Biofuel demand set to soar by 2030, creating risk of global food shortages

Biofuel demand set to soar

A new report from T&E (Transport & Environment) has warned that biofuel demand is set to soar by 2030, creating a strong risk of global food shortages. The researchers claim that high oil prices resulting from the Middle East crisis are accelerating the global biofuels push, along with increasingly ambitious biofuel targets put in place by governments. When taken together, this risks putting further strain on already tight global food and fertiliser markets.

The closure of the Strait of Hormuz in March has severely disrupted global supply chains and destabilised energy, fertiliser, and food markets, T&E note. They argue that this has helped escalate demand for biofuels as an alternative to increasingly expensive fossil fuels. This in turn threatens to worsen the unfolding food crisis, as key food commodities including vegetable oils, sugar, and corn keep being diverted from food supplies. The US is already forecasting that food prices will rise this year by between 2.2% and 4.7%, largely due to the impacts of the war in Iran[i].

Even before the latest crisis, demand for biofuels was on the rise. According to the 2025 Global Bioenergy Statistics report from the World Bioenergy Association (WBA), Biofuels accounted for 4% of total transport energy, and 89% of all renewable fuel alternatives in 2023[ii]. Additionally, biofuel consumption increased by 12% in 2023, marking the largest rise in more than a decade.

Governments ‘playing a dangerous game’

The researchers claim that, in response to the current crisis, governments are ‘playing a dangerous game’- where big agri-food powers such as the US, Brazil, India, and Indonesia are ramping up their biofuel targets at the risk of further increasing prices for agricultural commodities and redirecting resources from plates to fuel tanks. T&E forecast that if proposed mandates are fully implemented then global biofuel demand could surge by 70% by 2030. They note that to meet 20% of global fuel demand with crop-based biofuels, there would need to be a five-fold increase in consumption, potentially requiring agricultural land the size of South Africa.

Additionally, pressure is mounting on global food production due to a shortage of key fertiliser feedstocks. T&E analysis of trade data shows that the world's top biofuel-producing nations source half of their finished fertiliser nutrient imports from Russia, the Middle East and China. Presently, global biofuel mandates require around 7 Mt of nitrogen, phosphate and potash nutrients combined. This is equivalent to around half of Middle Eastern countries’ fertiliser exports being “burned” for fuel.

Whilst this only represents 5% of total global fertiliser nutrients being diverted to fuel, the strain is particularly high in mandate-heavy nations. For example, Indonesia and the United States direct 17% and 11% of their respective fertiliser supplies solely to meet biofuel requirements. Projected increases in blending mandates will further deplete global fertiliser volumes, potentially reaching 7% of today’s consumption by 2030, T&E find.

Alongside the growing battle between food and fuel crops for agricultural land and fertiliser, the historical link between fuel prices and food price inflation has once again reared its head. According to the Food and Agriculture Organization (FAO), prices for most food commodity groups (particularly vegetable oils) have increased over the past three months largely as a result of the energy crisis from the strait of Hormuz closure.

Kädi Ristkok, energy and climate director at T&E, has said: “Governments are playing a dangerous game by promoting food for fuel. Leaders are understandably trying to find solutions to the current oil crisis, but biofuels can never play more than a marginal role in our energy system without devastating consequences. The unintended impacts on food prices and the environment are enormous. Instead of feeding cars, governments must pursue more sustainable options like electrification.”[iii]

Beyond agriculture, concerns about crop-based biofuels have also emerged in other sectors, particularly maritime where last year major shipping companies called on the IMO (International Maritime Organization) to exclude biofuels from its list of green alternatives to traditional fossil fuels. In a joint statement, companies including Hapag-Lloyd AG, Hurtigruten, and Louis Dreyfus Armateurs, as well as T&E called for the IMO to exclude crop-based biofuels from regulatory compliance.

They argued that unless legally binding safeguards were introduced, there was a risk that fossil fuels would be replaced with ‘unsustainable biofuels’, noting that in 2009 the EU’s push towards biofuels led to consumption of palm oil-based biofuels doubling between 2010 and 2020. Scientific evidence, they claim, later demonstrated that 45% of palm oil expansion happened at the expense of carbon rich ecosystems like forests or peatlands over that same period[iv]. Similar findings have been uncovered for other crop-based feedstock such as soy, they suggest.

T&E propose that to prevent the energy crisis from triggering a systemic collapse in food security, policy interventions must be deployed to address the market distortions caused by biofuel targets. They suggest the following five measures to be taken:

1. Prioritise food production over biofuels, ensuring no rollbacks on existing crop-fuel exclusions and caps to avoid competition with food, as well as introducing limits where they are missing in national policies and international frameworks.

2. Equip biofuel policies with an “emergency brake" mechanism that cancels first generation biofuels’ contribution to mandates, to mitigate the direct inflationary impact that they have on food security.

3. Ensure strict implementation of the cascading use of biomass principle and apply it to fertiliser use. This prioritises nutrients for food production, rather than for lowest value applications such as biofuels.

4. Reallocate crop biofuel subsidies from energy and agricultural policies towards resilient food production. Support for circular, domestic fertiliser supply chains and environmentally friendly practices would curtail fertilisers import dependency.

5. Transition away from first generation biofuels by accelerating electrification and increasing investments in renewable e-fuels to enhance energy resilience[v].

Food security at risk

Compounding these pressures on food security, climate change is further destabilising global food supply, with effects such as heat stress set to occur more frequently, affecting agricultural workers across the globe. Recently the Energy and Climate Intelligence Unit (ECIU) warned that more than a tenth of the UK’s food imports are at risk from rising heat stress on farmers in developing nations. Nations most exposed and least resilient to climate change-driven extremes were the source of 13% of UK food imports, worth £8.9 billion.

This includes rice from India, soft and citrus fruits like grapes, lemons, oranges and nectarines from South Africa, Peru and Egypt, coffee from Vietnam and Brazil, cocoa beans from Cote d’Ivoire and Ghana, Colombian and Ecuadorean bananas, and Kenyan tea[vi].

In 2024, agricultural workers across these 15 countries lost an estimated 216 billion hours to heat stress (roughly 590 hours per worker) and losses are increasing by four to five hours per worker per year. The ECIU notes that the UK imports two fifths of its food, and in two years (2022, and 2023), climate impacts added around £360 to the average UK household food bill.

Gareth Redmond-King, Head of International Programme at the ECIU comments:

“The UK government’s national security advisors, along with the Climate Change Committee, and some the world’s leading food security experts, are warning with increasing urgency that we risk sleepwalking into a food crisis. The threat from climate change is growing, hitting the food crops themselves, but also the workers we rely on to produce them.” [vii]

He adds: “With a powerful El Niño about to land on top of climate change, unless farmers here in the UK, and in the countries that grow our food are supported to shift towards more resilient, sustainable forms of agriculture, everyone’s food security is at risk. But unless we halt climate change, with reaching net zero emissions being the only way to do that, heat in the fields will continue to spiral and no form of adaptation will make that bearable for farmers threatening them and the food they grow for us.”[viii]

Taken together, the convergence of energy insecurity, biofuel expansion, and climate pressures highlights a growing risk that global food systems may be pushed beyond their limits in the years to 2030.