Biofuels
markets
Transformation
MVAventures
MVAventures

2025 will undoubtedly be filled with surprises and unanticipated turns in the global markets of biofuels. Despite these ambiguities, let’s explore 4 reasons that will transform the biofuels markets in 2025.

The 2024 biofuels market was wrought with uncertainty and hesitation. Substantial shifts in the market occurred thanks to the EU’s anti-dumping ruling on Chinese biodiesel, the delay in EUDR enforcement, and a Trump win in the US.

Despite these developments, the market also saw impressive growth, adoption, and attention across multiple sectors. SAF in aviation and bio-bunkering in marine transportation were the big winners, with the latter seeing an especially rapid refocus toward renewables.

MVAventures

1. SAF demand will take off

The first of the 4 reasons that will transform the biofuels markets in 2025 is the EU/UK regulations. SAF demand has already grown over the last year. As new blending mandates and regulations take effect in Europe, demand will only continue to surge to meet it.

The EU’s ReFuelEU Aviation regulation began requiring a minimum of 2% SAF blended into all fuels supplied in EU airports. This mandate will continue to increase over the next five years to 6% in 2030. From there, it will rise to 20% blending by 2035 and 70% by 2050.

RefuelEU also includes requirements on e-fuels, synthetic fuels created from carbon dioxide, hydrogen, and nitrogen and produced using renewable energy. A 0.7% blend will be required by 2030, increasing to 35% by 2050.

The mandate applies to all EU-based airports and airlines operating in the union. Suppliers who fail to comply with these blending requirements could face penalties.

Similarly, the UK began a 2% SAF blending requirement at the start of 2025. The mandated amount will gradually increase to 10% in 2030 and 22% in 2040.

The large-scale mandated usage of SAF will immediately boost demand to accommodate the requirements. Accordingly, we will likely see SAF appear across trading and fundamentals more than ever before.

MVAventures

2. Maritime biofuels demand will ignite

One of the most significant areas of growth within the biofuels market in 2024 occurred in the maritime industry. Key ports in Singapore and the Amsterdam Rotterdam Antwerp (ARA) region rolled out bio-bunkering adoption. The momentum seems to be continuing with a domino effect of other global ports following suit.

The EU’s FuelEU regulation took effect at the start of 2025—albeit with implementation delays for Norway and Iceland. The regulation sets annual limits for greenhouse gas (GHG) emissions from vessels that are above the 5,000 gross tonnage threshold and call at any European port (even if the vessel is from a non-EU country). 2025 marks the beginning of the regulation, mandating a 2% decrease that will slowly reach an 80% GHG reduction by 2050.

Furthermore, the International Maritime Organization (IMO) released its Carbon Intensity Regulator (CII) which aims to help vessels improve their overall carbon efficiency. Some ambiguity persists on the IMO’s targets and realistic pathways for maritime operators to achieve them. However, short-term adoption of marine biofuels will continue to surge as they gain global traction.

Biofuels markets
Transform
2025
MVAventures

3. CSRD reporting obligation on emissions reduction

Another of the 4 reasons that will transform biofuels markets in 2025 is the first reporting requirement under the Corporate Sustainability Reporting Directive (CSRD). In 2025, corporations will now need to make public their emissions strategy and progress in the first annual report.

Reports must include elements such as GHG emissions (scopes 1, 2, and 3), climate risks, and overall energy consumption in relation to global sustainability standards. Although some delays and implementation questions persist, we’ll begin to see these reports take shape much more concretely in 2025.

MVAventures

4. Discretionary physical carbon mitigation demand

Mandates will directly impact specified regions and markets within the biofuels industry. Consequently, we’ll see some carbon mitigation achieved through these means.

However, the trend toward carbon mitigation will likely not be limited to mandates and requirements alone. Forward-thinking companies have already begun transitioning their operations to reduce their carbon footprint. Many more will follow suit this year to get ahead of even more mandates and laws likely to come.

This increasing momentum will also open a wider space for non-mandated carbon mitigation solutions. For instance, the rising carbon capture and storage (CCS) industry is forecast to experience massive growth throughout 2025 and beyond.

MVAventures

Conclusion

As these 4 reasons that will transform the biofuels markets in 2025 come together, we are likely to see the growth continue for biofuels. Despite regulatory challenges and high costs, biofuels are positioned to play a critical role in global decarbonization strategies, supported by investments, innovation, and policy frameworks.

MVAventures

Interested to learn more about market developments for biofuels in 2025 and beyond? Contact us!

This post is based on a publication by ResourceWise.com