The Future of Biofuels: Policy Lessons and Research Directions

Overlapping economic, energy security, and environmental rationales have contributed to relatively broad political support for biofuel policy in the United States over time. Biofuels can reduce reliance on imported petroleum, create new markets for agricultural and forestry products, and are often discussed as a potential near-term option for decarbonizing difficult-to-electrify sectors such as aviation, marine shipping, and heavy-duty transport. Expanding biofuel production, however, can impact land and water use, biodiversity, and competition with food crops, and there is ongoing debate about how biofuel production, and the policies that support it, affect greenhouse gas emissions. Drawing on a 2025 Resources for the Future webinar series and a follow-up expert discussion with participants from industry, policy, and academia, this report discusses the potential role of biofuels in the energy transition, provides an overview of key areas of debate in life-cycle assessment and indirect land use change modeling, and highlights lessons from experience with existing federal and state biofuel policies. The report concludes by identifying policy-relevant knowledge gaps and research needs.