Global Investment in Renewable Fuels Must Quadruple to Drive Decarbonisation and Industrial Growth
The 56th Annual Meeting of the World Economic Forum currently held in Davos has once again prioritised energy within the global economic and geopolitical discourse. Under the theme A Spirit of Dialogue the forum highlights the critical role of renewable fuels in shaping the future energy landscape. The World Economic Forum has published the report Fuelling the Future How Business Finance and Policy can Accelerate the Clean Fuels Market which delivers a clear message renewable fuels offer a strategic opportunity to advance decarbonisation enhance energy security and bolster economic and industrial growth
According to the report liquid and gaseous fuels account for 56 per cent of the global final energy consumption and will remain essential by 2050 even amid rapid electrification. Sustainable fuels including biofuels biogases e-fuels hydrogen and its derivatives as well as lower-carbon intensity fuels are becoming an indispensable solution across all sectors. They are particularly vital for hard-to-electrify industries such as aviation heavy transport and maritime sectors. Furthermore these fuels enable immediate emissions reductions by utilising existing infrastructure through blending schemes or direct utilisation
The report emphasises the realisation that the next decade is pivotal. Without accelerating investment decisions before 2030 achieving climate goals for transport and industry will be impossible. The World Economic Forum estimates that global investment in renewable fuels must increase fourfold over the next five years from approximately 25 billion dollars annually to over 100 billion dollars. The principal barrier is not lack of capital but the absence of consistent regulatory and market frameworks that lower risks and enable project financing. Nearly 90 per cent of projects announced for 2030 are still awaiting final investment decisions
Beyond environmental benefits the report stresses the economic and social value these solutions offer. Biofuels have the potential to generate two to three times more employment than conventional alternatives especially in rural and industrial areas. They also contribute to reducing the energy dependence of net importing nations by between 5 and 15 per cent. Technologically these fuels can reduce lifecycle emissions by over 65 per cent with some configurations achieving reductions of 90 per cent or even enabling negative emissions through carbon capture provided strong environmental safeguards are maintained
However barriers such as high initial costs higher short and medium-term fuel prices compared to fossil fuels fragmented value chains uncertain demand and regional policy disparities persist. The World Economic Forum advocates for stable predictable results-oriented policies focused on emission reductions rather than specific technologies. Market instruments public-private financing schemes and early demand commitments are necessary to lower capital costs and expedite scaling
Internationally ambitions are rising with initiatives like the Belem Declaration 4x endorsed during COP30 supported by over 25 countries aiming to quadruple renewable fuel production and use by 2035. This aligns with IEA forecasts and demonstrates a convergence between climate commitments and economic strategies
Practical examples from around the world including projects in Spain such as the Tarragona Eco-Plant and the Cartagena C-43 plant illustrate the feasibility of scaling renewable fuels. Spain possesses significant potential to become a leader in fully renewable and circular fuel production which could be crucial for reindustrialisation and Europe's strategic independence
As the Davos discussions reveal the challenge now shifts from technological development to coordinated implementation involving supportive policies financing and business action. Transforming global consensus into tangible projects will be essential to achieve an energy transition that is environmentally ambitious economically competitive and socially equitable