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IEA raises global biofuels forecast as China expands ethanol support


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London — The International Energy Agency has raised its near-term forecast for global biofuels production, pointing to faster than expected growth in ethanol flows from China where output is forecast to more than triple within five years.

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Total biofuel output is forecast to reach 190.3 billion liters (50.3 billion gallons) in 2024, a 25% increase from 2018 levels, according to the central scenario in the IEA's Renewables 2019 report published Monday. The report shows biofuels output grew by a faster than expected 7% to 154 billion liters last year while the 2023 output forecast is now 19.5billion liters higher than in last year's report.

The upward revisions mainly reflect improved market policy for biofuels in the US, Brazil and China, where biofuel output growth is now expected to be the highest of any country, the IEA said.

China and other Asian countries are rolling out policies to stimulate biofuel production in a bid to mitigate their growing dependence on imported oil as demand for road transport fuels rises fast.

In China, where ethanol is produced from corn and cassava, ethanol consumption currently satisfies around 2% of gasoline demand but output is forecast to more than triple to 11billion liters by 2024, the IEA said.

"Offsetting a larger portion of crude oil imports through higher ethanol consumption is the principal motivation behind plans to roll out E10 ethanol blends nationwide," the IEA said in its report.

Globally, the IEA estimates that all renewable energy will meet just 4.6% of transport fuel demand by 2024 -- with biofuels accounting for 93% of that -- as most biofuel mandates require blending levels of only 10% or less.


Regionally, Asia accounts for half of the IEA's projected growth to 2024, helped also by new ethanol mandates in India and policy support for biodiesel in Indonesia.

Outside Asia, the US and Brazil still provide two-thirds of total biofuel production in 2024 and make up 40% of forecast biofuel output growth over the 2019-24 period, according to the IEA.

In Brazil, the world's second-largest biofuel growth country, ethanol production is forecast to increase by 20% to around 38 billion liters by 2024 supported by a policy to boost the share of sustainable biofuels in the energy mix to 18% by 2030.

In the US, ethanol output is forecast to rise slowly from current levels of 60.1 billion liters to 62 billion liters 2024, when US production will make up almost 50% of global production. US biodiesel and hydrotreated vegetable oil output are expected to increase strongly to 12.5 billion liters by 2024, up from 7.8 billion liters in 2018.

-- Robert Perkins,

-- Edited by Alisdair Bowles,