Wedoany.com Report on Feb 13th, According to SGS INSPIRE analysis, the global biofuel market is facing policy changes and geopolitical impacts. Before 2026, many countries will advance mandatory use requirements. For instance, Vietnam will implement the E10 gasoline standard starting June 1st, and Indonesia plans to increase the biodiesel blending ratio from B40 to B50. Bio-based fuels in the Asia-Pacific region are expected to reduce dependence on fuel imports. However, implementation details, such as Indonesia's B50 plan, may differentiate into regular diesel B50 and premium diesel B40D10 due to the higher cost of paraffinic diesel.
In Europe, EU member states are transposing the Renewable Energy Directive (RED) III into national laws, but slow progress is creating market uncertainty, potentially leading to delays in renewable fuel projects. Non-EU countries like Switzerland will enforce mandatory Sustainable Aviation Fuel (SAF) requirements effective January 1, 2026. In the United States, low-carbon fuel tax credits are under federal review, and state-level programs like the Low Carbon Fuel Standard (LCFS) will intensify compliance disparities.
Volatility in the U.S. renewable fuel market may increase. Key factors include the undetermined rules for the 45Z Clean Fuel Production Tax Credit and tight feedstock markets. Ethanol demand might benefit from the promotion of E15 blending, but infrastructure limitations could constrain growth. If the Environmental Protection Agency's proposed Renewable Fuel Standard volumes for 2026-2027 are adopted, biofuel blending obligations will be raised.
Biofuel expansion is accelerating in Latin America. Brazil is projected to produce 40 billion liters of ethanol, with its biodiesel blending ratio rising to 16%. Costa Rica, Guatemala, and Panama will introduce mandatory ethanol blending requirements. Regarding SAF, Brazil is evaluating ethanol-to-SAF projects, and Colombia targets a 1% SAF blending ratio. In Africa, Uganda has already enforced mandatory ethanol blending, Ethiopia and Ghana are advancing biofuel frameworks, while Namibia and South Africa are planning hydrogen energy legislation.
