EIA says biofuel production will slowly grow 18% through 2050 in latest outlook

In Washington, U.S. Energy Information Administration’s (EIA) Annual Energy Outlook 2020 (AEO2020) projects that U.S. biofuel production will slowly grow through 2050, primarily driven by economic and policy factors. In the Reference case, which reflects current laws and regulations, biofuels production in 2050 is 18% higher than 2019 levels. However, in a side case with higher global crude oil prices, biofuels such as fuel ethanol and biodiesel are increasingly consumed as substitutes for petroleum products, resulting in 55% growth in biofuels production in 2050 in that case.

In 2019, U.S. biofuels consumption totaled 1.09 million barrels per day and accounted for 7.3% of total motor gasoline, distillate, and jet fuel consumption. Fuel ethanol is the largest component of U.S. biofuels. In the AEO2020 Reference case, ethanol production slowly decreases between 2019 and 2030, and then it increases toward the end of the projection period, largely mirroring the Reference case projection for motor gasoline consumption.

The projected decline in domestic ethanol-blended gasoline consumption is offset by increasing U.S. ethanol exports. From 2019 to the end of the projection period, domestic production of biodiesel and other biofuels increases by 30,000 barrels/day (b/d) and 80,000 b/d, respectively. Although not included in the AEO2020 projections, the biodiesel blender’s tax credit, renewed in December 2019, is expected to increase domestic production and net imports of biomass-based diesel.