EU analysis reveals €7.5 billion annual public support needed to expand advanced biofuels by 2030

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1. https://biofuelsdigest.com/bdigest/eu-report-says-8-86b-investment-required-for-2030-2040-targets/ – Please view link – unable to able to access data
2. https://www.brusselstimes.com/eu-affairs/1951565/eu-needs-up-to-e8-billion-a-year-to-scale-biofuels/ – A recent EU report indicates that scaling up advanced biofuels could aid in reducing transport emissions but would necessitate up to €8 billion in public support for building production plants and securing feedstock supplies. The report estimates that annual financial support of between €3.8 billion and €7.5 billion by 2030 is required to build industrial plants for biofuel production. An additional €700 million to €1.25 billion annually would be needed by 2030 in direct payments to farmers and aggregators to supply the necessary feedstock, with higher levels projected for deployment towards 2040. Existing EU funding tools could be used to encourage investment, including InvestEU, the Connecting Europe Facility, the European Regional Development Fund, and funding streams under the Common Agricultural Policy. The report also calls for administrative measures alongside funding, including closer alignment between the Common Agricultural Policy and the Renewable Energy Directive, as well as improvements to registries and sustainability certification systems.
3. https://research-and-innovation.ec.europa.eu/news/all-research-and-innovation-news/multi-fold-increase-advanced-biofuel-industrial-capacity-possible-2030-2026-02-02_en – A new EU report examines how advanced biofuels can contribute to reducing emissions in EU transport as part of the EU’s industrial competitiveness and decarbonisation policy. Advanced biofuels can be sustainably produced domestically, the report concludes, without dependencies for technologies and feedstock. EU-coordinated financial support for capacity development of essential industrial value chains would be necessary. It should cover industrial production development and feedstock supply mobilisation by farmers and feedstock aggregators. According to the report, achieving EU targets will require a portfolio of complementary solutions for 2030-2040, made up from a diverse mix of technologies. This is needed so that the full range of eligible feedstocks can be used to produce the complete spectrum of necessary fuels. Through developing business models of industrial value chains, the report estimates that financial support will be required to close the gap between the biofuels’ Levelised Cost of Production (LCoP) and the market price of their fossil fuel counterparts. By 2030, annual financial support to build industrial plants for biofuel production would need to range between €3.8 and €7.5 billion. Additional annual support of €700 million to €1.25 billion would be required as a direct disbursement to farmers and aggregators for providing the necessary feedstock. Even higher level of support would be needed for deployment towards 2040. Existing EU funding schemes and instruments at EU level, such as the InvestEU, the Connecting Europe Facility, the European Regional Development Fund, and the Common Agricultural Policy Pillar I and II instruments, can incentivise industrial capacity building and feedstock supply. Finally, the report stresses that financial measures should be complemented by administrative support. Better alignment between the Common Agricultural Policy and the Renewable Energy Directive would be needed, as well as improvements in registries and sustainability certification system.
4. https://apnews.com/article/6d1a3183a8e84c111146e9db703a13f7 – On September 12, 2023, European Union lawmakers in Strasbourg approved a major legislative deal to raise the EU’s renewable energy target to 42.5% of total consumption by 2030, with an aspirational goal of reaching 45%. This marks a significant increase from the current goal of 32%, furthering the EU’s commitment to transitioning away from fossil fuels. The bill passed with strong support: 470 in favor, 120 against, and 40 abstaining. The legislation also aims to streamline the permitting process for renewable energy projects, requiring approvals within 12 months for installations in designated “go-to areas” that protect nature, and within 24 months outside these zones. Additionally, it sets a goal to cut greenhouse gas emissions in the transport sector by 14.5% by 2030 through increased use of advanced biofuels and renewable non-biological fuels such as hydrogen. The agreement came after earlier disputes among EU countries about the role of nuclear energy in hydrogen production, ultimately allowing the inclusion of nuclear technology, supported by France. The bill requires formal approval by member states to become law.
5. https://www.biofuelsdigest.com/bdigest/eba-study-shows-european-biomethane-production-hit-7b-cum-through-q1-2025/ – In Belgium, Europe’s biomethane sector is growing, but not fast enough. Installed production capacity hit 7 billion cubic meters (bcm) annually by the end of Q1 2025, up 9% from 2024. Yet growth is beginning to slow, despite investor appetite remaining strong, even slightly higher than last year (€28 billion). This mismatch highlights the urgent need for clear policy strategy on biogases, binding targets as proposed in a recent sector’s call for a 2040 Roadmap, and swift regulatory action to accelerate the sector before momentum fades. The 2025 Biomethane Investment Outlook, released by the European Biogas Association (EBA), identifies a growing commitment from the industry, with a total of €28 billion allocated for investment in biomethane production. This marks a growth of €1 billion compared to the investments identified one year ago. The investments are projected to deliver 7.3 bcm/year of biomethane capacity to Europe by 2030, an increase of 1 bcm from last year’s outlook. The total number of biomethane plants in Europe has also increased from 1,548 to 1,678 between the 2024 and 2025 data collection, as showcased in the latest European Biomethane Map, also released today. 165 new plants began operation during this period, out of which already 56 plants are known to have started operation in the beginning of 2025. This net increase reflects steady expansion of a promising sustainable sector. France now leads biomethane production in Europe, having overtaken Germany with a 21% higher production share and a threefold advantage in number of plants. In contrast, UK and Germany have almost stagnated primarily due to regulatory uncertainty. Countries like Italy, the Netherlands, Denmark, and Sweden, while significant contributors, have recorded slower year-on-year growth compared to the other top producers.
6. https://www.oecd.org/en/publications/2025/07/oecd-fao-agricultural-outlook-2025-2034_3eb15914/full-report/biofuels_6d29857a.html – In most high-income countries, biofuel growth is projected to slow due to stagnating fuel demand resulting from electric vehicle adoption and weaker policy support. In the United States the focus is expected to shift towards biomass-based diesel due to road and aviation fuel targets, with a projected 1% annual increase. Under Canada’s Clean Fuel Regulations, however, biofuels use is projected to increase by 6% per year while in the European Union biofuel use is expected to decrease under Renewable Energy Directive (RED III). Middle-income countries are expected to offset the slowdown of demand growth projected in high-income countries. Biofuel consumption is projected to grow by 1.7% annually, driven by increasing transport fuel demand, domestic energy security, fiscal goals, and emissions reduction commitments, with Brazil, Indonesia, and India leading this growth. Most biofuel markets are anticipated to be largely self-sufficient. Countries with strong domestic production capacity, such as India, Indonesia and Brazil, will likely meet their own rising demand, limiting the expansion of global biofuel trade. The global share of biofuel production that is traded is expected to remain at 15% for biomass-based diesel and 8% for ethanol. First-generation biofuels will continue to dominate the market, with ethanol largely produced from maize and sugar and biomass-based diesel primarily from vegetable oils such as soybean, rapeseed, and palm oil. The future of biofuel markets expansion depends on complex policies, with increasing interest in advanced biofuels and sustainable aviation fuel. However, expanding production capacities remains challenging due to high investment costs. Sustainable feedstock supply will be critical as biofuels integrate into circular economy models in agriculture. Biofuel prices eased in 2024 due to lower oil prices and ample feedstock supply. Real prices are projected to decline, but government support will remain necessary to offset higher production costs of biofuels compared to fossil fuels.