Sustainable fuel use could quadruple by 2035

Why is it in the News?

• The International Energy Agency (IEA) released the report Delivering Sustainable Fuels: Pathways to 2035, projecting that global sustainable fuel use could quadruple by 2035.
• The report was released ahead of COP30 under Brazil’s UNFCCC presidency, highlighting sustainable fuels’ role in climate mitigation, energy security, and economic development.
• Focus is on biofuels, biogases, and low-emissions hydrogen as complements to electrification in transport, industry, and power generation.

Relevance

• GS-3: Energy & Environment
  • Renewable energy transition, biofuels, hydrogen economy, energy security.
  • Industrial and transport sector decarbonisation, sustainable development.
• GS-2: International Relations
  • Multilateral cooperation (IEA, ICAO, IMO) for global climate action.

Sustainable Fuels and Global Energy Transition

Definition and Types

• Sustainable fuels: Liquid or gaseous fuels with lower carbon intensity than fossil fuels.
  • Key categories:
    • Biofuels: Ethanol, biodiesel from crops or waste.
    • Biogases: Methane produced from organic matter.
    • Low-emissions hydrogen: Hydrogen produced with minimal greenhouse gas emissions.

Current Global Impact

• Already reduce global oil demand by ~2.5 million barrels per day (2024).
  • Reduce transport fuel import dependence by 5–15 percentage points in importing countries.
  • Liquid biofuels dominate (~4% of global transport energy).

Drivers of Sustainable Fuel Adoption

• Energy security: Reduced dependence on fossil fuel imports.
  • Economic benefits: Rural employment, new income streams, industrial growth.
  • Environmental sustainability: Lower carbon emissions, compliance with GHG performance standards (~80% of biofuel use).

Overview

Projected Growth to 2035

• Fourfold increase in sustainable fuel use if current policies are implemented.
• Sectoral projections:
  • Road transport: 10% of demand.
  • Aviation: 15% of fuel demand.
  • Shipping: 35% of fuel demand.
• Industry and power generation uptake expected post-2030, especially low-emissions hydrogen in chemical, steel, and refining sectors.

Economic and Investment Implications

• USD 1.5 trillion cumulative investments by 2035.
• Creation of ~2 million direct jobs globally.
• Sustainable fuels can be competitive in some markets (ethanol in Brazil, US) and may slightly increase consumer costs (e.g., 15% aviation fuel blend → 5–7% ticket rise).

Technological Innovation

• Emerging fuel pathways:
  • Alcohol-to-jet fuels
  • Hydrogen-based synthetic fuels
• Innovation and scale-up expected to reduce costs, making them more competitive with fossil fuels.

Policy and Regulatory Actions

• IEA identifies six priority actions:
  • Region-specific roadmaps aligned with broader energy goals.
  • Predictable demand to attract private investment.
  • Transparent carbon accounting and performance-based incentives.
  • Innovation support to lower costs.
  • Integrated supply chains and infrastructure development.
  • Expanded access to finance, especially in emerging economies.

Global Cooperation

• International collaboration crucial for matching regional strengths with global demand.
• ICAO and IMO working to promote aviation and maritime sustainable fuel uptake.
• Aligns with global decarbonisation goals and supports COP30 discussions on climate action.

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