Nexus Biofuel Consumption, Economic Growth and Environment in Saudi Arabia: Current and Prospective

Environmental and climatic alterations, coupled with increasing economic activity and increasing energy demand, have reinforced the global need to develop substitute fuels as a means of reducing reliance on fossil fuels. Saudi Arabia has shown increasing biofuel consumption (charcoal and fuelwood) in recent years. Thus, this study was designed to examine the relationship between biofuel energy consfumption, economic growth and the environment. Accordingly, the study comprises dual portions: the first tests the cointegration association among biofuel consumption and economic growth, while the second discovers a cointegration association among biofuel consumption and carbon dioxide emissions. The study also includes a forecasting analysis. Data on biofuel energy consumption, economic growth and the environment were compiled from numerous sources covering the period from 1990 to 2023. Engel–Granger method assessments revealed long-term relationships between bioenergy consumption, economic growth, and environmental quality. FMOLS and DOLS estimates yielded results well-matched with those acquired using the Engel–Granger method. Furthermore, the gross rates of biofuel consumption equal 2.40% for the period 2010–2023 and 2.80% for the forecast period 2023–2035. Similarly, the growth rates of gross domestic product were calculated at 7.50% for the period 2010–2023 and 11.00% for the projected period 2023–2035. Also, the gross rates of CO 2 emissions were calculated at 1.90% for the period 2010–2023 and 0.95% for the projected period 2023–2035. The results indicate that biofuel consumption is expected to continue growing at a faster rate, joined by strong economic growth. Particularly, the projected slowdown in carbon dioxide emissions suggests a possible decoupling of economic activity from environmental degradation. These findings underscore the need to promote biofuel development and clean energy policies to reinforce sustainable economic growth while reducing emissions in the long term.