that do not compete for land with food and animal feed. Advanced fuels account for almost half of total production in 2030, a fifteen time increase from 2021 levels.

Learning from policy implementation can help expand sustainable supplies Based on current policies and market trends, global biofuel growth expected through 2028 is running at less than half the rate needed to help achieve global net zero emissions by mid-century. Moreover, biofuel production from residues or from crops grown on marginal land currently stands at only 7% of what is needed by 2030.

There are, however, policy lessons that can be learned from countries such as Brazil, the United States and India that have successfully increased biofuels production at the required pace and scale. The GBA can help disseminate these lessons to other countries and regions.

Brazil is a global pioneer in biofuels production and deployment, successfully combining biofuel mandates, financial incentives and sustainability requirements to expand secure and affordable biofuel supplies. Ethanol blending mandates began in earnest in 1975 with the ProAlcohol programme and blending has since progressively increased to the current 27% blending requirement (volume basis). Flex-fuel vehicles, which can run on gasoline or ethanol, comprise near 90% of Brazil’s light-duty vehicle fleet, allowing Brazilian consumers to choose higher ethanol blends when ethanol prices are advantageous. In 2022, total ethanol blending stood at 34% on an energy basis.

For biodiesel, blending targets were established in 2005 at 2%, progressively increased to 12% in 2023, with a target of 15% by 2026. However, Brazil had initially targeted 15% blending in 2023 but slowed the increase in 2022 because of high biodiesel and diesel prices.

India has quickly joined the ranks of major biofuel producer and consumer thanks to a set of coordinated policies, high political support, and an abundance of feedstocks. In 2018 India released its National Policy on Biofuels which set blending targets for ethanol (20% blending by 2030) and biodiesel (5% by 2030), feedstock requirements for different fuels and laid out the responsibilities of 11 ministries to coordinate government actions. Beyond blending targets, India established guaranteed pricing, long-term ethanol contracts, technical standards and codes and financial support for building new facilities and upgrading existing ones. Buoyed by its success, the Government moved the ethanol 20% volume blending target forward by 5 years to 2025-26, which was enshrined in an updated National Policy on Biofuels in 2022.

Supported by these policies, ethanol for blending in gasoline production and demand nearly tripled between 2018 and 2023 and now stands at near 12% (7% on an energy basis). Sugar cane provides most ethanol production with the remainder from food grains such as maize and surplus rice stocks determined by the Food Corporation of India. To diversify feedstocks beyond sugar cane, India provides separate pricing for maize-based ethanol and includes ethanol produced from agricultural residues such as cotton stalks, wheat straw, rice straw, bagasse and bamboo. Increasing the fleet of vehicles capable of accepting higher ethanol blending levels will require additional attention as India pursues its 20% blending target. India is encouraging flex-fuel vehicles and retrofits are possible for older vehicles, including two wheelers. In addition, a GHG measurement and reporting requirement would help India assure and improve GHG reductions from biofuel use in the transport sector.

Source:http://IEA