Chatham House and FSC Project 70% Biofuels Surge by 2030 as Middle East Shock Drives Mandate Push
A Chatham House and Forest Stewardship Council study links a projected 70% biofuels surge by 2030 to mandate tightening across the US, EU, Brazil and Asia.
Global biofuels production is on track to grow by nearly 70% before 2030, according to a study published on Thursday (2026-09-24) by British think tank Chatham House and the Forest Stewardship Council, which attributes the forecast to a cascade of fuel-blending mandate increases across four continents triggered by Middle East energy disruption. ICE Brent crude front-month held at $107.49 a barrel on Thursday (2026-09-24), sustaining the price signal that has driven governments to lock in mandates.4
The policy response has taken different forms in different markets but follows the same direction. Each major producing economy has used the Middle East crisis to codify blending levels that were previously lower or less binding. The Chatham House study covers feedstock chains from sugarcane ethanol in Brazil and the Philippines to palm oil biodiesel in Indonesia and vegetable oil-based fuels in Europe.4
In the United States, the EPA raised biomass-based diesel volume requirements to 5.4 billion gallons for 2026 and 5.7 billion gallons for 2027, against 3.35 billion gallons in 2025. The agency estimated that meeting those targets would require roughly 6.07 billion gallons of actual production in 2026 after accounting for exports and volumes that do not generate compliance credits. The EPA also issued an emergency waiver permitting nationwide sales of E15 — gasoline blended with 15% ethanol — through the summer driving season to ease retail fuel costs.4
In Europe, the existing Renewable Energy Directive requires member states to achieve a 29% renewable energy share in transport by 2030. Leaked draft updates to a proposed successor directive, labeled RED IV in the Chatham House study, go further: the EU is reportedly proposing a 30% increase in eligible volumes for crop-based biofuels under a maintained 7% EU-wide cap. Neither the draft text nor its adoption timeline has been officially confirmed.4
Brazil has moved most aggressively on ethanol. The country's National Energy Policy Council temporarily raised the mandatory ethanol content in gasoline to 32% in July (2026-07), after lifting the blend from 27% to 30% in June 2025. Brazilian law permits the mandate to reach 35%, leaving headroom for further escalation if crude prices stay elevated.4
Asia's shift has concentrated on biodiesel and sugarcane ethanol. Indonesia raised its mandatory palm oil biodiesel blending rate to 50% from 40%, one of the highest such mandates globally. The Philippines moved to switch fully to ethanol-blended gasoline, produced from sugarcane, from April of this year. Thailand raised its biofuel mandate targets as well, oilprice.com reported on July 4 (2026-07-04).2
Asian governments have framed the pivot in energy security terms. Kpler biofuels analyst Beata Wojtkowska told oilprice.com that Asian countries look to biofuels to reduce dependence on Middle East oil imports, an approach that drives mandate escalation independent of each country's climate policy commitments.2
The co-authorship of the study invites scrutiny. The Forest Stewardship Council exists to certify sustainably managed forests, and its involvement implies the report addresses land-use pressures and deforestation risk that a 70% production surge would generate. Available excerpts do not indicate whether the study concludes the volume growth is achievable within existing agricultural land or requires converting natural habitat.4
The mandate-driven demand picture runs alongside a weakening oil consumption trend. The IEA projected in June 2026 (2026-06-08) that global oil demand would fall 2.45 million barrels per day year-on-year in the second quarter of 2026, with full-year demand expected to decline 420,000 barrels per day, about 1.3 million barrels per day below pre-conflict IEA forecasts. A sustained demand decline would reduce the price pressure that has accelerated mandate adoption, though legal mandates already enacted would persist regardless.1
Seven OPEC+ members agreed on July 5 (2026-07-05) to raise production for August, the fifth consecutive monthly increase, citing easing Middle East tensions and falling crude prices. But Brent remained above $107 per barrel on Thursday (2026-09-24), and governments that have embedded new blending levels in legislation are unlikely to reverse them quickly even if crude retreats.3
The test for European feedstock markets is whether RED IV reaches final text with both the proposed 30% volume increase and the 7% crop-based cap intact. Should the cap fall under industry lobbying pressure, demand for vegetable oils and cereals in transport applications would rise materially beyond current projections, with land-use and food-price consequences that the Forest Stewardship Council's role in the study implicitly flags.4