Global biofuel production is projected to rise 68-70% by 2030 compared to 2025 levels, according to research published by Chatham House and the Forest Stewardship Council. The acceleration follows expanded blending mandates implemented by Brazil, China, India, Indonesia, the United States and the European Union since the Iran conflict began in February. The policy responses prioritize short-term energy security but may require an additional 36 million hectares of agricultural land worldwide by 2030, equivalent to Germany’s total area, potentially more than doubling the land footprint dedicated to biofuel feedstock production since 2023.
Brazil expects to receive approximately R$110 billion in biofuel investments between 2026 and 2035, with ethanol production projected to reach 51 billion litres annually by 2035. Corn-based ethanol, primarily produced in the Center-West region, represented 20% of national ethanol output in 2024 and is forecast to exceed 30% by 2035. The expansion creates co-products including DDG protein for animal feed, integrating fuel production with livestock supply chains.
Researchers cautioned that first-generation biofuels derived from food crops like corn and sugarcane typically generate negative net impacts on land degradation, food security and water use. The rapid escalation of blending targets creates implementation risks, as feedstock demand may outpace regulatory safeguards, certification systems and land-use planning mechanisms. Crude oil prices have risen 40% since the conflict’s onset, while sugar and corn prices increased approximately 20%, creating competitive pressures between energy and food markets. Recent rainfall disruptions in São Paulo state further constrained immediate ethanol availability, with hydrous ethanol prices climbing 7.27% and anhydrous ethanol advancing 2.29% in mid-September.
This article was curated and published as part of our South American energy market coverage.
