Global investment in biofuels is set to grow by 13pc in 2025 to more than $16bn, as part of a broader surge in low-emissions fuel spending, according to the IEA.
The IEA's World Energy Investment report projects a 30pc year-on-year increase in total investment in low-emissions fuels — including biofuels, biogases and low-emissions hydrogen — reaching nearly $25bn this year. This follows a 20pc rise in 2024.
But regional trends diverge. Europe leads in overall spending but is prioritising biogas over liquid biofuels such as biodiesel, ethanol and biogenic sustainable aviation fuel (SAF). The region accounted for 60pc of global biogas investment last year but lagged behind the US, China and Brazil in liquid biofuels.
The US and Brazil dominate biodiesel and ethanol investment. Their spending is several times higher than in Europe. Brazil's role is expected to expand further following its Fuels of the Future bill, which was signed into law last year.
The US is also driving growth in hydrotreated vegetable oil (HVO) and SAF. It accounts for half of the 40pc projected increase in HVO and SAF output this year, which the IEA expects to reach 800,000 b/d. In 2024, the US made up 70pc of global SAF investment.
The IEA forecasts fossil fuel investment will decline in 2025 for the first time since 2020. This will lift the share of low-emissions fuels — including biofuels — in global energy investment, although they will still account for only around 3pc of the total.
