Why Biofuels Aren’t Very Popular

Biofuels remain a minority player because they’re costly to scale, constrained by vehicle and fuel infrastructure, dogged by sustainability and land-use concerns, and face policy uncertainty and stiff competition from electrification. In practice, most markets cap blends at low percentages, supplies of truly low-carbon feedstocks are limited, and public perception is mixed—keeping adoption slower than early promises suggested.

What Counts as a Biofuel—and How Big Is the Market?

“Biofuels” generally include ethanol (mixed with gasoline), fatty-acid methyl ester biodiesel, renewable diesel (hydrotreated vegetable oil, or HVO), and sustainable aviation fuel (SAF). Ethanol typically appears as E10 (10% ethanol) in gasoline in the United States and parts of Europe; higher blends like E15 and E85 exist but are niche. Diesel blends range from B5–B20 for biodiesel, while renewable diesel is a “drop-in” fuel compatible with existing engines. Globally, biofuels supply only a small single-digit share of transport energy. While renewable diesel and SAF are growing fast, they still represent a small portion of overall fuel demand.

The Core Barriers at a Glance

The following points summarize why biofuels have not achieved mainstream popularity across markets and vehicle types.

• Cost: Many biofuels remain more expensive to produce and distribute than fossil fuels, especially when oil prices are low.
• Infrastructure and vehicle limits: Blend walls, engine warranties, cold-weather performance, and ethanol’s incompatibility with pipelines curb uptake.
• Sustainability disputes: Land-use change, fertilizer emissions, and deforestation risks undermine climate and biodiversity benefits for crop-based fuels.
• Policy uncertainty: Shifting mandates, sustainability caps, and credit-price volatility discourage long-term investment.
• Feedstock scarcity: Truly low-carbon waste oils, residues, and cellulosic material are limited and contested.
• Competition from EVs: Rapid electrification siphons policy focus, investment, and automaker interest away from liquid biofuels for light-duty transport.

Taken together, these barriers suppress demand growth and keep biofuels concentrated in specific niches rather than across the broader transport sector.

Economics: Cost and Volatility

On average, biofuels cost more to make and move than fossil fuels, especially when crude prices are modest. Capital costs for advanced biofuel plants are high, feedstock prices (such as vegetable oils) are volatile, and ethanol’s rail/truck logistics add expense because it generally can’t use petroleum pipelines.

Below are the main cost drivers that limit competitiveness.

• Feedstock price swings: Soy, canola, tallow, and used cooking oil have tight markets; renewable diesel growth has bid up prices.
• Capital intensity: Cellulosic and SAF plants need complex pretreatment, upgrading, and hydrogen systems.
• Scale efficiency: Many advanced facilities have struggled to reach nameplate throughput or consistent yields.
• Distribution costs: Ethanol’s water affinity and corrosivity require separate handling, raising logistics costs.

While tax credits (such as U.S. IRA credits for SAF and low-carbon fuels) help, sustained cost parity with fossil fuels is rare without strong carbon pricing or blending mandates.

Vehicles and Infrastructure Limits

Biofuels often collide with “blend walls” and compatibility issues. Ethanol has about one-third less energy per liter than gasoline, reducing mileage at higher blends, and OEM warranties can limit allowable percentages. Biodiesel can gel in cold climates, while ethanol’s properties complicate pipeline transport.

Key technical and infrastructure factors include:

• Blend limits: Many regions standardize at E10 for gasoline; E15 and E85 remain limited by retail availability and vehicle compatibility.
• Energy density: Ethanol’s lower energy content cuts range and can negate pump-price savings for high blends like E85.
• Cold flow and storage: Biodiesel can have cold-weather operability issues; microbial growth in wet tanks can increase maintenance.
• Pipelines: Ethanol typically can’t use petroleum pipelines due to water uptake and material compatibility, necessitating rail or truck.
• Warranty constraints: Some automakers restrict higher blends, limiting consumer confidence and fleet adoption.

Drop-in options like renewable diesel and some SAF pathways sidestep many compatibility issues, but their current supply is limited and prices are higher than conventional fuels.

Sustainability and Land-Use Debates

Public support hinges on credible emissions reductions. Yet crop-based fuels can have uncertain climate benefits once indirect land-use change (ILUC), fertilizer-related nitrous oxide, and water impacts are counted. Certification helps, but controversy persists, particularly around palm oil and deforestation.

Major sustainability concerns include:

• ILUC and deforestation: Expanding cropland to meet fuel demand can displace forests and grasslands, eroding carbon gains.
• Fertilizers and N2O: Nitrous oxide is a potent greenhouse gas; yield gains and better practices help but don’t eliminate risk.
• Water and runoff: Irrigation needs and nutrient runoff affect watersheds and biodiversity.
• Food vs. fuel: Diverting edible crops to fuel can tighten food markets and spur price spikes.

Waste- and residue-based fuels generally deliver stronger climate performance, but feedstock volumes are limited and depend on robust traceability and certification (e.g., RSB, ISCC) to maintain credibility.

Policy and Market Signals

Biofuels rely heavily on policy. In the United States, EPA’s Renewable Fuel Standard sets annual volumes and generates credits (RINs), but targets and credit prices can swing. In the EU, Renewable Energy Directive caps high-ILUC-risk biofuels and tightens sustainability rules, while phasing down palm oil. Emerging SAF mandates (such as the EU’s ReFuelEU Aviation) are boosting demand but from a small base. Policy shifts and periodic legal challenges make long-term investment risky.

Scale: Feedstocks and Technology Bottlenecks

The industry’s toughest challenge is scaling truly low-carbon fuels without stressing land or food systems. Cellulosic ethanol and next-generation platforms promised breakthroughs but have struggled with cost, enzymes, and reliability. Algae-based fuels remain in R&D. Renewable diesel and SAF output is rising quickly, yet constrained by limited waste oils, fats, and residues. Co-processing in refineries helps, but feedstock competition with food and chemicals persists.

Competition From Electrification

Passenger cars—the bulk of road vehicles—are rapidly electrifying. Automaker portfolios, charging buildouts, and government targets for zero-emission vehicles shift capital and policy attention away from liquid biofuels in light-duty transport. As EVs take market share, the addressable market for gasoline and high-ethanol blends shrinks, undercutting the growth case for many biofuels.

Where Biofuels Make Sense Today

Biofuels are gaining traction in niches where alternatives are limited, infrastructure is compatible, or emissions targets are stringent.

• Aviation: SAF, especially HEFA and alcohol-to-jet, is scaling with mandates and tax credits, though it’s still 2–5x the price of fossil jet fuel.
• Heavy-duty and off-road: Renewable diesel offers drop-in emissions cuts without engine changes, seeing uptake in fleets and municipal services.
• Marine pilots: Bio-methanol and bio-LNG are being tested alongside synthetic e-fuels in specific corridors.
• Brazil’s sugarcane ethanol: Strong agronomy and flex-fuel vehicles enable higher ethanol shares with relatively favorable lifecycle emissions.

These applications illustrate how policy support, suitable feedstocks, and compatible engines can align to make biofuels practical despite broader headwinds.

What Could Change the Outlook

Several developments could lift biofuels from niche to broader relevance if they materialize at scale and cost.

• Stronger, stable policies: Long-dated SAF mandates, low-carbon fuel standards, and predictable credits reduce investment risk.
• Advanced pathways: Cost breakthroughs in lignocellulosic, alcohol-to-jet, and gasification/FT routes with low-carbon hydrogen.
• Better feedstock ecosystems: Expanded collection of agricultural residues, municipal waste, and improved waste-oil traceability.
• Engine and blend innovations: Wider certification for higher blends and materials compatible with ethanol and biodiesel.
• Carbon pricing: Durable, rising carbon costs that close the gap with fossil fuels.

If these levers align, biofuels—especially waste- and residue-derived—could see broader adoption in hard-to-electrify segments.

Summary

Biofuels aren’t very popular because they’re often more expensive, run into blend and infrastructure limits, face contested sustainability impacts, and operate under uneven policy signals—all while competing with fast-rising electrification. Their most credible near-term growth lies in aviation, heavy-duty diesel, and regions with strong feedstock advantages. Without stable policy, scalable low-carbon feedstocks, and cost breakthroughs in advanced pathways, biofuels will remain important but niche contributors to transport decarbonization.

Why is biodiesel not more widely used?

One of the major problems faced by the use of biodiesel is increased emission of NOx which can result in the formation of smog and acid rain. Biodiesel has lower energy output as compared to petro-diesel. Hence, in order to get the same amount of energy, more biodiesel is used than petro-diesel.

What is the main problem with biofuels?

A significant problem with biofuels is the competition for land and water resources with food production, which can lead to increased food prices, food insecurity, and deforestation to create new farmland for biofuel crops. Furthermore, biofuel production and burning can release air pollutants like ozone and nitrogen dioxide, posing risks to public health. 
Competition for Resources

• Food Prices and Security: Opens in new tabGrowing crops for biofuels requires vast amounts of land, water, and fertilizers, diverting these resources from food production. This reduced supply of food crops can drive up prices, threatening food security, especially in lower-income countries. 
• Deforestation and Habitat Loss: Opens in new tabTo expand biofuel crop cultivation, natural habitats like forests and grasslands are often cleared. This deforestation leads to habitat destruction, loss of biodiversity, and the release of stored carbon from trees into the atmosphere. 
• Water Strain: Opens in new tabThe large volumes of water needed for growing biofuel crops and refining them can deplete underground aquifers, which are also used by farmers for irrigation. 

Health and Environmental Impacts 

• Air Pollution: Opens in new tabThe burning of biofuels and emissions from biofuel refineries can release toxic particles, ozone, and nitrogen dioxide into the air. These pollutants can trigger respiratory illnesses like asthma and are associated with heart attacks, cancer, and premature death, particularly affecting vulnerable groups like the elderly and children. 
• Soil Degradation and Water Contamination: Opens in new tabThe intensive farming practices often used for biofuel crops, such as monoculture, can lead to soil degradation. Runoff from fertilizers and pesticides used to grow these crops can also pollute soil and water sources. 
• Greenhouse Gas Emissions: Opens in new tabWhile often presented as a carbon-neutral alternative, the process of producing and refining biofuels can result in significant greenhouse gas emissions, sometimes comparable to or even exceeding those of fossil fuels, especially when deforestation and land-use changes are involved. 

Why is biofuel not popular?

Among other things, some energy crops compete with food crops for land, creating problems like higher food prices and deforestation. In addition, the costs of converting some energy crops, as well as retrofitting cars and power plants to run on biofuel, can be pricey [source: Brune].

What are five disadvantages of biofuels?

Disadvantages of biofuels

• Impact on drive units.
• Less energy efficiency.
• Increase in food prices.
• Risk to biodiversity.
• Water demand.
• Degradation of natural habitats.
• Technical problems.