Biodiesel Market to Grow with a CAGR of 9.88% through 2030

Rising Demand for Renewable and Sustainable Energy and Growing Demand in Transportation and Industrial Sectors are expected to drive the Global Biodiesel Market growth in the forecast period, 2026-2030

According to TechSci Research report, “Biodiesel Market – Global Industry Size, Share, Trends, Competition Forecast & Opportunities, 2030F”, the Global Biodiesel Market stood at USD 42.82 Billion in 2024 and is anticipated to grow with a CAGR of 9.88% in the forecast period.

Governments across the globe are enforcing stringent regulations to reduce greenhouse gas (GHG) emissions and dependence on fossil fuels. Initiatives such as the European Union’s Renewable Energy Directive (RED II), the U.S. Renewable Fuel Standard (RFS), and similar mandates in Asia-Pacific have established structured demand for biodiesel. By setting blending requirements, emission reduction targets, and sustainability standards, these policies incentivize the adoption of biodiesel across transportation, industrial, and power generation sectors.

The market is further supported by the abundant availability of biodiesel feedstocks, including vegetable oils, waste cooking oils, and animal fats. Regions with large-scale agricultural production leverage crops such as soybean, rapeseed, sunflower, and palm oil to ensure a reliable and scalable supply. This feedstock diversity mitigates supply chain risks, enhances production efficiency, and underpins consistent market growth.

Technological advancements in biodiesel production have also strengthened market competitiveness. Innovations in enzymatic and catalytic transesterification, alongside processes converting waste and non-edible oils into high-quality biodiesel, have improved yields, reduced costs, and enhanced sustainability. These developments make biodiesel increasingly cost-competitive with conventional diesel, driving broader adoption.

Market expansion is constrained by infrastructure and compatibility challenges. Existing fuel distribution networks, storage facilities, and engines are primarily designed for petroleum diesel. While biodiesel blends can be integrated, higher concentration fuels (e.g., B100) often require engine adjustments, specialized storage, or dedicated fueling infrastructure. Cold climate conditions further complicate adoption due to biodiesel gelling unless proper additives or infrastructure upgrades are in place. These limitations particularly affect emerging markets where infrastructure investment remains insufficient, slowing seamless integration.

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The Global Biodiesel Market is segmented into feedstock, application, regional distribution, and company.

Based on the category of Application, the fuel segment emerged as the dominating segment in the market for Biodiesel in 2024. Biodiesel’s primary use as a renewable substitute for conventional diesel fuels positions it at the forefront of applications, accounting for the largest share of consumption worldwide. A key factor underpinning this dominance is the increasing demand for cleaner transportation fuels. Governments across the globe are enforcing policies and mandates that encourage the use of low-carbon and renewable fuels to reduce greenhouse gas (GHG) emissions. Initiatives such as the Renewable Energy Directive in Europe, the Renewable Fuel Standard in the U.S., and similar programs in Asia-Pacific create a structured demand for biodiesel as a direct fuel replacement in automotive, commercial, and industrial transport sectors.

Economic considerations also reinforce the fuel segment’s leading position. Biodiesel produced from commonly available feedstocks, such as vegetable oils and waste oils, offers a competitive cost profile relative to conventional diesel when factoring in subsidies, tax incentives, and carbon credits. This makes biodiesel an attractive option for fleet operators, logistics companies, and public transport authorities seeking to reduce operational costs while meeting sustainability targets. Technological compatibility further strengthens the fuel segment. Biodiesel can be blended with conventional diesel in varying proportions (B5, B20, B100), allowing seamless integration into existing engine designs and fuel distribution infrastructure without requiring significant modifications. This adaptability reduces barriers to adoption and accelerates market penetration, particularly in regions with well-developed transport and energy infrastructure.

The Asia-Pacific (APAC) region is currently the fastest-growing market in the global biodiesel sector. Rapid industrialization, urbanization, and increasing transportation fuel consumption in countries such as China, India, and Indonesia are driving higher biodiesel adoption. Many APAC governments have introduced blending mandates, subsidies, and renewable energy targets to encourage biodiesel production and consumption, creating structured demand.

 Southeast Asia has significant palm oil production, while India and China have substantial supplies of soybean and other vegetable oils, enabling scalable biodiesel production. Growing concerns over air pollution, climate change, and energy security have pushed governments and industries to adopt low-carbon fuel alternatives like biodiesel. Expanding fuel distribution networks and industrial adoption of renewable fuels are facilitating market penetration, especially for high-blend biodiesel. The combination of policy support, abundant feedstocks, rising energy demand, and sustainability initiatives positions the Asia-Pacific region as the fastest-growing market for biodiesel globally.

Major companies operating in Global Biodiesel Market are:

• Ag Processing, Inc.
• Archer Daniels Midland Company
• Bunge Global SA
• Cargill, Incorporated
• Ecodiesel Colombia S.A
• FutureFuel Corp
• Manuelita SA
• DuPont de Nemours, Inc
• Wilmar International Ltd
• Bangchak Corporation Public Company Limited

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“The global biodiesel market is poised for sustained growth, driven by rising demand for low-carbon fuels, supportive regulatory frameworks, and ongoing technological advancements in feedstock utilization and production efficiency. While challenges such as feedstock price volatility, infrastructure limitations, and production costs remain, increasing adoption across transportation, industrial, and power generation sectors underscores biodiesel’s strategic role in the global energy transition. With expanding opportunities in emerging regions, particularly Asia-Pacific, and continued investment in advanced feedstocks and high-efficiency production technologies, the market is well-positioned for long-term growth and innovation.,” said Mr. Karan Chechi, Research Director of TechSci Research, a research-based management consulting firm.

“Biodiesel Market - Global Industry Size, Share, Trends, Opportunity & Forecast, Segmented By Feedstock (Vegetable Oil {Canola Oil, Soybean Oil, Palm Oil, Corn Oil, Others}, Animal Fats {Poultry, Tallow, White Grease, Others}), By Application (Fuel {Automotive, Marine, Agriculture}, Power Generation, Others), By Region, & Competition, 2020-2030F”, has evaluated the future growth potential of Global Biodiesel Market and provides statistics & information on market size, structure and future market growth. The report intends to provide cutting-edge market intelligence and help decision makers take sound investment decisions. Besides, the report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities in Global Biodiesel Market.

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