To satisfy decarbonization targets, Big Oil invests billions in the manufacture of biofuel

The top oil and gas firms in the world are boosting their investments in the biofuels industry in response to mounting pressure to decarbonize and move away from conventional fossil fuels. Recognizing the increasing demand for sustainable fuel sources worldwide, major firms including BP, Chevron, Shell, TotalEnergies, ExxonMobil, and Eni are integrating biofuels into their larger energy transition strategies. These six oil companies have disclosed 43 biofuel projects that are either now underway or are scheduled to begin operations by 2030, per Rystad Energy’s study. Although investments are being made in a variety of biofuel products, including as ethanol and biodiesel, the main emphasis is on sustainable aviation fuel (SAF) and hydrotreated vegetable oil (HVO), which are anticipated to make up nearly 90% of the projected biofuel production.

Thirty-one projects are greenfield developments, according to an analysis of the implementation of these investments, which could increase production capacity by a total of 286,000 barrels per day (bpd). Six entail co-processing, which is the integration of biofeedstock into already-existing crude-oil refineries to provide a blended feedstock; six more entail complete refinery conversions to facilities solely focused on producing biofuel. Oil majors entering the biofuels sector find co-processing to be an attractive alternative since it is a cost-effective strategy that enables businesses to take use of pre-existing infrastructure and lower upfront costs.

Promising changes in the industry are indicated by the 43 biofuel initiatives that oil majors have disclosed. The biggest of the 31 greenfield projects, Chevron’s Geismar project, is expected to increase global capacity by a substantial 22,000 barrels per day of biofuel production. Additionally, last year, a diesel hydrotreating unit at Chevron’s El Segundo refinery—the largest in terms of co-processing capacity—was transformed into a 10,000-bpd renewable facility. Additionally, BP’s Kwinana project, the biggest refinery conversion to date, has the potential to greatly boost the generation of sustainable fuels. By 2030, this project is expected to produce 50,000 bpd of HVO and SAF, a gamechanger that could be pivotal for meeting rising demand for biofuels in the near future.

With the highest disclosed production capacity in its pipeline—a total of 130,000 barrels per day of ethanol and HVO/SAF capacity—BP stands out among the top corporations and establishes itself as a global leader in the bioenergy sector. Even while many of these initiatives are still in the development stage, other large oil companies such as Chevron, Eni, Shell, TotalEnergies, and ExxonMobil are also making noteworthy progress, especially in the field of advanced biofuels.

In terms of operational capabilities, BP and Chevron occupy important positions. After purchasing Bunge Bioenergia, a well-known biofuel manufacturer in Brazil, BP significantly expanded its production capacity to over 66,000 barrels per day. Through the acquisition, BP was able to surpass its 2025 milestone of 50,000 barrels per day and is now in a position to meet its 2030 biofuel target of 100,000 barrels per day. Further solidifying their positions in the growing biofuels industry are Chevron’s acquisition of Renewable Energy Group and Eni’s operational advanced biofuel capacity of 22,000 bpd, which is powered by both co-processing and conversion projects.

There is a noticeable trend toward advanced biofuels, especially HVO and SAF, as oil majors transition to lower-carbon energy. Companies are increasing production to satisfy the growing demand from the heavy transportation and aviation industries. As the market for fossil fuel alternatives expands and the 2030 decarbonization targets approach, biofuels are witnessing a notable surge in investment and innovation, albeit certain project delays.