Investment Institute

Biofuels and the energy transition: Green sprouts or biowashing?

  • 21 Septiembre 2023 (10 min read)

Key points:

  • Biofuels come from biomass, and as such contain biogenic CO₂, while fossil fuels contain fossil CO₂
  • As a result, burning biofuels does not increase the concentration of CO₂ in the atmosphere, which is why biofuels are deemed relevant to help decarbonise our economies
  • However, ‘bio’ does not equal ‘sustainable’, because sourcing biomass and turning it into biofuels can have significant harmful impacts
  • A careful and comprehensive lifecycle analysis is needed to assess the merits of any biofuel or biofuel project
  • Two areas must be especially scrutinised: Is there competition with the food chain? And is there damage to the land and to local communities?
  • We believe biofuels can be a good solution in the energy transition, but that sustainable jet fuel and biomethane have better credentials than bioethanol and biodiesel
  • We suggest sustainably-minded investors could invest in this space, but selectively and after careful due diligence
Read the full article
Download report (729.83 KB)

Related Articles


COP28: Limited expectations met with some progress on climate finance

  • by Virginie Derue
  • 19 Diciembre 2023 (7 min read)

COP28: What can investors reasonably expect?

  • by Virginie Derue
  • 19 Octubre 2023 (7 min read)

Why living wages should be considered a driver of human capital value, not a cost

  • by Matthieu Firmian
  • 06 Septiembre 2023 (7 min read)


    This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities.

    Due to its simplification, this document is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this document is provided based on our state of knowledge at the time of creation of this document. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.

    Issued in the UK by AXA Investment Managers UK Limited, which is authorised and regulated by the Financial Conduct Authority in the UK. Registered in England and Wales, No: 01431068. Registered Office: 22 Bishopsgate, London, EC2N 4BQ.

    In other jurisdictions, this document is issued by AXA Investment Managers SA’s affiliates in those countries.

    © 2023 AXA Investment Managers. All rights reserved

    Image source: Getty Images UK.