Food crops to remain backbone of global biofuel production through 2035, OECD-FAO report finds

First-generation biofuels — ethanol made mainly from sugar, maize, rice and other cereals, and biodiesel from vegetable oils such as soybean, rapeseed and palm oil — will continue to dominate global biofuel markets over the next decade, according to the OECD-FAO Agricultural Outlook 2026-2035. 

This holds true despite increasing scrutiny of biofuel sustainability in many countries. The report noted that notwithstanding significant variations in feedstock composition across regions, conventional, food-related feedstocks are expected to remain predominant in the industry. 

Second generation biofuels, those made form cellulosic feedstocks, such as crop residues, dedicated energy crops or woody biomass, which offer a way to produce biofuel without competing with food sources, are not expected to see any substantial increase in their share of total production, the report said.

The report, jointly produced by OECD and the United Nations Food and Agriculture Organization (FAO), assesses ten-year prospects for agricultural commodities and aquatic food markets at global, regional and national levels.

The findings come at a time when there are persisting tensions between food, feed and fuel demand on global cropland. With maize, sugar cane and vegetable oils continuing to anchor biofuel production, and the retreat of waste-oil-based diesel removing one of the few feedstocks that does not draw on farmland, the report suggested limited relief from the competition between fuel and food uses of key crops. 

By 2035, food is projected to account for 40 per cent of global cereal use and feed 34 per cent, with biofuels and other industrial uses making up roughly a quarter, leaving little sign of the diversification toward non-food feedstocks that could ease pressure on land and crop prices. 

This comes even as cropping patterns shift to accommodate rising demand: Global maize area is expected to expand by about 4 per cent, growth that will need to satisfy food, feed and fuel demand simultaneously. Global ethanol production overall is projected to reach 162.5 billion litres by 2035, with maize supplying 61 per cent of total feedstock, sugarcane 22 per cent, molasses 5 per cent and wheat 2 per cent. 

In India, the government’s own Economic Survey 2025-26 has flagged this tension, noting that the country’s ethanol blending programme is reshaping crop priorities as farmers increasingly favour maize over pulses and oilseeds, and warning that this risks entrenching import dependence on edible oils and exposing domestic food prices to greater volatility. 

Globally, the OECD-FAO report projected a slower pace of change over the next decade than the last one. Global biofuel consumption and production are each expected to grow at 1.4 per cent annually through 2035, three-fifths the pace recorded in the previous ten years, largely due to declining fuel use in high-income countries. 

But the geography of that growth is shifting sharply: Emerging economies, led by India, Brazil and Indonesia, are expected to account for 80 per cent of the increase in global biofuel demand, even as high-income countries’ share of that growth falls from 40 per cent in the past decade to just 10 per cent going forward.

Globally, high-income countries accounted for 51 per cent of global ethanol supply and demand in 2025, a share the report projects will fall to 43 per cent by 2035 as middle-income countries gain prominence. 

A different pattern holds for biomass-based diesel, where consumption is led by the United States and Indonesia rather than by a broader emerging-market shift. Global output is projected to rise to 99 billion litres by 2035, with vegetable oils making up 69 per cent of feedstock and used cooking oils and tallow — despite their declining share — still accounting for 23 per cent.