What’s in store for the year ahead?

Cornelius Claeys, founder and managing director, CleanMotion Advisory, takes a closer look at the biofuels industry for the coming year.
Crystal balls crack easily in today’s world - marked by shifting geopolitical norms, ever evolving national legislation and rapid technological transformation.
Biofuel market dynamics are closely linked to developments in the energy, transport and agriculture industries. They also rely on policies more than almost any other commodity.
Despite these complex interplays, growth will likely be a common theme in 2026 across biofuel types, transport segments and regions.

Impacting markets

While only Finland and a handful of other small countries met the 2025 compliance deadline for RED III, implementation is now in its final stages for the impactful German and Dutch markets, and other large countries like Spain have taken important steps too.
So far, many countries go above and beyond the EU minimum targets, while increasingly focusing on emissions, abolishing double counting and embedding solid supply chain certification requirements.
Ambitious sub-obligations are included for shipping, advanced feedstocks and RFNBOs, while caps on certain feedstocks are also common. Although increasing complexity, these combined dynamics will likely lock in rapid growth for European biofuel demand in 2026 and beyond.
Another key topic to monitor in the first months of the year is US RVO finalisation. The Trump administration proposed surprisingly high targets - especially for biomass-based diesel RINs - while only letting imported biofuels and feedstocks qualify for 50% of the RIN credits.
Given the lack of domestic feedstocks, ironically this could mean that more imported biofuels are actually needed to reach the targets.
Since imported volumes also do not qualify for 45Z production tax credits, however, it remains to be seen whether the price spread between US and non-US feedstock can really rise to a level that would justify this without causing a major spike in RIN prices.

Greater volumes

Emerging markets like Brazil, Indonesia and India will continue to make up some of the highest volume biofuel markets globally, aided by continuously increasing road mandates and solid overall road fuel demand growth.
In the near term, the vast majority of demand in these countries will likely remain on some of the lower-value biofuels, meaning crop-based ethanol and biodiesel rather than higher value waste based HVO and SAF.
Waste feedstocks from these countries may continue to target the EU market instead.
Trade policy will continue to be an important shaper for the  biofuel industry. Following decades of trade liberalisation, a more protectionist US has caused this trend to reverse recently for many products.
Ethanol tends to be an exception, with ethanol tariffs being slashed in many recently concluded trade deals (for example, US-UK, EU-Mercosur).
Suspecting dumping from China in particular, EU and UK trade bodies have substantially raised biomass-based diesel tariffs. This year will likely show whether SAF follows suit, or if it becomes a loophole for former HVO producers to shift output towards SAF instead.

Taking flight

SAF mandates kicked off in 2025 in the EU and UK. From 2026, Singapore and British Columbia follow suit with the first active SAF mandates outside of Europe, while in 2027 Brazil and South Korea are meant to be next.
Policymakers in several other countries have made SAF pledges as well, but Japan’s 2030 mandate is the only other significant one that can be considered confirmed.
A core topic to monitor in 2026, will, therefore, be to what extent other countries follow through on their pledges by confirming concrete SAF blending obligations in for example, Indonesia, Malaysia, Turkey, the UAE, Hong Kong and Taiwan.
Potentially most impactful of all on this front, is whether China’s next five-year plan (expected in March) will include SAF incentives.
Given the EU’s flat SAF mandates until 2029 and a strong buildup in global SAF production capacity, strengthening demand incentives will be needed to avoid oversupply.

Maritime scene

Last but not least, the role of biofuels in shipping will become clearer this year.
The IMO failed to reach agreement on this front in 2025, with the decision postponed to October instead.
If indeed its Net Zero Framework (NFZ) is approved, this would make biomarine fuels competitive all over the world.
Should it fail to do so, Europe remains the key driver for this segment, with 2026 being the first year where the sector is fully included in the ETS, while EU shipowners are also obliged to reduce emission under RefuelEU and national mandates.
Even without mandates, Singapore has become an important biomarine hub as well and local port authorities around the world are doing their part in incentivising uptake.

For more information: Visit cleanmotionadvisory.com