The maritime industry faces a critical biofuel shortage by 2028

Global biodiesel and bio-LNG supply struggles to keep pace with rising maritime demand, posing an immediate risk to the sector’s emissions reduction targets.

Share:

Global demand for biofuels in maritime transport is expected to significantly exceed production capacity by 2028, according to an analysis by Rystad Energy published on 27 May. Although biodiesel and bio-liquefied natural gas (bio-LNG) are compatible with existing ship engines, their actual availability remains highly limited.

Widening gap between demand and production

Without supply constraints, maritime demand for biodiesel could exceed 140 million tonnes of fuel oil equivalent by 2028. However, even in an optimal scenario, total biofuel production capacity would reach a maximum of 120 million tonnes. When applying sustainability criteria that prioritise second-generation biofuels, supply drops to around 40 million tonnes.

Rystad Energy analysts estimate that actual availability is even lower when accounting for production risks, cross-sector competition, and operational losses. Bio-LNG, while considered more cost-effective than biodiesel in some subsidised markets, also faces constraints. Over 84% of global biomethane output is allocated to power generation, with 10% used in road transport. This leaves just 6% available for all other sectors, including maritime.

Regulatory obligations and commercial trade-offs

The International Maritime Organization (IMO) is enforcing increasingly stringent carbon intensity thresholds through its Greenhouse Gas Fuel Intensity (GFI) standard. In this context, biofuels are emerging as a more accessible transitional solution than alternative fuels like ammonia or methanol, which require high infrastructure investment.

According to Junlin Yu, Senior Analyst at Rystad Energy, maritime players must prepare for these constraints: “The sector cannot ignore this supply crisis.” Biofuels, when meeting lifecycle emission thresholds, can provide financial benefits through IMO incentives.

Limited strategic response capacity

Priority access to available volumes is becoming a competitive issue. As 2028 approaches, the ability to secure a reliable supply chain for biodiesel and bio-LNG could determine shipowners’ ability to remain compliant.

The Rystad Talks Energy: Full Steam Ahead conference, scheduled for 28 May, will bring together executives from Rystad Energy and DNV Maritime to address these structural challenges. The event comes as the maritime sector accelerates its energy transition under growing regulatory pressure.

Seventeen UK companies secure £63mn ($81.5mn) to develop sustainable aviation fuels, supporting nearly 1,400 jobs and boosting the national sector.
SUEZ and RATP Group formalise a supply contract for 100 GWh of renewable electricity per year, over a maximum period of sixteen years, powering the operations of the world’s third largest urban transport operator.
Valmet has secured a contract to supply a biomass boiler and flue gas cleaning system to Saica Group for its production site in El Burgo de Ebro, Spain, as part of its decarbonisation plan.
Qarlbo Biodiversity signed a memorandum of understanding with Woodland Biofuels for the delivery of thinned pine wood from managed forests in the United States to supply the Canadian company’s biomass operations.
The Canadian group Thermal Energy International has secured a CAD 1.4 million contract to install a heat recovery unit at a European malted barley producer, aiming to reduce energy costs and polluting emissions.
The asset takeover process of Global Bioenergies, under a pre-pack disposal procedure, has been extended until 18 July at noon, following requests from potential bidders seeking additional time to assess the French company's financial situation.
SIAAP and SUEZ have inaugurated a new biogas production unit at the Seine Aval wastewater treatment plant, the largest in Europe, as part of a modernization project to strengthen the energy sovereignty of the Paris region.
Canadian company Hydron Energy will supply its innovative INTRUPTor-Mid technology to produce renewable natural gas in Ontario, marking its first commercial order in the biomethane sector with a promise of significant cost reductions.
US President Donald Trump has ratified a law extending until the end of 2029 the tax credit on renewable natural gas production from biomass and animal manure, aiming to boost the rural economy.
Valmet secures a contract to deliver a bubbling fluidized bed biomass boiler and flue gas handling equipment to Kraftringen Energi's upcoming combined heat and power plant, aimed at strengthening energy supply in Sweden.
Elcimaï Environnement has completed a methanisation unit integrated into Laon's wastewater treatment plant, now enabling the conversion of sludge and bio-waste into biomethane injected into the local grid, meeting the annual energy needs of 1,150 households.
Singapore announces fixed airline ticket levy dedicated to Sustainable Aviation Fuel (SAF) procurement, maintaining unchanged amounts from 2026 to 2028, regardless of significant fluctuations in global fuel prices.
Curve Energy Corp. has formalized a non-disclosure agreement with Saudi Aramco Technologies, allowing confidential exchanges of information as part of potential technological collaborations in the global market for low-sulfur marine fuels.
Infrastructure manager Teréga and GRDF inaugurated in Auch, Occitanie, the region’s first biomethane reverse-flow station, designed to facilitate biomethane transfer from the distribution to the transport network, representing an investment of €3mn ($3.27mn).
Eni has inaugurated its first vegetable oil extraction plant in Loudima, Republic of the Congo, marking the country's entry into the global biofuel supply chain for the transport industry.
The city of Toul has officially inaugurated a biomass heating plant operated by ENGIE Solutions, intended to supply heating from wood-energy to over 2,400 local homes starting from the next winter season.
North American biomethane capacity will increase by 70 million cubic feet per day in 2025 following a record growth of 139 mmcfd in 2024, driven notably by transportation sector demand, according to Wood Mackenzie.
The voluntary carbon market intensifies industrial interest in carbon capture within the pulp and paper and bioenergy sectors, creating an estimated $3 billion opportunity through carbon credit trading.
Germany’s announcement to eliminate double counting is shaking up manure-based biomethane and GHG certificate markets, prompting buyers to anticipate significant price hikes.
The French government formalizes its industrial strategy to develop a competitive national sector for sustainable aviation fuels, aiming to meet domestic demand and strengthen France's export position by 2030.