The International Energy Agency (IEA) has released its annual Renewables 2024 report, which analyses the current and expected use of renewable energy sources through 2030. While renewable fuels are crucial for a sustainable future and the energy transition, their share is growing more slowly than desired. According to the report, renewable fuels will meet only 2030% of global energy demand in 6, which is far from the goal of achieving net zero emissions by 2050.
The report provides insights into the key sectors benefiting from renewable fuels, such as transport, industry and buildings, but also highlights the complex challenges that limit faster growth. Renewable fuel deployment is being driven by policy in countries such as Brazil, China, Europe, India and the United States, but the level of policy support varies widely by region, fuel type and sector.
Bioenergy takes the lead in growth
Bioenergy, including liquid, gaseous and solid fuels, is emerging as a dominant player and is expected to account for 95% of the growth of renewable fuels up to 2030. Bioenergy is increasingly being used, especially in industry, transport and the built environment. Solid bioenergy remains indispensable for heat production in the industrial sector and in emerging economies such as India, where biomass as a by-product of, for example, sugar cane is used for energy production.
Biofuels for transport and aviation
Biofuels remain dominant for road transport, but will also increasingly be used in aviation and maritime transport. In the aviation sector, where demand for biofuels is expected to rise to 2% of total supply by 2030, EU and UK mandates are driving significant demand growth. Growth is also on the rise in maritime transport, driven by EU policy.
An additional challenge is the increasing competition for residual oils, such as used cooking oil and tallow, the demand for which is expected to increase by 70% by 2030. These raw materials are essential for the production of low carbon intensity biofuels. The demand is driving trade expansion, mainly through the import of these scarce oils.
Biogas and hydrogen: the rise of new renewable fuels
Demand for biogases, including biomethane, is growing by 30%, mainly in the United States and Europe. Biomethane, as a renewable fuel, is a promising solution for decarbonizing sectors that are difficult to electrify, such as transportation and industry. Biogas infrastructure and supply chains are also being expanded in countries such as India and China to prepare for future demand.
Furthermore, the IEA predicts strong growth in demand for renewable hydrogen and e-fuels in transport and industry. By 2030, around 40% of renewable hydrogen demand will come from the transport sector, driven by policy measures in the United States, Europe and China. The remaining demand will mainly consist of applications in the chemical industry and for low-emission steelmaking.
Policy crucial for acceleration of renewable fuels
To meet the IEA’s 2050 targets, renewable fuel use will need to nearly double by 2030, while current market projections only predict growth of 20%. This slow growth rate can be accelerated by policies that close the cost gap with fossil fuels, foster innovation, strengthen supply chains and implement sustainability requirements. Policymakers are called upon to take action by removing fossil fuel subsidies and providing the necessary support to achieve the energy transition.
While renewable fuels are an essential link in the path to a low-carbon future, much work remains to be done to realise their full potential.
