Biofuels are one of a handful of viable medium-term solutions for helping to decarbonise supply chains, according to a new report.
GlobalData’s Decarbonizing Supply Chain Logistics report notes that biofuels, derived from biomass like crops and waste oils, emit less CO2 than fossil fuels over their lifecycle. They are not entirely free of emissions, though, and so are not a long-term solution. However, they can bridge the gap while readiness for electrification and hydrogen is built.
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“They can be used in trucking, shipping and aviation without modifying existing engines, making them more cost-effective to adopt as they do not need new vehicle fleets,” the report explains. “They are also widely available, though not in large volumes.”
This last point is a significant hurdle in the adoption of biofuels, requiring, as many do, land for their production.
“There are some downsides to biofuel production,” the report says. “It can lead to direct land use change by converting land for biofuel crops, impacting agricultural activity and food production. In February 2025, shipping companies like Hapag-Lloyd called on the UN International Maritime Organization to exclude unsustainable biofuels from its list of green alternatives to fossil fuels. Deforestation was also a key issue cited in the plea.”
With this in mind, GlobalData suggests that investment into advanced and waste biofuels that use products like sewage sludge and waste cooking oils should be prioritised to improve the sustainability of biofuels.
The report adds: “The two most common types of biofuels are biodiesel and ethanol. Consumption of both these fuels is expected to grow strongly up to 2030 before slowing due to the uptake of hybrid and electric vehicles.”
It forecasts that biodiesel consumption will flatline after 2030 due to the uptake of electric vehicles.
In addition to adopting lower-carbon fuels, GlobalData’s report outlines that contributions toward decarbonising supply chains can be achieved through electrification, vehicle redesign, modal shifts and optimisation, carbon capture and storage and efficiencies made for storage units like warehouses.
