October 28, 2025 [Supply Chain Digital]- IEA forecasts global biofuel use will rise fourfold by 2035, demanding major upgrades to supply chains, policy and investment across industries

If the future of energy rests on sustainable fuels, then supply chains are about to become the make-or-break point.

The International Energy Agency (IEA), under the leadership of Executive Director Fatih Birol, lays out a clear picture: global production of renewable biofuels is set to quadruple by 2035. But to make that happen, the links between policy, infrastructure and supply logistics must tighten.

The IEA’s latest assessment, developed in preparation for COP30, explores what the world needs to do to scale up production and use of biofuels, biogas and hydrogen-based fuels across transport, heavy industry and power generation.

It states: “Between 2010 and 2024, global demand for sustainable liquid and gaseous fuels doubled.” However, if that pace continues without further intervention, the world risks falling short of climate goals.

Today, sustainable fuels make up only 1.3% of global energy consumption. Within that figure, nearly 80% consists of liquid biofuels. Even so, these fuels have already shaved around 2.5 million barrels off daily global oil demand in 2024.

For some countries, this shift cuts dependence on imported transport fuels by 5–15%.

Transport at the centre of fuel growth

In the IEA’s accelerated scenario, where all planned policies are legislated, market barriers removed and production scaled, the use of sustainable fuels climbs from current levels to 13 exajoules by 2030 and 28 exajoules by 2035.

Transport stands as the key sector. By 2035, half of all sustainable fuel consumption is forecast to come from transport. That includes 10% of road transport, 15% of aviation and 35% of shipping. This demand places added weight on fuel supply chains, from biofuel feedstock production to distribution.

Governments are urged to act on six fronts, including establishing clear roadmaps and building systems for carbon accounting.

“Accelerating the deployment of sustainable fuels requires a mix of ambitious, stable and enforceable policies, such as mandates and performance standards, along with proactive public procurement,” according to the analysis.

The private sector shares the view. Alice Henry, Co-Founder and CEO of RegenRate, a UK-based firm focused on feedstock cultivation, says: “We need policy on our side. We need rules that reward farmers for doing the right thing, and certification that’s fast, fair and rooted in reality.”

Behind the scenes, the pressure is on suppliers to manage logistics. Transporting biofuels and hydrogen products safely, while ensuring traceability and compliance, adds complexity to global energy flows.

High costs, slow gains and critical gaps

While the transition is under way, costs remain a sticking point. Electrolytic hydrogen, made using electricity, is 3.8 times more expensive than fossil alternatives. Electrolytic ammonia is 2.7 times costlier, while biomethanol costs 3.7 times more.

However, because blending rates are low and energy contributes a small share to most final product costs, consumer impact stays limited. A 15% blend of sustainable aviation fuel, for example, adds 5–7% to airline ticket prices. Steel produced with hydrogen adds less than 1% to electric vehicle prices.

The IEA warns that “policies that address only one dimension risk leaving critical gaps.” It promotes an integrated approach with long-term demand signals, support for early-stage technologies and strong international cooperation.

Without investment in supply chain infrastructure, from refineries and pipelines to storage and certification, the scale-up will hit bottlenecks. Labour, too, becomes part of the chain. Direct employment across the sustainable fuels sector is expected to triple, reaching 2 million jobs by 2035, with two-thirds tied to liquid and gaseous biofuels.

That growth requires training programmes, transport logistics, and coordination across agriculture, chemical processing and energy markets.

Hydrogen funding climbs, but regional gaps stay

The technology mix is changing. By 2035, hydrogen-based fuels, like renewable methanol, will make up a third of sustainable fuel use, rising from just 1% today.

Still, liquid and gaseous biofuels are forecast to hold a two-thirds share. The shift means broader supply chain support for hydrogen production, storage and delivery is needed fast.

“With $1.5tn in sustainable fuel investments expected through 2035, and hydrogen-based fuels accounting for nearly half, renewable methanol is positioned as a vital solution for shipping, chemicals and beyond,” says Antonio Villaluenga, VP for US Project Development at Carbon Recycling International.

Yet these investments will not be uniform.

“National shares, mixes and volumes would still vary widely depending on regional conditions,” the report notes. Climate, land use, infrastructure and regulation all affect how much of which fuel each country can produce and consume.

The IEA says no single fuel type or feedstock can do the job alone. Delivering this scale of growth will depend on multiple supply chain improvements across production, transport, certification and workforce planning.

The global shift to sustainable fuels is now less about innovation and more about execution. Governments and industries alike face the challenge of aligning policies, financing and supply networks to make the IEA’s projection reality.