As we enter 2026, the biofuels industry stands at the intersection of accelerating policy mandates, global disruptions, and a surge of innovation. Over the next 12 months, one or two defining trends will reshape our sector: the drive for decarbonization and the expansion of advanced biofuel capacity. Both trends represent profound opportunities—for climate action and commercial leadership—even as they pose new challenges for producers, investors, and policymakers alike.

Decarbonization and Advanced Fuels

Across global markets, governments are tightening emission norms and increasing required biofuel blending volumes for gasoline and diesel. Decarbonization targets are now central to energy and transport strategies. The result: robust policy signals encouraging refineries and energy producers to invest in renewable diesel, sustainable aviation fuel (SAF), and next-generation bioethanol. Recent policy actions include:

・Across the EU, the RED III directive and national obligations drive up renewable fuel requirements, with several member states like Finland mandating an increase in biofuels’ share from 18% to 30% by 2030.

・In the U.S., the Environmental Protection Agency (EPA) has proposed record-high Renewable Fuel Standard (RFS) quotas for 2026 and 2027, aiming to increase required blending percentages for advanced biofuels and biomass-based diesel. The agency has indicated plans to require large oil refiners to blend more biofuels, offsetting exemptions for smaller competitors.

・Brazil’s Fuel of the Future Law raised the ethanol blending requirement in gasoline from 27% to 30% in 2024, with a targeted increase to 35% ahead. Biodiesel blending in diesel has also climbed from 14% to 15% this year, with a roadmap outlined to reach 20% by 2030, and a specially formed government committee now examining the feasibility of even higher blends.

・India has introduced mandatory compressed biogas blending, starting at 1% in 2025–26 and accelerating to 5% by 2028–29, alongside ambitious ethanol and biodiesel targets.

・The Philippines will raise its biodiesel blend rate from 2% to 5% by October 2026, with the Department of Energy already publishing guidelines for these staged increases to reduce imports and control emissions.

・Indonesia is enacting a significant policy leap, lifting its domestic biodiesel mandate from 40% (B40) to 50% (B50) by late 2026, which will significantly boost domestic palm oil consumption and tighten global feedstock supply chains.

・Vietnam’s Ministry of Industry and Trade has issued mandatory ethanol blending targets set to begin in 2026 as part of its energy transition strategy.

At the same time, advances in feedstock conversion—including enzymatic hydrolysis and catalytic upgrading—are leading to the emergence of second- and third-generation biofuels with improved energy density and sustainability profiles. These innovations make it feasible to decarbonize "hard-to-abate" sectors such as aviation and marine transport, a key focus for many national energy plans.

Policy and Legislation Shaping the Future

The policy landscape for 2026 is shifting rapidly. In the US, the EPA’s proposed Renewable Fuel Standard (RFS) overhaul will redefine how renewable volume obligations work, slashing credit eligibility for imported fuels and introducing new equivalence values. Legislation around year-round E15 authorization and tougher exemption requirements are also expected to impact volume targets, compliance costs, and market access for both large and small refiners.

In Europe, delays in national implementation of the RED III directive could drive higher demand for imports and advanced biofuels, compounding existing market volatility. Meanwhile, the Dutch Fuel Transition Obligation will shift cumulative requirements from energy targets to direct CO₂ reductions, fundamentally recalibrating how voluntary climate credits and claims are generated and certified.

Navigating Challenges: Supply Chains and Investment

Global events continue to bring supply chain pressures and energy price volatility into sharp relief. Feedstock procurement remains challenging, with heightened competition for used cooking oil, waste oils, and other sustainable inputs. Logistics disruptions, currency risk, and the geopolitical landscape are driving investors to favor domestic production and integrated supply networks.

Yet these pressures are spurring investment in regional capacity expansions and new production hubs—an avenue where EcoCeres is at the forefront. Strategic partnerships with agricultural suppliers, oil refiners, and transport companies are becoming crucial for navigating fluctuating inputs and demand patterns.

EcoCeres: Innovation, Expansion, and Leadership

EcoCeres is responding proactively to these dynamics by combining technology leadership with a disciplined expansion of production capacity. In 2025, the company’s Johor, Malaysia plant came online as a major regional production hub for  SAF, hydrotreated vegetable oil (HVO), and renewable naphtha, built on proprietary technologies that convert waste oils and residues into high-value renewable fuels.

Looking ahead, EcoCeres is continuously seeking to expand its overall production capacity by evaluating additional biorefinery locations that can serve both regional demand and export markets. The company is actively growing its international footprint, with a particular focus on supplying customers in Europe, Southeast Asia, and the Middle East as policy-driven demand for SAF and renewable diesel accelerates in these regions.

Beyond Johor, EcoCeres’ roadmap includes scaling biorefinery capacity across its existing network, advancing research in waste-based fuels, and strengthening collaboration with governments, airlines, and industry partners to accelerate policy alignment and commercial adoption.

ESG, Resilience, and the Future

The key message for readers is clear: biofuels are no longer niche. They are essential tools for decarbonization and energy security, offering scalable solutions for transportation, power generation, and industry. Sectoral resilience amid inflation, volatility, and logistics disruptions will hinge on technological innovation, regional integration, and forward-looking partnerships.

EcoCeres is uniquely positioned to lead this charge—leveraging a rigorous ESG framework, robust technical capabilities, and an expanding international footprint. By aligning with the world’s boldest climate ambitions, we are confident that sustainable biofuels will become pivotal enablers of the global energy transition by 2026.

Looking Ahead with Optimism

Despite ongoing challenges, the outlook for the biofuels industry is optimistic. Policy convergence, investor appetite, and technological breakthroughs are aligning in unprecedented ways. For EcoCeres, the next 12 months are an opportunity to deliver meaningful climate impact at scale and to demonstrate how private sector leadership—rooted in innovation and collaboration—can build a more sustainable energy future for all.