A 30-fold increase in advanced biofuel industrial capacity possible by 2030

A new report examines how advanced biofuels can contribute to reducing emissions in EU transport as part of the EU's industrial competitiveness and decarbonisation policy.

Advanced biofuels can be sustainably produced domestically, the report concludes, without dependencies for technologies and feedstock. EU-coordinated financial support for capacity development of essential industrial value chains would be necessary. It should cover industrial production development and feedstock supply mobilisation by farmers and feedstock aggregators.

According to the report, achieving EU targets will require a portfolio of complementary solutions for 2030-2040, made up from a diverse mix of technologies. This is needed so that the full range of eligible feedstocks can be used to produce the complete spectrum of necessary fuels.

Through developing business models of industrial value chains, the report estimates that financial support will be required to close the gap between the biofuels' Levelised Cost of Production (LCoP) and the market price of their fossil fuel counterparts. By 2030, annual financial support to build industrial plants for biofuel production would need to range between €3.8 and €7.5 billion.

Additional annual support of €700 million to €1.25 billion would be required as a direct disbursement to farmers and aggregators for providing the necessary feedstock. Even higher level of support would be needed for deployment towards 2040. Existing EU funding schemes and instruments at EU level, such as the InvestEU, the Connecting Europe Facility, the European Regional Development Fund, and the Common Agricultural Policy Pillar I and II instruments, can incentivise industrial capacity building and feedstock supply.

Finally, the report stresses that financial measures should be complemented by administrative support. Better alignment between the Common Agricultural Policy and the Renewable Energy Directive would be needed, as well as improvements in registries and sustainability certification system.

The report is a follow up of an earlier published report and was presented recently at the European Parliament eventfor transport decarbonisation.

Background

The report supports the implementation of EU climate and energy policies by assessing how to scale up industrial capacity for advanced biofuels to meet the targets set under the Fit for 55 package and the EU's climate neutrality goals.

Advanced biofuels are explicitly included in key EU initiatives, notably the revised Renewable Energy Directive (Article 25 on renewable fuels in transport), ReFuelEU Aviation, FuelEU Maritime, and the REPowerEU biomethane target for 2030. They are also recognised as eligible technologies under the Net Zero Industry Act and contribute to the objectives of the Clean Industrial Deal.

By providing data on industrial value chains, capacity development and financing needs, the report supports ongoing policy initiatives, including the Sustainable Transport Investment Plan and the revision of CO₂ standards for cars and vans.

More information

Full report

Executive Summary

Infographics

Annex : industrial value chains business models

Annex : EU available funding for advanced biofuels

Energy research and innovation