Bioethanol and biofuels production is projected to increase by 70 percent by 2030 due to rising fuel blend requirements in major producing countries. This increase is driven by the energy crisis stemming from conflicts in the Middle East and rising crude oil and gasoline prices. Biofuels like bioethanol, which are typically derived from agricultural products or animal feed, are becoming an economically viable and competitive option due to the rising prices of fossil fuels.
Increased fuel blend requirements in major countries
Countries such as the United States, the European Union, Brazil, India, and Indonesia have raised bioethanol fuel blend requirements since the onset of conflicts in late February. For instance, the U.S. Environmental Protection Agency (EPA) introduced the "Set 2" rule for renewable fuel standards in April for the years 2026 and 2027, which sets the highest volume of renewable fuels in the 20-year history of this program. Under this rule, the requirements for biomass-based biodiesel volume will increase to 5.4 billion gallons for 2026 and 5.7 billion gallons for 2027, a significant change from 3.35 billion gallons in 2025.
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Global impacts on bioethanol production
It is anticipated that responding to these new requirements will create a need for 6.07 billion gallons of biomass-based biodiesel in 2026, considering exports and other fuels that do not qualify for production compliance credits. Meanwhile, the European Union may soon require its members to increase the use of biofuels. Under the current Renewable Energy Directive framework, member states are obliged to achieve a 29 percent share of renewable energy in transport by 2030.
Brazil has also moved more quickly, and in July, the National Council for Energy Policy (CNPE) raised the mandatory ethanol content in gasoline to 32 percent. This is while Brazilian law allows the government to increase the ethanol content to 35 percent. The Brazilian Ministry of Energy estimates that this increase could replace about 900 million liters of gasoline imports with domestically produced ethanol. Additionally, Brazil has banned biodiesel imports and reserved its diesel quota for domestic producers.
In Indonesia, the government is launching the B50 biodiesel program, which is a blend of 50 percent palm oil, starting July 1, 2026, to halt low-quality diesel imports and achieve energy self-sufficiency. This action is similar to the palm oil export ban in 2022, which drove global edible oil prices to unprecedented levels.
However, experts warn that increasing the use of biofuels to enhance domestic energy security may come at a heavy cost. Estimates suggest that expanding this industry could double the land area required for producing bioethanol feedstocks by 2030 to 36 million hectares (85 million acres), equivalent to the area of Germany. This expansion could threaten global efforts to strengthen food security and shift resources for producing staple food crops like corn and rice to biofuels.
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