Global biofuels production could climb by nearly 70% by 2030 as major producing countries raise mandatory blending requirements for gasoline and diesel, according to a study co-authored by Chatham House and the Forest Stewardship Council and cited by Reuters.
The report says the shift has gathered pace as governments respond to the energy crisis intensified by the Middle East conflict. When crude and gasoline prices rise, ethanol and other biofuels become more competitive, making them a more attractive tool for boosting energy security.
The United States, the European Union, Brazil, India and Indonesia have all adopted or proposed higher blending mandates in recent months. That is lifting demand for ethanol, biodiesel and feedstocks including corn, sugar cane, soy, vegetable oils and palm oil.
Policy moves in the U.S., EU, Brazil and Indonesia
In the United States, the Environmental Protection Agency (EPA) in April unveiled the Renewable Fuel Standard (RFS) “Set 2” rule for 2026 and 2027. The measure sets the highest renewable fuel volume mandates in the 20-year history of the program. Biomass-based diesel requirements were raised to 5.4 billion gallons for 2026 and 5.7 billion gallons for 2027, up from 3.35 billion gallons in 2025.
EPA estimates that meeting the new requirements will require about 6.07 billion gallons of biomass-based diesel in 2026 after accounting for exports and fuel that does not generate compliance credits. The agency also issued an emergency waiver allowing nationwide sales of E15 gasoline during the summer driving season in a bid to lower pump prices and increase supply.
In the European Union, the current Renewable Energy Directive framework requires member states to reach a 29% share of renewable energy in transport by 2030. But subsequent policy changes and leaked draft updates to RED IV indicate that the bloc may further adjust eligible volumes, including a proposal to increase eligible volumes for crop-based biofuels by 30% under a 7% EU-wide cap.
Brazil has moved faster still. In July, the National Energy Policy Council (CNPE) temporarily raised the mandatory ethanol content in gasoline to 32%, after increasing the blend from 27% to 30% in June 2025. Brazilian law allows the government to lift the ethanol mandate as high as 35%. The Energy Ministry estimates that E32 will replace about 900 million liters of gasoline imports each year with domestically produced ethanol. Brazil has also banned biodiesel imports, reserving its diesel blending market for local producers.
In Indonesia, the government launched its mandatory B50 biodiesel program on July 1, 2026, requiring a 50% palm-oil-based blend in conventional diesel. Officials say the move is intended to halt imports of low-grade diesel and strengthen energy self-sufficiency. Indonesia is the world’s leading palm oil producer, with annual output of more than 45 million metric tons, more than double the volume produced by second-ranked Malaysia.
Food security and land-use concerns
Researchers warn that the push for energy security could come with a substantial cost. If all proposed blending mandates are fully implemented, the land needed worldwide to grow biofuel feedstocks could nearly double by 2030, the study says. That would require an additional 36 million hectares, or 85 million acres, roughly the size of Germany.
According to the report, such an expansion could undermine global food security efforts by diverting land and resources away from primary food crops such as corn, rice, soybeans, sugar cane and vegetable oils. The authors caution that any additional shock, including extreme weather, could sharply worsen pressure on food prices.
They also warn that blending mandates are being raised so quickly that feedstock demand may outpace the rollout of environmental safeguards, certification systems, land-use planning and enforcement mechanisms.
Back in April, the International Council on Clean Transportation (ICCT) warned that the shipping sector alone could drive biofuel demand to 140 billion litres by 2035. That would be roughly three times the entire current global market for vegetable-oil biofuels. Such an increase, the group said, could triple vegetable oil prices and add to the burden on low-income households, food-importing countries and the nearly 700 million people worldwide living with food insecurity.
