Biofuel Boom Sparks Concerns Over Food Prices and Deforestation

Global biofuel production is set to surge by 68% between 2025 and 2030 in response to the oil supply shock caused by the conflict between the United States and Iran. This increase could mobilize an additional 36 million hectares of agricultural land, raising concerns over food prices and deforestation.

The report estimates that 32 million hectares were already being used to produce biofuel feedstocks in 2023, with expanded mandates potentially increasing this total to around 68 million hectares by 2030. The authors clarify that the additional 36 million hectares represent potential pressure on agricultural land, rather than a forecast of equivalent deforestation.

The increased demand for biofuels is already evident, with approximately 40% of U.S. corn demand coming from ethanol production and India allocating an additional 5.2 million tons of rice to this fuel. The report recommends reserving biofuels for sectors that are difficult to electrify and prioritizing waste, residues, and advanced fuels over food crops.

It also calls for strengthening land use limits, supply chain traceability, and protections against deforestation. This acceleration is a response to the oil supply shock caused by the conflict between the United States and Iran, along with disruptions in the Strait of Hormuz. Crude oil prices have risen by nearly 40%, while sugar and corn have increased by about 20% since the onset of the conflict.