According to International Energy Agency (IEA) website publication on Renewables 2022 Analysis and forecast to 2027 report:
Demand in other markets(21) grows 35% to 26 700 MLPY over 2022-2027 in the main case, with Canada’s Clean Fuel Standard and strengthened blending requirements in Malaysia, Thailand and Argentina driving expansion. In emerging markets, growing demand for gasoline and diesel also accelerates biofuel use. While production expands in these countries to satisfy domestic demand, imports are also necessary in some. For instance, Canada’s imports nearly double over the forecast period while greater production in Singapore and China permits exports to European and North American markets.
In July 2022, Canada released the final version of its Clean Fuel Regulations, requiring fuel producers and importers to reduce the carbon intensity of their fuels by 14 g CO2-eq/MJ by 2030. This policy alone will prompt around 2 300 MLPY of new demand.
Meanwhile, Malaysia plans to roll out its 20% biodiesel blending target for transport at the end of 2022. This mandate, combined with growing diesel demand, doubles biodiesel use by 2027.
In Thailand, pursuit of its 20% ethanol target and 10% biodiesel target, combined with increasing gasoline and diesel demand, drive a 30% increase in biofuel demand.
In 2022, Argentina temporarily allowed biodiesel blending of up to 12.5% to help guard against diesel shortages in the country, which created a sharp doubling in biodiesel demand this year. We therefore assume a 10% blending rate for the remainder of the forecast period.
In China, biofuel consumption increases 10% to 5 400 MLPY, primarily because of higher gasoline and diesel demand. Meanwhile, biojet fuel demand expands to meet the Chinese Civil Aviation Administration’s 50 000-tonne (62.5-million-litre) biojet fuel target. China also reiterated its commitment to develop advanced fuels in the National Development and Reform Commission’s May 2022 bioenergy plan.
Although biofuel production in all these countries expands to supply growing domestic use, both Singapore and China raise renewable diesel and biojet fuel production by 60% to also satisfy export market demands in the main case. Most of these fuels are made using wastes and residues to meet European policy stipulations as well as the low GHG emissions requirements of California’s LowCarbon Fuel Standard and Canada’s Clean Fuel Regulations.
In the accelerated case, demand and production growth are three times higher than in the main case. China alone accounts for more than half of this potential: if its blending requirements are consistent with the IEA’s Net Zero Emissions by 2050 Scenario, growth jumps to 11 300 MLPY over the forecast period.
There is also scope for greater demand growth in Malaysia, Argentina and Thailand if these countries pursue more stringent policies (see Policy and Assumption table below). Production in these countries would also expand to satisfy domestic usage. At the same time, renewable diesel and biojet fuel production also increase, especially in Singapore and Paraguay, assuming global consumption increases enough to justify new projects to serve export markets in Europe and North America.
(21) Remaining countries account for 15% of global supply and demand. The top five in demand in 2021 were China, Canada, Thailand, Argentina and Malaysia.
