4 November 2014: Biofuels account for 1% of global energy use, according to a report published by the UN Conference on Trade and Development (UNCTAD). The report, titled ‘The State of the Biofuels Market: Regulatory, Trade and Development Perspectives,’ offers a snapshot of the biofuels market and its contribution to energy access and improved livelihoods in developing countries.

The study, which updates a 2006 UNCTAD report, notes that bioethanol and biodiesel are traded in the transport sector on all continents, particularly for road vehicles. It also describes the emergence of alternative markets for liquid biofuels, currently being used for commercial aviation, electricity generation, cooking and maritime transport. While biofuel use has increased since 2006, concerns with its use have led to a regulatory push for second-generation biofuels, including those made from woody crops, agricultural residues and waste.

The study focuses on the opportunities for and challenges faced by developing countries, in terms of diversifying energy sources and reducing dependence on fossil fuels, mitigating climate change effects, increasing markets for agriculture products and enhancing the participation of rural communities in economic activities.

The report recommends: creating regulatory frameworks that enhance agricultural productivity, rural income and workers’ skills, rather than hurt food supplies; developing international strategies to avoid the emergence of a technological gap between land-intensive first generation and capital-intensive second-generation biofuels; ensuring that certification costs are distributed along supply chains; promoting private investment and production and process technologies for developing countries; prioritizing research and deployment of technologies that can convert non-edible biomass into bioenergy products; and facilitating trade by adopting regulations that are compatible with sustainability rules in major markets.

The report includes sections on: recent developments in international energy scenarios; biofuel use in transport; market and regulatory developments for biofuels; the state of technological progress of the biofuel industry; support measures for the biofuels sector; linkages between biofuels and broader development challenges; trade flows of biofuels and related feedstocks; recent developments and World Trade Organization (WTO) implications; and UNCTAD’s activities under its BioFuels Initiative. [UNCTAD News Story] [Publication Website] [Publication: The State of the Biofuels Market: Regulatory, Trade and Development Perspectives]