BAKU, Azerbaijan, November 6. Renewable energy consumption in the transportation sector is projected to grow by 60% by 2031, with electric vehicles and liquid biofuels serving as the main drivers of this growth.
This was stated in the International Energy Agency (IEA) report “Renewables 2026: Analysis and forecasts to 2031.”
According to the report, over the forecast period, the share of renewable energy in transportation will reach 6% of the global transportation sector’s total energy demand. Approximately half of this growth will be driven by renewable electricity used by electric vehicles. China and Europe will account for 80% of this growth.
Liquid biofuels will remain the second-largest source driving the growth in renewable energy consumption in the transportation sector. The main factors cited in this area include stricter government mandates for biofuels and growing demand for transportation fuels. New markets are expected to emerge, particularly in aviation and maritime transport. The introduction of government requirements for sustainable aviation fuel (SAF) and the expansion of regulations regarding low-carbon fuels will drive this process forward.
Along with this, the production of biomethane, renewable hydrogen, and synthetic fuels (e-fuels) is projected to expand rapidly. These energy sources will create additional opportunities for long-term emissions reduction, particularly in transport sectors that are difficult to electrify.
The IEA also emphasizes the importance of sustainability criteria for expanding liquid biofuel production. According to the report, global demand for biofuel feedstock will increase by 30% by 2031. The fastest growth is expected in oil-based feedstocks used in the production of biodiesel, renewable diesel, and aviation biofuel.
The agency notes that liquid biofuels have the potential to significantly reduce life-cycle greenhouse gas emissions across various modes of transport. However, the development and full implementation of transparent, reliable, and internationally agreed-upon sustainability mechanisms are essential for scaling up production. High fertilizer prices and extreme weather events such as El Niño are also among the factors affecting biofuel production prospects.
The report states that the role of renewable energy will also grow in the heating sector. Thus, the share of modern renewable energy sources in heat demand is projected to rise from 15 percent in 2025 to 19 percent by 2031. This shift will create conditions for diversifying heat supply, reducing dependence on fossil fuels, and enabling carbon dioxide emissions from the heating sector to begin declining for the first time in history.
The use of renewable electricity through heat pumps and industrial electrification is expected to increase by more than 50% during this period. These sources will account for about two-thirds of the growth in demand for modern renewable heat. Meanwhile, direct heat from advanced bioenergy systems, solar thermal systems, and geothermal sources will continue to account for a significant share of total consumption.
The IEA views the expansion of heat pumps and district heating networks as key opportunities to accelerate the decarbonization of the heating sector. Currently, only 7% of global district heating is supplied by renewable energy. However, these networks have significant potential for integrating renewable and reused heat on a larger scale.
Rapid growth in biomethane production is also expected. According to the report, global biogas production will increase by approximately 20% by 2031, and this growth will be entirely driven by biomethane. Biomethane production is projected to nearly double. As a result, its share of total biogas production will increase from the current 22% to 35% in 2031.
"Europe will retain its position as the largest producer of biomethane, while the US will rank second. Production is also expected to expand in developing countries. In particular, biomethane production in India is projected to increase approximately ninefold by 2031. Brazil, China, and India are developing policies and mechanisms to support the growth of this sector.
Nevertheless, despite the significant technical potential of organic waste and agricultural residues, the establishment of commercial feedstock supply chains remains one of the main challenges hindering faster production expansion,” the report emphasizes.
The report also notes that the use of biomethane is expanding from the automotive sector into industry and the construction sector. Meanwhile, the use of bio-liquefied natural gas (Bio-LNG) in maritime transport, particularly in Europe, stands out as a promising alternative for meeting decarbonization requirements.
According to the IEA, domestic production of biogas and biomethane is already helping to reduce some European countries’ dependence on natural gas imports. This production has reduced import dependence by 22 percentage points in Sweden, 10 percentage points in Germany, and 8 percentage points in France.
Thus, the report emphasizes the importance of expanding the use of renewables in the transportation, heating, and natural gas sectors in order to strengthen energy security, reduce dependence on imports, and cut emissions.
