Recent diesel supply shortages around the world raise the question of whether Australia’s competitors in global grains and oilseeds markets are in a more secure fuel-supply position, and whether their domestic biofuel production makes them less vulnerable to diesel supply shocks.

RaboResearch general manager Stefan Vogel said global biodiesel production in 2026 is expected to reach almost 70 million tonnes, equivalent to around 5% of global diesel use. “In several countries, biofuels are substituting to help meet diesel demand, partially improving fuel security in these nations,” he said.

Mr Vogel said among the world’s largest grain exporters, Australia has one of the lowest levels of diesel self-sufficiency, alongside Ukraine. “Australia competes with countries such as the US, Argentina, Canada and Russia, which have surplus oil and diesel, as well as nations that rely on diesel imports in addition to domestic refining, such as Brazil, Indonesia and the EU. Many of these countries produce sizeable volumes of biofuels, giving them some buffer when diesel supplies tighten.”

“Brazil, the fifth-largest diesel user in the world, refines large volumes of crude oil into diesel, but is still the world’s fourth-largest importer of diesel,” Mr Vogel said. “Brazil’s biodiesel production can meet about 15% of the country’s diesel needs and is equivalent to 85% of the diesel volumes it imports every year. In addition, the country produces 34 billion litres of ethanol from sugarcane and corn, equivalent to 75% of Brazil’s gasoline use. The Brazilian biofuel industry contributes substantially to the country’s fuel security and is a key buyer of farm products such as soybean oil, sugar cane and corn.”

The Rabobank analyst said the EU produces approximately 16 million tonnes of biodiesel per year, allowing it to supply 6% of its total diesel use and almost 10% of its transport diesel fuel use. “The EU imports only about 9% of its diesel needs from global markets, and the region’s large biodiesel production reduces its exposure to global diesel supply shocks.”

“The US is scaling up its renewable diesel production and, at 17 million tonnes, can supply 8% of its diesel needs,” Mr Vogel said. “This comes on top of a massive corn ethanol production of 62 billion litres per year, equivalent to 12% of US gasoline use. Biofuels are a key demand driver for farm products like corn and soybean oil in the US.”

Argentina’s already-installed biodiesel production capacity would be able to supply over a quarter of local diesel needs, he said.

Mr Vogel said Indonesia will likely produce 15 million tonnes of biodiesel in 2026, largely from local palm oil, allowing it to use more biodiesel than crude oil-based diesel in its transport sector.

“At a much smaller production scale, Singapore can supply more than 50% of its diesel needs from biofuels and Malaysia, Thailand and Canada nearly 15%, 10% and 5% of theirs respectively,” he said.

Mr Vogel saod biofuels can strengthen fuel security by reducing exposure to global diesel supply shocks. “For Australia, the comparison highlights both a vulnerability in diesel self-sufficiency and a potential market opportunity for farmers, especially where locally-produced crops and livestock by-products could be used to support domestic biofuel production.”

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