Most biofuels consumed globally come from food crops such as corn, palm oil, rapeseed, and sugar. These food-based biofuels boomed after the Kyoto Protocol, alongside a push in Europe and the US to expand their use in transportation. But their growth has stalled over the past 15 years, mainly because of high costs and growing questions over their climate impact, and amid a boom in EVs and renewable energy.

At last year’s COP30 climate summit, major producers sought to reignite the sector, announcing the Belém 4x Pledge to increase bioenergy and biofuel use fourfold over the next decade. About two dozen countries joined the initiative, while other nations are expanding biofuel production: Indonesia is planning to build a 560,000-hectare bioethanol estate in a forested region of Papua, while Malaysia is considering increasing its domestic fuel mandate to mix 30% of palm-oil-based biofuels with gasoline. California, too, is converting oil refineries to process imported biofuels as part of its Low Carbon Fuel Standard.

Biofuels are also increasingly being used to power heavy transport, including aviation, which consumes about 8% of oil globally and where electrification remains a distant dream, while a push is underway to expand biofuel usage in shipping, responsible for about 7% of global oil consumption.

This is where Big Oil is investing heavily. Companies such as BP, Chevron, ExxonMobil, Shell, TotalEnergies, and ENI, are leading this push, cumulatively investing in 43 biofuels production and processing plants aimed to be operational by 2030. The vast majority are not for biodiesel or ethanol — the fuel mixed with petroleum for use in cars in parts of the United States, Europe, and Southeast Asia. Instead they are “low-carbon drop-in fuels that can be swiftly integrated into existing aviation, heavy transport, and marine fuel systems,” said Lars Klesse, bioenergy research analyst at Rystad Energy.

For countries like Brazil, Indonesia, and Malaysia, energy security concerns sparked by the Iran war are also playing a major role. A key tenet of biofuel expansion in these countries is to replace costly imported petroleum or natural gas. “Recent developments in oil markets are incentivizing countries to accelerate the transition away from fossil fuels,” said Gerard Ostheimer, the head of the secretariat at the Biofuture Industry Council.