Sustainable Aviation Fuel (SAF), perhaps the most strategically significant biofuel of the coming decade, is produced from a range of waste feedstocks including agricultural residues, municipal solid waste, and used cooking oils. Aviation is one of the hardest sectors to decarbonise and one of the most exposed to crude oil price volatility. Countries that develop domestic SAF production capacity insulate their aviation sectors — and by extension, their tourism, trade, and logistics industries — from the kind of fuel price shocks that the Iran-Israel-US conflict has generated.
Countries that held the line: Real-world examples
The clearest argument for biofuels is not theoretical — it is the lived experience of countries that had already invested in domestic biofuel programs and found themselves meaningfully cushioned from the worst of the crisis.
Brazil stands as the most compelling example globally. Over decades of consistent policy under programmes like ProAlcool, RenovaBio, and the Fuel of the Future Law, Brazil built a biofuel economy of enormous scale. Ethanol blending in petrol has been raised to 30 per cent (E30), while biodiesel blending in diesel is set at 15 per cent (B15), both effective from August 2025. In addition, due to the widespread use of flex-fuel vehicles, ethanol’s share in total transport fuel consumption (including hydrous ethanol, E100) is estimated at approximately 45 per cent, making Brazil one of the highest ethanol-penetration fuel markets globally. When crude prices surged amid the West Asia conflict, Brazilian consumers at the pump were insulated from the full shock: the domestic ethanol supply, priced independently of global crude markets, provided a competitive alternative. Brazil’s flex-fuel vehicle fleet — which allows drivers to switch between petrol and ethanol based on price — gave consumers a direct, real-time hedge against import price spikes. The country’s energy security was not a product of luck; it was a product of policy made decades in advance.
Similarly, India, despite being a major fossil fuel importer, has rapidly advanced its Ethanol Blended Petrol (EBP) program and has already achieved 20 per cent ethanol blending. India has partially decoupled its petrol supply from global crude oil shocks. This has so far helped avoid increases in retail fuel prices, offering a real-time demonstration that even partial biofuel deployment can enhance economic resilience.
Moreover, India’s ethanol production capacity stands at approximately 18.2 billion litres, while the E20 programme requires about 10.2 billion litres annually, leaving a surplus of nearly 8 billion litres. A portion of this excess could be redirected towards clean cooking; for instance, allocating 4 billion litres could meet the cooking fuel needs of around 40 million households, assuming an average annual consumption of about 125 litres per household.
Indonesia offers a parallel story from Southeast Asia. As the world’s largest palm oil producer, Indonesia mandated a 40 per cent biodiesel blend (B40), substituting a significant volume of diesel that would otherwise have been imported. When the Ras Laffan shutdown tightened global diesel supply and LNG availability collapsed, Indonesia’s palm-based biodiesel program provided direct cushioning for its transport and power generation sectors.
Denmark offers an illustrative example. Presently, biomethane constitute close to 40 per cent of Danish gas demand, with the country on track to reach 100 per cent green gas in the grid before 2030. This high share of domestically produced biomethane has strengthened Denmark’s gas security and reduced its exposure to imported gas price volatility arising from geopolitical tensions.
These examples collectively make the case: countries that invested in biofuels before the crisis struck were better positioned during it. The protection was not absolute, but it was real, measurable, and proportional to the depth of the program.
What countries must do to scale biofuels
The gap between biofuel potential and biofuel reality remains wide for most countries. Closing this gap requires deliberate, sustained policy action across several dimensions.
First, governments must establish clear blending mandates that create guaranteed domestic demand. Without a mandated market, private investors cannot justify the capital expenditure required to build refineries, collection networks, and supply chains. Mandates should be progressive — starting at achievable levels and rising over time — to signal long-term commitment while allowing industries to mature.
Second, national feedstock strategies must be developed. Governments need to conduct systematic assessments of their agricultural and municipal waste streams, identify the most viable conversion pathways, and design policies that channel these feedstocks into biofuel production rather than landfills or open burning. This requires coordination between various ministries, environment agencies, and energy regulators.
Third, financing mechanisms must be unlocked. Biofuel infrastructure is capital-intensive, and private sector participation requires de-risking instruments such as blended finance, loan guarantees, concessional lending, and access to sufficient working capital finance. Development finance institutions have a critical role in structuring the first-of-a-kind projects that demonstrate commercial viability and attract subsequent private investment.
Finally, research and technology transfer programs must be prioritised. Many developing countries have the feedstock but lack the technical capacity to efficiently convert it. International cooperation on technology licensing, capacity building, and knowledge transfer can dramatically shorten the learning curve.
The lesson of every war: Dependence is vulnerability
The Iran-Israel-US conflict has written the same lesson in the same ink that the 1973 Arab oil embargo, the 1990 Gulf War, and the 2022 Russian invasion of Ukraine all wrote before it: energy dependence on distant, politically unstable sources is a structural vulnerability that no country can afford to ignore.
Biofuels do not offer silver bullets. They are one component of a broader energy diversification strategy that must also include renewables, energy efficiency, and storage. But they offer something that solar panels and wind turbines currently cannot: a direct, drop-in substitute for liquid fuels in transport, aviation, and industry — sectors where alternatives remain limited and where import dependence bites hardest when crises strike.
Every tonne of organic waste converted into biomethane, every litre of used cooking oil refined into biodiesel, every hectare of energy crops cultivated on marginal land is a small act of strategic sovereignty. Taken together, at scale, these acts constitute a nation’s insurance policy against the next war, the next blockade, and the next price shock — whatever form they take and wherever they originate.
