IEA Predicts Quadrupling of Sustainable Fuel Use by 2035

The International Energy Agency (IEA) forecasts that global use of sustainable fuels could quadruple by 2035, driven by the implementation of current and announced policies alongside targeted investment incentives. Released ahead of Brazil’s COP30 presidency, the IEA report titled Delivering Sustainable Fuels: Pathways to 2035 reinforces the role of sustainable fuels in reducing fossil fuel dependence, especially in transport and heavy industry sectors.

Key fuel types and current contribution

Sustainable fuels, including biofuels, biogases, low-emissions hydrogen, and hydrogen-based synthetic fuels, are increasingly recognised as critical complements to electrification. These fuels are already reducing oil demand by 2.5 million barrels per day, with countries like Brazil deriving nearly 10% of total energy consumption from renewable fuels.
Currently:

• Liquid biofuels dominate, covering about 4% of transport energy demand globally.
• Biogases and hydrogen fuels are in early adoption phases.
• GHG performance standards cover nearly 80% of liquid biofuel use, but adoption is uneven globally.

Economic and environmental benefits

The IEA highlights several strategic advantages of scaling sustainable fuels:

• Energy security through reduced import dependency.
• Rural job creation and industrial growth, especially in emerging economies.
• GHG emissions mitigation, vital for achieving global climate goals.

Wider deployment could:

• Generate up to USD 1.5 trillion in investments.
• Create nearly 2 million jobs globally by 2035.
• Stimulate rural economies and diversify income streams.

Cost-wise, sustainable fuels are still more expensive than fossil fuels. However, the report finds that innovation, scale-up, and reduced financing costs could narrow this gap. In some markets, such as ethanol in Brazil and the US, these fuels are already cost-competitive.

Sectoral outlook to 2035

If projected policies are enforced, the IEA anticipates:

• 10% of global road transport, 15% of aviation, and 35% of shipping fuel demand could be met by sustainable fuels by 2035.
• Post-2030, industry and power generation will significantly increase their reliance, particularly on low-emissions hydrogen for chemicals, steel, and refining sectors.

The IEA identifies six priority actions:

• Create regional policy roadmaps aligned with broader energy strategies.
• Improve demand predictability to drive investment.
• Establish transparent carbon accounting for credible GHG reductions.
• Support technological innovation for cost efficiency.
• Develop infrastructure and supply chains.
• Enhance financing channels, especially for developing nations.

Global coordination needed

The IEA stresses the need for international cooperation to bridge regional capabilities with global demand. Agencies such as the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO) are already working towards broader uptake of sustainable fuels in their respective sectors.