The largest producers – Indonesia, Malaysia, Thailand, Thailand, Vietnam and Brazil – are the quickest to respond. They are simplifying regulation and increasing allowable blending rates. For example, Brazil plans to increase the ethanol content in gasoline from 30% to 32%, Indonesia is accelerating the transition to the B50 standard, and Malaysia – to 20% biocomponents in diesel, Bloomberg writes.
Biofuels are made from agricultural raw materials – corn, sugar cane, soybeans and palm oil. Its main advantage is its simplicity: such blends can be used in existing engines and at existing gas stations without large-scale reconstruction of the infrastructure.
Demand for biofuels has been growing since the early 2000s against the backdrop of climate policy. Today, up to 6-8% of the world’s arable land is already used for biofuels, compared to about 1% twenty years ago. In the US, the growth is supported by government quotas: the country produces about half of the world’s ethanol.
But rapid growth is exacerbating old problems. Expanding crops for fuel reduces the area for food, pushing prices up. In vulnerable countries, this increases the risk of food shortages, especially in the face of climate disruption.
Environmental claims are also intensifying. In Brazil, biofuels have been linked to deforestation of the Amazon for new plantations. The European Union has already recognized palm oil biodiesel as a risk factor for forests and intends to phase it out by 2030. Additional pressure is being placed on water and soils due to intensive agriculture.
However, biofuels do not solve the problem completely. It is less energy-intensive than petroleum, and its share in fuel is limited by technical and environmental regulations.
As the source notes, biofuels are becoming a quick crisis management tool for the energy sector, but are increasing pressure on food markets and the environment.
