Is a biofuel blending requirement a cost-effective measure to reduce climate emissions?

How is the European energy system affected by different biofuel blending requirements for liquid fuels in the medium and long term?

The results of this study suggest that cost-effective system solutions that reach the emission targets for the year 2040 may mean that the need for liquid fuels for the transport sector is still based on fossil raw materials. For 2060, the emissions target will be reached with the help of electrofuels and by compensating the use of fossil-based liquid fuels via negative emissions.

In these time perspectives, requirements for 20 percent mixing of biofuels in liquid fuels would increase the total energy system cost by 2-14 percent in 2040 (10-66 billion Euros). In 2060, a 50 percent blending requirement would increase the cost by 4-8 percent (18-40 billion Euros). The explanation for the increase in 2060 is the limited availability of biomass and that the production of biofuels, via the Fischer Tropsch process, results in higher costs than if the biomass had been used for industrial heat and cogeneration.

The researchers point to ways to reduce carbon dioxide emissions from the energy system as a whole that are cheaper than blending requirements. To avoid lock-in effects in a future with the conditions described by the model, the development of flexible biorefineries is important. They can adjust their production to respond to market needs.

The system costs have been developed using an energy system model covering all energy sectors in Europe: electricity, heating, transport, industrial heat and chemicals. The study assumes that the demand for liquid carbon-based fuels decreases sharply over time, from 30 percent of primary energy demand in 2040 to 15 percent in 2060.

The reduced demand is based on expectations of reduced costs for electricity and hydrogen production, that there will be significant electrification of the transport and industrial sectors and that part of the fuel demand will be met by hydrogen. It is assumed that carbon dioxide capture and storage is integrated with biomass use for power and industrial heat, and with biofuel production. Liquid biofuels from solid biomass are assumed to be produced via the Fischer Tropsch process.

The researchers assume that compared to the 1990-year level, there will be a requirement for 80 percent lower carbon dioxide emissions from the EU’s energy and transport system in 2040, and that the reduction requirement in 2060 will be 105 percent, i.e., negative emissions corresponding to 5 percent of the emissions for 1990.

Results were presented (in Swedish) in a webinar on 22 March, 2022. A recording is available here:


Fredrik Hedenus, Chalmers


Markus Millinger, Göran Berndes and Lina Reichenberg, Chalmers // Tom Brown and Elisabeth Zeyen, Technische Universität Berlin

Time plan
1 July 2020 - 31 December 2021

Total project cost
2 253 000 SEK

The Swedish Energy Agency, the f3 partner organisations, Chalmers and KIT.

Swedish Energy Agency's project number within the collaborative research program

The project has a reference group including representatives from Preem, Göteborg Energi, Energiföretagen, Södra and Fossilfritt Sverige.