
The 2024 biofuels market was wrought with uncertainty and hesitation. Substantial shifts in the market occurred thanks to the EU’s anti-dumping ruling on Chinese biodiesel, the delay in EUDR enforcement, and a Trump win in the US.
Despite these developments, the market also saw impressive growth, adoption, and attention across multiple sectors. SAF in aviation and bio-bunkering in marine transportation were the big winners, with the latter seeing an especially rapid refocus toward renewables.
2025 will undoubtedly be filled with surprises and unanticipated market turns. Despite these ambiguities, let's explore six predictions in the biofuels market for the year ahead.
Biofuels Market Predictions
1. SAF demand will take off under EU/UK legislation, gradually establishing itself in regular trading and fundamentals.
SAF demand has already skyrocketed over the last year. As new blending mandates and regulations take effect in Europe, demand will only continue to surge to meet it.
The EU’s ReFuelEU Aviation regulation began requiring a minimum of 2% SAF blended into all fuels supplied in EU airports. This mandate will continue to increase over the next five years to 6% in 2030. From there, it will rise to 20% blending by 2035 and 70% by 2050.
RefuelEU also includes requirements on e-fuels, synthetic fuels created from carbon dioxide, hydrogen, and nitrogen and produced using renewable energy. A 0.7% blend will be required by 2030, increasing to 35% by 2050.
The mandate applies to all EU-based airports and airlines operating in the union. Suppliers who fail to comply with these blending requirements could face penalties.
Similarly, the UK began a 2% SAF blending requirement at the start of 2025. The mandated amount will gradually increase to 10% in 2030 and 22% in 2040.
The large-scale mandated usage of SAF will immediately boost demand to accommodate the requirements. Accordingly, we will likely see SAF appear across trading and fundamentals more than ever before.
2. Maritime biofuels demand will ignite under EU directive, new IMO legislation.
One of the most significant areas of growth within the biofuels market in 2024 occurred in the maritime industry. Key ports in Singapore and the Amsterdam Rotterdam Antwerp (ARA) region rolled out bio-bunkering adoption. The momentum seems to be continuing with a domino effect of other global ports following suit.
The EU’s FuelEU regulation took effect at the start of 2025—albeit with implementation delays for Norway and Iceland. The regulation sets annual limits for greenhouse gas (GHG) emissions from vessels that are above the 5,000 gross tonnage threshold and call at any European port (even if the vessel is from a non-EU country). 2025 marks the beginning of the regulation, mandating a 2% decrease that will slowly reach an 80% GHG reduction by 2050.
Furthermore, the International Maritime Organization (IMO) released its Carbon Intensity Regulator (CII) which aims to help vessels improve their overall carbon efficiency. Some ambiguity persists on the IMO’s targets and realistic pathways for maritime operators to achieve them. However, short-term adoption of marine biofuels will continue to surge as they gain global traction.
3. Major international corporations will have to publish their first public financial-style reports on emissions reduction progress under CSRD.
2024 marked the first reporting period under the Corporate Sustainability Reporting Directive (CSRD). In 2025, corporations will now need to make public their emissions strategy and progress in the first annual report.
Reports must include elements such as GHG emissions (scopes 1, 2, and 3), climate risks, and overall energy consumption in relation to global sustainability standards. Although some delays and implementation questions persist, we’ll begin to see these reports take shape much more concretely in 2025.
4. Expect demand growth for non-mandated discretionary physical carbon mitigation solutions.
Mandates will directly impact specified regions and markets within the biofuels industry. Consequently, we’ll see some carbon mitigation achieved through these means.
However, the trend toward carbon mitigation will likely not be limited to mandates and requirements alone. Forward-thinking companies have already begun transitioning their operations to reduce their carbon footprint. Many more will follow suit this year to get ahead of even more mandates and laws likely to come.
This increasing momentum will also open a wider space for non-mandated carbon mitigation solutions. For instance, the rising carbon capture and storage (CCS) industry is forecast to experience massive growth throughout 2025 and beyond.
5. Carbon removal markets will welcome their first sets of official standards governing usage.
Speaking of CCS, the growing development and implementation of this technology will also create a need for some sort of common usage standards to govern it. This could look like an independent organization or fall under a pre-established group such as Science Based Targets aimed at verifiable and achievable international operating standards.
6. Trump tariffs will require higher US support for biofuels to offset a weaker agricultural export outlook
As the Trump administration enters office, some clarity on the previously murky 45Z biofuel guidelines has already been offered. With this clarity, however, comes an extensive amount of lingering uncertainty.
One of the largest areas of confusion is exactly how Trump’s tariff plan will affect international markets. Some analysts predict a weakened export climate within US agriculture. Yet this comes as 45Z and other policies seem to reinforce US self-reliance on its own feedstocks for biofuel production.
As these policies and regulations come together, we are likely to see this perspective continue for domestic biofuels with a strong focus on US resources to produce them.
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