A future fueled by sustainability  

October 20, 2025

The International Energy Agency (IEA) has projected a dramatic rise in the global use of sustainable fuels by 2035, provided that existing and announced policies are implemented alongside targeted measures to attract investment and reduce market barriers. The agency outlined these findings in its latest report, Delivering Sustainable Fuels: Pathways to 2035, released ahead of Brazil’s upcoming 30th Conference of Parties (COP30) to the United Nations Framework Convention on Climate Change.

Sustainable fuels, including biofuels, biogases, low-emissions hydrogen, and hydrogen-based fuels, are positioned as essential complements to electrification and key tools in reducing dependence on fossil fuels. According to the IEA, these fuels not only support energy transition but also enhance energy security, foster economic development, and strengthen environmental sustainability.

Currently, sustainable fuels are already making an impact. They have reduced global oil demand by roughly 2.5 million barrels per day in 2024 and lowered transport fuel import dependence by 5–15 percentage points in importing nations. Liquid biofuels dominate the market, accounting for about 4 per cent of global transport energy demand, while biogases and low-emissions hydrogen are gradually entering the sector. In countries like Brazil, renewable fuels already constitute close to 10 per cent of total energy consumption.

Despite higher costs compared to fossil fuels, the IEA notes that innovation can narrow the price gap. Emerging pathways, such as alcohol-to-jet fuels and hydrogen-based synthetic fuels, are still in early commercial stages but are expected to become more affordable as technologies scale and financing costs decrease. In some regions, including ethanol markets in Brazil and the United States, sustainable fuels are already competitive with fossil alternatives. The agency also estimates that consumer impacts remain modest; for instance, a 15 per cent blend of sustainable aviation fuel would raise air ticket prices by just 5–7 per cent.

Looking ahead, the IEA projects that sustainable fuel use could quadruple by 2035. Transport will continue to drive demand, but industrial and power generation sectors are expected to increase usage after 2030, particularly through low-emissions hydrogen in chemicals, refining, and steel production. By 2035, sustainable fuels could meet 10 per cent of global road transport demand, 15 per cent of aviation fuel demand, and 35 per cent of shipping requirements. The transition could require cumulative investments of USD 1.5 trillion and create nearly 2 million jobs worldwide.

To accelerate adoption, the IEA identifies six priorities: establishing region-specific policies, improving demand predictability, developing transparent carbon accounting, supporting innovation, building integrated supply chains, and expanding finance access in emerging economies. The report emphasizes that international cooperation and stakeholder engagement will be crucial in aligning global demand with regional strengths.