World Energy Outlook 2006

(containing up to 5% water) and some types of biodiesel can be used
unblended or in high-proportion blends only with modifications to the vehicle
engine. Almost all biofuels are used in cars and trucks, though small quantities
of ethanol are used for aviation purposes.
Global production of biofuels amounted to 20 Mtoe, or 643 thousand barrels
per day (kb/d) 3 in 2005 – equal to about 1% of total road-transport fuel
consumption in energy terms. Brazil and the United States together account
for almost 80% of global supply (Table 14.1). The United States is thought to
have overtaken Brazil in 2006 as the world’s largest producer of biofuels. In
both countries, ethanol accounts for almost all biofuels output. US output of
ethanol, derived mainly from corn (maize), has surged in recent years as a result
of tax incentives and rising demand for ethanol as a gasoline-blending
component. In Brazil, production of ethanol, entirely based on sugar cane,
peaked in the 1980s, but declined as international oil prices fell back. 4 Falling
production costs, higher oil prices and the introduction of vehicles that allow
switching between ethanol and conventional gasoline have led to a renewed
surge in output. Production of biofuels in Europe is growing rapidly thanks to
strong government incentives. The bulk of EU production is biodiesel, which,
in turn, accounts for 87% of world biodiesel output. Elsewhere, China and
India are the largest producers of biofuels, mostly in the form of ethanol. Only
in Brazil, Cuba and Sweden did the share of biofuels in total transport-fuel
demand exceed 2% in 2004 (Figure 14.1). This share is nonetheless growing
rapidly in several countries as new capacity comes on stream.
Table 14.1: Biofuels Production by Country, 2005
Ethanol Biodiesel Total
Mtoe kb/d Mtoe kb/d Mtoe kb/d
United States 7.50 254 0.22 5 7.72 259
Canada 0.12 4 0.00 0 0.12 4
European Union 0.48 16 2.53 56 3.01 72
Brazil 8.17 277 0.05 1 8.22 278
China 0.51 17 negligible 0.51 17
India 0.15 5 negligible 0.15 5
World 17.07 579 2.91 64 19.98 643
Source: IEA analysis based on F.O.Licht (2006).
3. Unless otherwise stated, volume equivalents are not adjusted to take account of differences in
energy content, because the latter differ by type of fuel and because other characteristics affect fuel
economy in practice.
4. See Chapter 16 for a detailed discussion of energy prospects generally in Brazil.
Chapter 14 - The Outlook for Biofuels
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