Global Cereal Demand for Biofuels to Reach 27% by 2034

By 2034, 27% of global cereal production will be used for biofuels, driven by rising demand in emerging economies like India, Brazil, and Indonesia, according to the OECD-FAO Agricultural Outlook 2025-2034. This shift intensifies competition between food, feed, and fuel sectors. This article examines the implications, benefits, and challenges of this trend for global agriculture and sustainability.

The OECD-FAO report projects global cereal production to grow at 1.1% annually, reaching 3.2 billion tonnes by 2034, driven by yield improvements (0.9% annually) rather than land expansion (0.14% annually). Of this, 40% will be consumed directly by humans, 33% for animal feed, and 27% for biofuels and industrial uses, up from 23% in 2023. India, a key driver, aims to expand ethanol production to 15 billion liters by 2030, using maize and sugarcane, supported by policies like the Ethanol Blended Petrol (EBP) program targeting 20% blending.

Economically, biofuel demand boosts agricultural markets, creating $50 billion in revenue for farmers in emerging economies by 2030. In India, ethanol production supports 2 million rural jobs, particularly in Maharashtra and Uttar Pradesh. However, diverting cereals from food to fuel raises prices by 10–15%, impacting low-income households. Critics argue that prioritizing biofuels over food security exacerbates hunger, with 700 million people undernourished globally.

Environmentally, biofuels reduce fossil fuel emissions by 30%, cutting 500 million tonnes of CO2 annually by 2034. India’s ethanol blending has saved 10 million tonnes of CO2 since 2020. However, agricultural expansion for biofuels increases greenhouse gas emissions by 6%, driven by land use changes and fertilizer use. Deforestation risks in Brazil and Indonesia threaten biodiversity, with 1 million hectares potentially lost by 2030.

Challenges include food security and environmental trade-offs. In India, 20% of maize production is diverted to ethanol, reducing food availability. Precision farming and improved irrigation could boost yields by 15%, mitigating shortages, but require $10 billion in investments. Policy inconsistencies, such as India’s fluctuating ethanol pricing, deter farmers. Critics highlight that biofuel subsidies distort markets, favoring large agribusinesses over small farmers.

Community engagement is critical. In India, cooperatives train farmers in sustainable practices, while campaigns promote biofuel benefits. Critics note that rural communities often lack access to credit for adopting new technologies, requiring government intervention. Public skepticism about food price hikes necessitates transparent communication.

Globally, the trend aligns with Brazil’s sugarcane ethanol success and the EU’s biodiesel push. International collaboration through the FAO could standardize sustainable practices, but critics warn that global trade, with 22% of calories crossing borders by 2034, risks supply chain disruptions without multilateral agreements.

Long-term success depends on innovation and policy coherence. Digital platforms tracking crop allocation and emissions could enhance efficiency. India’s investment in second-generation biofuels, using crop residues, could reduce food-fuel conflicts. Scaling emission-reduction technologies, like carbon capture, is essential to balance biofuel growth with climate goals.

Conclusion

The projected 27% cereal use for biofuels by 2034 offers economic and environmental benefits but risks food security and emissions. India’s role as a key driver requires balancing agricultural priorities, innovation, and community support to ensure sustainable outcomes.

Source : Outlook Business