There is no hard cap because you can always grow and burn ethanol. Brazil does it at scale.
Which leads to deforestation, the depletion of ground water supplies and still produces CO2 on both then front end and back end. Renewables aren't interesting just because they are renewable. We're not going to run out of fossils today so burning something else instead makes no sense. Especially when it becomes a form of geewnwashing to cover for a lack of progress in wind and solar.
As far as the hard cap you mentioned, I think there's no danger of us hitting that cap in the next decade or so. Later on, maybe. Battery technology is also improving rapidly, so perhaps it will never be a true limiting factor.