IEA warns against cutting biofuel mandates due to Ukraine war
The International Energy Agency (IEA) has highlighted that any reduction in biofuels mandates could increase oil demand and lead to supply concerns.
According to the IEA, biofuels makes up about 2% of the global oil demand.
Since the war in Ukraine started and as oil and energy prices spiked, some European countries have begun considering adjusting their biofuel-blending mandates.
This is also due to sharp increases in biofuels prices following big increases in feedstock, food and fertiliser prices brought on by the war between Russia and Ukraine.
For example, Sweden has also proposed to freeze its mandate for 2023 at 2022 levels and Croatia has withdrawn penalties given to blenders that miss mandate targets.
Additionally Finland said it will reduce its biofuel mandate, calculated as the percentage of road fuel by energy content coming from renewable sources, for this year and 2023 by 7.5 percentage points to 12% and 13.5% respectively.
Some lobby groups have also suggested that diverting crops destined to be made into biofuels should be moved into food production instead. This would bring food prices down and help prevent a major global food shock.
Globally, 10% of all grain is turned into biofuel.In the US, a third of the maize grown is converted into ethanol and blended into petrol. Around 90 million tonnes is used for ethanol, nearly double the 50 million tonnes exported by Ukraine and Russia.
In the European Union, 12 million tonnes of grain, including wheat and maize, is turned into ethanol - around 7% of the bloc’s production.
According to the IEA, biofuels makes up about 2% of the global oil demand.
Since the war in Ukraine started and as oil and energy prices spiked, some European countries have begun considering adjusting their biofuel-blending mandates.
This is also due to sharp increases in biofuels prices following big increases in feedstock, food and fertiliser prices brought on by the war between Russia and Ukraine.
For example, Sweden has also proposed to freeze its mandate for 2023 at 2022 levels and Croatia has withdrawn penalties given to blenders that miss mandate targets.
Additionally Finland said it will reduce its biofuel mandate, calculated as the percentage of road fuel by energy content coming from renewable sources, for this year and 2023 by 7.5 percentage points to 12% and 13.5% respectively.
Some lobby groups have also suggested that diverting crops destined to be made into biofuels should be moved into food production instead. This would bring food prices down and help prevent a major global food shock.
Globally, 10% of all grain is turned into biofuel.In the US, a third of the maize grown is converted into ethanol and blended into petrol. Around 90 million tonnes is used for ethanol, nearly double the 50 million tonnes exported by Ukraine and Russia.
In the European Union, 12 million tonnes of grain, including wheat and maize, is turned into ethanol - around 7% of the bloc’s production.
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