London — World biofuel production is estimated to grow by around 16% over the next five years, well above expected growth for oil demand and in-line with previous estimates, despite the prospect of a sharp rise in sales of electric vehicles, the International Energy Agency said Wednesday.
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Global production of conventional biofuels will reach 158.8 billion liters, (around 2.74 million b/d) in 2022, representing a 2.6% average annual growth rate from 2017, according to the IEA's latest medium-term outlook on renewable energy.
The figure represents a growth rate of more than double the 1.2%/year expected for oil over the same period and is broadly in line with the IEA's most recent medium-term oil outlook, published in March, which sees biofuels supply hitting 2.8 million b/d in 2022.
With China and Europe expected to lead the charge in sales of electric vehicles in the coming years, the prospects for future demand for biofuels to fuel conventional vehicles have come under scrutiny.
But despite surging EV sales, the IEA said it continues to see the penetration of EV in the global car fleet as limited until 2022, when biofuels are still expected to represent more than 90% of total renewable energy consumption in road transport.
Overall, however, the share of biofuels in road transport is expected to increase only marginally, from over 4% in 2016 to 4.5% in 2022.
"Higher growth in this share is not achieved because of upward trends in fossil gasoline and diesel demand in many markets," the IEA said in the report. "For biofuels to offset this growth in petroleum product demand, consumption of higher biofuel blends and unblended 'drop-in' biofuels would need to increase further still."
The IEA in March predicted global oil product demand growth of 1.2%/year to 2022, equivalent to a net gain of 7.3 million b/d, driven largely by the transport and petrochemical sectors.
In its renewables report, the IEA estimates EVs will contribute less than 7% of all renewable energy consumed in road transport globally by 2022. Combined, biofuels and EVs are anticipated to reach 4.8% of total energy consumption for road transport in 2022, according to the report.
HIGHER GROWTH POTENTIAL
With much of the growth in electric vehiclessales expected in Europe in the coming years, over a third of the growth in biofuel demand will occur in Asia to meet fast-rising levels of vehicle ownership, the IEA said.
The report also notes that, with most biofuels used blended with fossil fuels, higher demand for transport fuel overall will also support growth in the biofuels industry.
"For biofuels to obtain a markedly greater share of global transport fuel demand, stronger growth will be required in the consumption of unblended biofuels and fuels with higher biofuel blend shares," the IEA concludes.
Citing am "accelerated case" forecast for biofuels for the first time, the IEA estimates that global biofuel production could increase to 178 billion liters by 2022, a 12% increase on its central forecast for the period.
The higher levels would be dependent on more favorable market and policy landscape, the IEA said, particularly higher spending production capacity in Brazil and greater fuel distribution infrastructure in the US.