Co-Refining Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented, By Technology (Hydrotreating, Hydrocracking, Distillation), By Feedstock Type (Crude Oil, Vegetable Oils, Waste Oils, Plastic Waste), By End-User Industry (Petroleum Refining, Biodiesel Production, Chemical Manufacturing), By Process Type (Batch Processing, Continuous Processing), By Region, By Competition, 2020-2030F

Market Overview

Global Co-Refining Market was valued at USD 20.64 Billion in 2024 and is expected to reach USD 25.67 Billion by 2030 with a CAGR of 3.55%. The Co-Refining Market refers to the industry segment focused on the integrated processing of renewable feedstocks, such as bio-oils, used cooking oils, animal fats, and other biomass-derived materials, alongside conventional petroleum-based feedstocks within existing refinery infrastructure. This innovative approach enables the production of renewable fuels, including renewable diesel, sustainable aviation fuel (SAF), and bio-naphtha, without the need for building entirely new facilities, thereby optimizing capital investment and reducing the carbon intensity of fuel production.

Co-refining is emerging as a strategic solution for energy companies seeking to decarbonize operations, meet increasingly stringent emissions regulations, and align with global climate targets while maintaining operational efficiency and fuel quality standards. The process typically involves hydroprocessing, fluid catalytic cracking, or other refinery configurations that allow for the seamless integration of bio-based and fossil inputs, with minimal modifications to existing systems. This flexibility has made co-refining an attractive option for both large-scale petroleum refiners and renewable energy stakeholders, enabling them to scale up renewable fuel production without compromising refinery economics or product performance.

Key Market Drivers

Rising Demand for Low-Carbon Fuels Across Transportation and Industrial Sectors

The global push toward decarbonization and sustainable energy consumption is significantly driving the demand for low-carbon fuels, positioning co-refining as a highly attractive solution for both refiners and fuel consumers. As governments and regulatory agencies tighten emissions standards across aviation, marine, road transport, and industrial operations, there is increasing pressure to substitute conventional fossil fuels with cleaner alternatives.

Co-refining allows petroleum refineries to integrate renewable feedstocks—such as used cooking oil, animal fats, and algae oil—into their existing infrastructure to produce drop-in fuels that are chemically indistinguishable from conventional fuels but with a significantly lower carbon footprint. This ability to leverage existing refining assets without the need for building entirely new biorefineries offers a cost-effective and scalable approach to meet clean fuel demand.

Sectors like aviation, which face limited electrification opportunities, are especially reliant on sustainable aviation fuel (SAF) that can be efficiently produced via co-processing methods. Similarly, heavy-duty transportation and shipping industries are exploring renewable diesel and marine biofuels that comply with international decarbonization mandates. The increased uptake of carbon intensity reduction programs, renewable fuel standards, and voluntary corporate sustainability goals is further boosting market momentum.

Co-refining also supports energy security by diversifying the feedstock base while making use of regional biomass availability, which helps in reducing dependency on imported crude oil. The growing global emphasis on life-cycle GHG emissions reductions is making co-refined fuels a central component in long-term fuel mix strategies. As consumers and industries transition toward greener alternatives, the ability of co-refining to deliver low-carbon fuels at scale without disrupting existing fuel supply chains provides a strong and sustainable growth opportunity for refiners and technology providers alike. Global demand for low-carbon fuels is expected to grow at a CAGR of over 10% through 2035. Over 80 countries have set targets to increase the share of low-carbon fuels in their national energy mix. Biofuels and synthetic fuels are projected to displace over 15 million barrels of oil equivalent per day by 2040. Industrial adoption of low-carbon fuels is expected to reduce global CO₂ emissions by over 1 gigaton annually by 2050. Investment in low-carbon fuel infrastructure is projected to exceed $500 billion globally by 2040.

Increasing Investments in Renewable Feedstock Supply Chains and Infrastructure

One of the major drivers accelerating growth in the co-refining market is the rapid development and expansion of renewable feedstock supply chains, coupled with strategic investments in infrastructure tailored to bio-feedstock processing. Governments, private equity firms, and oil majors are increasingly channeling capital toward the sourcing, collection, and pre-treatment of feedstocks such as used cooking oil, tallow, palm fatty acid distillates (PFAD), and other agricultural residues. This expansion in feedstock availability is critical to ensuring the consistent and large-scale operation of co-refining units.

Traditional refineries are also investing in front-end modifications and technology upgrades to handle these alternative feedstocks, which vary in composition and quality compared to fossil crude. Technological innovations in hydroprocessing, pre-treatment, and catalyst optimization have enhanced the feasibility of co-processing bio-oils alongside conventional feedstocks, improving yields while maintaining fuel specifications. As the economics of feedstock supply chains improve through consolidation and logistical efficiencies, the co-refining process becomes more commercially viable and appealing to refiners looking to increase their renewable fuel output without full-scale retrofitting or greenfield investment.

Moreover, collaborative partnerships among refiners, agricultural producers, and waste management companies are forming integrated supply networks that ensure long-term feedstock sustainability. Many countries are offering subsidies and incentives for infrastructure upgrades, pre-treatment facilities, and transport logistics for bio-feedstocks, further supporting market expansion.

The reduction in operational risks associated with feedstock supply volatility, combined with declining costs of processing technologies, positions co-refining as a strategic choice for long-term refinery decarbonization. As renewable feedstock supply chains become more sophisticated and geographically diversified, refiners gain the flexibility and resilience needed to scale up low-carbon fuel production effectively through co-processing pathways. Global investment in renewable feedstock supply chains is projected to exceed $200 billion by 2030. Over 100 new bio-refineries and renewable fuel plants are planned or under construction worldwide. Renewable diesel and sustainable aviation fuel (SAF) production capacity is expected to grow by over 400% globally by 2030. More than 60 countries have implemented policies supporting renewable feedstock development and infrastructure expansion. Global trade of renewable feedstocks is forecasted to grow at a CAGR of over 8% through 2030. Private sector funding in renewable feedstock logistics and storage infrastructure has doubled over the past five years.

Favorable Regulatory Environment and Government Incentives Supporting Renewable Fuel Integration

The global regulatory environment is increasingly favorable toward the integration of renewable fuels into mainstream energy systems, significantly driving the co-refining market. Governments worldwide are introducing mandates, blending quotas, and tax incentives aimed at reducing greenhouse gas emissions and promoting cleaner fuel alternatives. Co-refining offers a practical pathway to meet these regulatory requirements without requiring refiners to overhaul existing infrastructure. In regions such as North America, Europe, and parts of Asia-Pacific, regulatory frameworks support co-processing through mechanisms like renewable fuel credits, low-carbon fuel standards, and direct capital subsidies for infrastructure retrofitting.

These policies lower the financial barriers to entry and de-risk investments in co-refining projects. Additionally, national and regional targets for biofuel blending in transportation fuels are pushing refiners to expand their renewable fuel output, making co-refining a compliant and cost-effective strategy. The ability to generate regulatory credits and monetize carbon savings provides a strong economic incentive for refiners to adopt co-refining solutions.

Governments are also funding R&D initiatives focused on improving co-refining efficiency, feedstock flexibility, and emissions performance, further accelerating technology adoption. Moreover, co-refined fuels are often recognized under various sustainability certification schemes, allowing producers to tap into international markets where certified low-carbon fuels are in high demand.

The inclusion of co-refining pathways in policy roadmaps and climate action plans underscores its strategic importance in achieving national and global decarbonization goals. As climate policies evolve and carbon pricing mechanisms tighten, refiners that invest in co-refining capabilities stand to gain a competitive advantage both economically and environmentally. The convergence of supportive regulation, financial incentives, and market access opportunities makes the current policy landscape highly conducive to the rapid growth of the co-refining market.

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Key Market Challenges

Feedstock Availability and Supply Chain Complexity

One of the primary challenges facing the co-refining market is the inconsistent and limited availability of suitable renewable feedstocks, which directly impacts the scalability and reliability of co-refining operations. Unlike conventional crude oil, which benefits from well-established, globalized supply chains and storage infrastructure, renewable feedstocks such as used cooking oil, animal fats, tall oil, and various non-edible vegetable oils often come from fragmented, localized, and highly variable sources. These feedstocks are often seasonally available and influenced by agricultural output, regional policies, and competing demand from other sectors like biodiesel or oleochemicals.

This inconsistent supply adds complexity to procurement, transportation, and storage logistics, increasing operational risk for refiners who aim to integrate co-processing into their existing operations. Additionally, contamination risks, quality variability, and the need for pretreatment further complicate the feedstock supply chain, often requiring investment in new processing units or pretreatment facilities. For refiners, maintaining consistent operational efficiency becomes difficult when input materials fluctuate in composition and volume, ultimately leading to suboptimal co-refining yields. The lack of a harmonized global certification and traceability system for renewable feedstocks also presents challenges related to sustainability verification and regulatory compliance, particularly in regions with strict greenhouse gas accounting rules.

Moreover, competition for high-quality feedstocks is intensifying as more countries and corporations adopt low-carbon fuel targets, driving up prices and limiting access to reliable supply, especially for smaller or emerging market players. The logistics around transporting perishable or sensitive bio-feedstocks further strain infrastructure, especially in regions lacking established supply networks or adequate cold-chain facilities. In rural and emerging economies, where the majority of agricultural feedstock is sourced, transportation infrastructure may be inadequate to support industrial-scale co-refining needs.

 As global demand for renewable fuels increases, the gap between feedstock supply and required input volumes is expected to widen unless new, sustainable, and scalable feedstock sources—such as algae, municipal waste, or lignocellulosic biomass—are commercialized. However, these next-generation feedstocks are still in early stages of development and face technological, regulatory, and economic barriers to widespread adoption. Overall, the challenge of feedstock availability and supply chain complexity poses a significant bottleneck to the growth and long-term viability of the co-refining market, necessitating coordinated investment, policy support, and innovation in feedstock diversification and logistics infrastructure.

Technical and Operational Integration with Existing Refineries

Another significant challenge in the co-refining market lies in the technical and operational complexities of integrating renewable feedstocks into existing petroleum refinery infrastructure. Traditional refineries are optimized for processing fossil-based crude oil, and introducing renewable materials like bio-oils, used cooking oil, or animal fats into these systems introduces several complications. Bio-based feedstocks possess different chemical and physical properties than crude oil—they typically have higher oxygen content, contain impurities like metals and sulfur, and often have varying molecular compositions depending on the source.

These characteristics can lead to corrosion, catalyst deactivation, and fouling in refinery equipment not designed to handle such variability, which compromises operational efficiency and increases maintenance costs. Furthermore, integrating bio-feedstocks into catalytic crackers or hydrotreaters requires modifications in temperature, pressure, and feed ratios, which in turn demand capital investments in pretreatment units, feed blending systems, and emissions control equipment. Many existing refineries lack the technological flexibility to adapt quickly to such changes without affecting throughput or product yield, particularly in units operating near maximum capacity.

Also, the co-processing of bio-oils can lead to the production of oxygenated compounds and additional water, which impacts downstream separation units and product quality. Ensuring consistent product specifications, such as sulfur content or cetane number, becomes more challenging when bio-feedstocks are involved, potentially affecting compliance with fuel standards and regulatory limits. From an operational standpoint, there are also challenges in balancing the economics of co-refining, as renewable feedstocks are often more expensive and less energy-dense than crude oil, affecting refinery margins.

Managing dual feedstock logistics, storage, and blending protocols further complicates refinery operations, requiring new control systems and staff training. Additionally, refineries pursuing co-refining strategies must invest in rigorous testing and analysis frameworks to validate performance and emissions compliance, adding both time and cost to implementation. Regulatory uncertainty around the classification of co-refined fuels—whether they qualify as renewable, how credits are awarded under carbon trading schemes, and how emissions are calculated—adds an additional layer of complexity that deters investment.

Many refiners are also cautious about large-scale co-refining adoption due to the long-term commitment and financial risk involved, particularly in the absence of clear market incentives or stable policy frameworks. In sum, the technical and operational integration of co-refining within traditional refinery settings is a complex, capital-intensive, and often risk-laden process that poses a major challenge to scaling the co-refining market. Addressing this will require targeted investment in adaptable refining technologies, policy support for risk-sharing, and cross-industry collaboration to establish best practices and shared standards for efficient, safe, and economically viable co-processing.

Key Market Trends

Increasing Integration of Bio-Based Feedstocks into Existing Refinery Infrastructure

The Co-Refining Market is witnessing a transformative trend driven by the increasing integration of bio-based feedstocks, such as used cooking oil, animal fats, and vegetable oils, into existing petroleum refinery infrastructure. This shift is fueled by global efforts to decarbonize the energy sector without incurring the massive capital expenditures associated with constructing entirely new biorefineries. Oil refiners are recognizing the value of leveraging their existing assets—processing units, pipelines, and distribution systems—to accommodate renewable feedstocks while maintaining the operational efficiencies of large-scale facilities.

Co-processing enables refiners to incrementally transition toward sustainable fuel production by blending biogenic materials with fossil-based streams during hydroprocessing, fluid catalytic cracking, or thermal conversion processes. This strategy not only reduces greenhouse gas emissions from transportation fuels but also ensures product consistency, as renewable fuels produced via co-refining are chemically indistinguishable from their petroleum-based counterparts and require no changes to vehicle engines or fuel distribution infrastructure. The trend also aligns with tightening regulatory mandates and carbon reduction targets set by various governments, which are incentivizing refiners to incorporate renewable content into fuel streams. Moreover, as supply chains for sustainable feedstocks mature and global availability increases, refiners have greater flexibility in sourcing cost-effective bio-oils and fats.

The rising cost of carbon credits and the emergence of low-carbon fuel standards in regions such as North America, Europe, and Asia-Pacific are further motivating refiners to scale up co-refining operations. Additionally, advancements in catalyst technology and process engineering are helping to overcome previous limitations in feedstock variability, operational stability, and equipment corrosion. These technological improvements are enhancing the viability of high-throughput co-processing operations that meet fuel quality standards without disrupting core refinery functions.

As traditional fossil fuel demand begins to plateau and refineries seek new revenue streams in a low-carbon economy, co-refining emerges as a strategic approach to future-proof operations and remain competitive in an evolving energy landscape. This trend reflects a pragmatic pathway for refineries to bridge the gap between today’s fossil-dependent fuel systems and tomorrow’s renewable energy mix, with minimal disruption and maximum capital efficiency.

Government Policies and Carbon Regulations Accelerating Co-Refining Adoption

A major trend shaping the Co-Refining Market is the growing influence of government policies, carbon pricing mechanisms, and renewable energy mandates that are accelerating the adoption of co-refining technologies globally. Policymakers are increasingly leveraging regulatory instruments such as low-carbon fuel standards (LCFS), renewable fuel obligations, and tax credits to push refiners toward integrating renewable feedstocks into their production processes. These measures are intended to reduce carbon emissions from the transportation sector, which remains one of the highest contributors to global greenhouse gas output. Co-refining presents a unique opportunity for refiners to meet these regulatory requirements without a complete overhaul of their refining systems, offering a cost-effective and scalable solution.

In regions like North America and the European Union, carbon intensity scoring systems are now used to quantify and reward the use of low-carbon fuels, directly benefitting refiners that engage in co-processing renewable oils. These incentives are complemented by penalties and carbon taxes on emissions-heavy operations, further tipping the economic balance in favor of co-refining. Developing countries in Asia and Latin America are also following suit by implementing biofuel blending mandates, creating a regulatory pull that aligns closely with energy security and rural development goals. In addition, international climate agreements and national net-zero commitments are translating into firm deadlines and sector-specific targets for reducing fossil fuel dependency, prompting oil majors to diversify into renewable refining pathways.

Co-refining thus becomes a critical component of corporate ESG strategies, enabling companies to report lower Scope 1 and Scope 3 emissions while continuing to supply conventional fuels. Furthermore, public-private partnerships, funding programs, and research grants are being channeled into co-refining initiatives to drive innovation and de-risk early-stage investments. As carbon markets expand and clean fuel certification systems mature, refiners are positioned to generate new revenue streams through credit trading and carbon offset sales. The increasing alignment between policy frameworks and technological readiness is making co-refining not just an environmental imperative but also a commercial opportunity. This policy-driven momentum is expected to remain a dominant force over the next decade, fundamentally reshaping the economics and operational strategies of the global refining industry.

Advancements in Catalyst and Process Technologies Enhancing Feedstock Flexibility

Another significant trend driving the Co-Refining Market is the rapid advancement in catalyst and process technologies, which are improving feedstock flexibility, operational efficiency, and overall process performance. Historically, one of the primary limitations of co-refining was the challenge of processing highly variable bio-based feedstocks within petroleum refining systems that were originally designed for homogenous fossil-based inputs.

Variability in oxygen content, acidity, and impurities in renewable oils led to equipment corrosion, catalyst deactivation, and operational inefficiencies. However, recent breakthroughs in catalyst formulation—particularly in hydroprocessing catalysts and fluid catalytic cracking (FCC) additives—have enabled refiners to better tolerate a broader spectrum of bio-feedstocks, including high free fatty acid (FFA) materials and waste oils.

These next-generation catalysts offer enhanced resistance to poisoning, increased selectivity, and extended life cycles, making them more suitable for co-processing operations. Process technology providers are also introducing modular and adaptable refining configurations that integrate seamlessly into existing refinery setups, requiring minimal retrofitting and capital investment.

New process control systems equipped with advanced monitoring, automation, and predictive analytics capabilities are further optimizing operational parameters to ensure consistent output quality, even when feedstock compositions vary. Moreover, the development of pre-treatment technologies, such as esterification, hydrotreating, and decarboxylation, has improved the compatibility of bio-oils with conventional refinery units by reducing impurities and stabilizing input streams.

These technological advancements are not only enhancing operational reliability but also lowering the overall cost of co-refining, making it more economically viable for a broader range of refineries. As feedstock supply chains evolve to include more diverse and sustainable sources—ranging from municipal waste to algae-based oils—process adaptability becomes a key competitive differentiator. Companies that invest in flexible co-refining technologies are better positioned to secure a stable supply of low-cost inputs and respond quickly to changing regulatory and market conditions.

In addition, collaboration between refiners, technology licensors, and research institutions is accelerating the commercialization of pilot-scale innovations and scaling them into industrial applications. This technology-driven transformation is expanding the scope of co-refining beyond early adopters, enabling wider industry participation and accelerating the transition to low-carbon fuel production on a global scale.

Segmental Insights

Technology Insights

The Hydrotreating segment held the largest Market share in 2024. The Hydrotreating segment of the Co-Refining Market is experiencing significant growth, driven by the global shift toward cleaner fuels and sustainable refining practices. Hydrotreating, which involves the catalytic treatment of renewable feedstocks such as used cooking oil, animal fats, and vegetable oils alongside conventional petroleum fractions, enables refineries to produce drop-in biofuels with lower sulfur content and improved environmental performance.

This process is gaining prominence as governments and regulatory bodies worldwide enforce stricter emissions standards and mandate the blending of renewable content in transportation fuels. The hydrotreating method is particularly attractive to existing refineries because it allows the integration of renewable feedstocks into current operations without the need for extensive modifications or the construction of entirely new facilities. This compatibility with existing infrastructure significantly reduces capital expenditure and accelerates time to market for renewable fuel production, making it a commercially viable solution. Additionally, hydrotreating delivers high yields of high-quality diesel-range hydrocarbons, which are in strong demand due to global efforts to decarbonize the transport and logistics sectors.

With increasing attention on lifecycle greenhouse gas reductions, the ability of hydrotreated co-refined fuels to lower carbon intensity while maintaining fuel compatibility is proving to be a major driver. The rising demand for sustainable aviation fuel (SAF) is also boosting interest in hydrotreating, as the process can be adapted to produce jet fuel meeting rigorous industry specifications.

Furthermore, advancements in catalyst technology and process optimization are enhancing feedstock flexibility and improving conversion efficiencies, making hydrotreating a more attractive option across a broader range of biomass inputs. Energy companies are increasingly investing in upgrading their facilities to accommodate hydrotreating units capable of processing variable renewable feedstocks, in response to both regulatory pressure and market demand.

The growing availability of low-cost, non-edible biomass feedstocks and the need to diversify crude sources are further encouraging co-processing strategies. Hydrotreating also supports circular economy goals by enabling the upcycling of waste oils and fats into high-value fuels. As major fuel producers seek to align with environmental, social, and governance (ESG) targets and carbon reduction goals, hydrotreating stands out as a practical and impactful pathway toward a low-carbon fuel portfolio. In parallel, partnerships between refiners, bio-feedstock suppliers, and technology providers are accelerating knowledge transfer and deployment of advanced co-refining solutions.

As countries ramp up their renewable fuel targets and carbon pricing mechanisms become more widespread, the economic and environmental benefits of hydrotreating are expected to further solidify its position as a key enabler of the global energy transition. Collectively, these factors are making hydrotreating an essential driver in the co-refining market, offering an efficient, scalable, and sustainable pathway to cleaner fuel production without compromising refinery economics or operational integrity.

Feedstock Type Insights

The Crude Oil segment held the largest Market share in 2024. The Co-Refining Market in the crude oil segment is gaining significant traction, primarily driven by the global energy sector's shift toward integrating renewable feedstocks into conventional refining processes without the need for major infrastructure overhauls. As the demand for cleaner fuels continues to rise amid tightening environmental regulations and decarbonization mandates, refineries are increasingly adopting co-refining technologies that allow renewable inputs such as bio-oils, waste fats, and vegetable oils to be processed alongside crude oil.

This approach offers a cost-effective and scalable solution to reduce greenhouse gas emissions while utilizing existing refinery assets, making it especially attractive to oil majors and integrated energy companies. The crude oil segment plays a pivotal role in this evolution, as it provides the baseline infrastructure for blending and processing bio-feedstocks into transportation fuels that meet regulatory standards for sulfur content and carbon intensity. With growing demand for sustainable aviation fuel (SAF), renewable diesel, and low-carbon gasoline, co-refining using crude oil as a base feedstock enables rapid market entry of renewable fuels without disrupting traditional supply chains.

Furthermore, countries with ambitious net-zero targets are promoting incentives and policy frameworks that favor the integration of renewable content into fossil-based fuels, creating a favorable regulatory landscape for co-refining operations. Oil refineries, particularly in regions like North America, Europe, and parts of Asia, are strategically upgrading units to handle varying proportions of bio-feedstocks, ensuring flexibility in feedstock selection and optimizing yield. The scalability of co-refining in crude oil operations also aligns with the global push toward energy diversification, as it allows refiners to gradually transition toward sustainability goals without compromising profitability or operational efficiency.

Additionally, the crude oil segment benefits from technological advancements in hydroprocessing, catalyst development, and pre-treatment systems, which enhance compatibility between renewable and petroleum-based feedstocks, ensuring consistent fuel quality. The growing availability of waste-based and second-generation bio-feedstocks further supports the feasibility of co-refining at a commercial scale, mitigating concerns around feedstock competition with food supply chains. As energy security and supply resilience become national priorities, co-refining presents a practical solution to reduce reliance on imported petroleum products while leveraging domestic bio-resources.

Moreover, the ability to monetize carbon credits and meet renewable blending mandates through co-refining incentivizes oil companies to invest in this hybrid model. The crude oil segment, therefore, serves as a foundational enabler in the broader adoption of co-refining, providing both the physical infrastructure and processing expertise to integrate renewable content at scale.

 As global fuel markets evolve toward lower carbon intensity and greater sustainability, the synergy between crude oil refining and bio-feedstock integration positions the co-refining model as a key driver of energy transition in the downstream sector. This convergence of economic, regulatory, and technological factors is expected to drive long-term growth in the co-refining market within the crude oil segment, offering a strategic pathway for the oil and gas industry to align with environmental objectives while maintaining operational competitiveness.

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Regional Insights

Largest Region

The North America region held the largest market share in 2024. The Co-Refining Market in the North America region is experiencing significant growth, primarily driven by the increasing focus on reducing greenhouse gas emissions and transitioning toward low-carbon fuels. With rising environmental concerns and stricter regulatory frameworks aimed at decarbonizing the transportation and energy sectors, co-refining offers a cost-effective and scalable solution by integrating renewable feedstocks such as used cooking oil, animal fats, and biomass-derived oils into existing petroleum refining infrastructure.

This approach allows refiners to produce renewable diesel, sustainable aviation fuel (SAF), and other low-carbon fuels without the need for entirely new facilities, thereby reducing capital expenditure and accelerating deployment timelines. The United States and Canada have implemented robust policy incentives, including Renewable Fuel Standards (RFS), Low Carbon Fuel Standards (LCFS), and tax credits, which are significantly enhancing the economic viability of co-refining projects. These programs not only encourage the blending of bio-based feedstocks but also provide refiners with financial benefits for generating renewable fuel credits.

In addition, growing demand for sustainable aviation fuel in the aviation sector, particularly in North America’s major airline hubs, is pushing refiners to scale up co-refining capabilities to meet both commercial and regulatory requirements. Major energy companies in the region are strategically investing in co-refining as part of their broader ESG (Environmental, Social, and Governance) and energy transition commitments. The ability to leverage existing assets—such as hydrotreaters, hydrocrackers, and desulfurization units—adds significant operational efficiency and cost competitiveness to the co-refining process, further strengthening its market appeal. Moreover, the abundance of feedstock supply in North America, including agricultural residues, forestry waste, and waste oils, ensures a stable and diversified input stream for continuous renewable fuel production.

The increasing interest from agricultural producers and waste management firms to collaborate with refineries for feedstock supply contracts is also streamlining the value chain and promoting long-term scalability. Technological advancements in feedstock pre-treatment and catalyst development are enabling higher co-processing ratios, improving product yields, and maintaining fuel quality standards, which is critical to meeting regulatory compliance and market demand. Additionally, consumer and investor pressure on oil companies to adopt more sustainable practices is driving the shift toward integrating renewable content into fossil fuel operations.

The North American refining sector, characterized by its technical sophistication and large-scale infrastructure, is well-positioned to lead the global co-refining movement. This regional momentum is further supported by federal and state-level initiatives promoting clean energy innovation, job creation in the green economy, and investment in circular fuel systems. As transportation, aviation, and industrial sectors intensify their efforts to lower carbon footprints, co-refining stands out as a practical and transitional pathway that aligns short-term operational goals with long-term sustainability targets, making it a key driver for the market's expansion in North America.

Emerging region:

South America is the emerging region in Co-Refining Market.  The Co-Refining Market in the emerging region of South America is gaining momentum, primarily driven by the growing emphasis on energy transition, the need to reduce dependency on fossil fuels, and the region’s abundant availability of renewable feedstocks. Countries such as Brazil, Argentina, and Colombia are increasingly adopting policies that promote biofuel blending and encourage the use of renewable energy sources in transportation and industrial applications. This policy shift is creating a favorable environment for co-refining, where bio-based oils such as soybean oil, animal fats, and used cooking oil can be processed alongside crude oil in conventional refineries to produce drop-in renewable fuels.

The well-established agricultural sector in South America, particularly Brazil's dominance in soybean production, provides a consistent and cost-effective supply of bio-feedstocks suitable for co-refining. As global oil majors and regional refiners look to decarbonize operations and meet stringent emissions reduction targets, co-refining emerges as a low-barrier, economically viable solution that allows for the gradual integration of renewable fuels without the need for massive infrastructure overhauls. Additionally, regional governments are introducing incentives for low-carbon fuel production, including tax benefits and investment subsidies, which are further accelerating the adoption of co-refining technologies.

The ability of co-refining to leverage existing refinery infrastructure while aligning with sustainability goals makes it particularly attractive in capital-constrained emerging markets. Furthermore, rising demand for cleaner fuels from both domestic and export markets, especially Europe and North America, is encouraging South American producers to invest in co-refining capabilities to enhance competitiveness and meet international fuel standards. The region’s strategic location and access to key maritime routes also support the export potential of renewable diesel and sustainable aviation fuel (SAF), making co-refining an essential component of future energy strategies.

The increasing participation of multinational oil and energy companies in South America, driven by the market’s potential and supportive regulatory environment, is further fueling investment in pilot and commercial-scale co-refining projects. These developments are complemented by growing technological partnerships and knowledge transfer initiatives, allowing local players to adopt global best practices and accelerate implementation. Moreover, heightened environmental awareness among consumers and pressure from global stakeholders are compelling regional fuel suppliers to diversify their portfolios toward greener alternatives.

With energy demand steadily increasing across urbanizing South American economies, co-refining offers a scalable, flexible, and lower-emission solution that balances energy security with environmental responsibility. The combination of feedstock availability, regulatory support, economic feasibility, and increasing demand for sustainable fuels positions South America as a promising emerging region for co-refining market expansion. As these drivers continue to gain traction, the region is expected to witness accelerated deployment of co-refining infrastructure, creating new growth opportunities across the renewable energy and downstream oil and gas value chains.

Recent Developments

• In June 2025, Nigeria’s Dangote Refinery, with a processing capacity of 650,000 barrels per day, successfully dispatched its first 90,000-tonne gasoline shipment to Asia through trader Mercuria. This marks a strategic milestone as the refinery expands its footprint beyond West Africa into the global energy market. The move underscores Dangote's ambition to become a key player in international refined product trade while strengthening Nigeria’s position as a regional refining hub with export capabilities.
• In April 2025, Afreximbank launched a USD 3 billion Revolving Intra-African Oil Trade Financing Program aimed at supporting intra-African trade in refined petroleum products and reducing dependency on imports. The facility will enable fuel buyers across Africa and the Caribbean to source directly from African refineries. This initiative is expected to catalyze investments in regional refining and logistics infrastructure, with the potential to increase Africa’s refining capacity by up to 1.3 million barrels per day.
• In April 2025, TotalEnergies announced plans to shut down its oldest steam cracker in Antwerp by the end of 2027 due to excess capacity in the European petrochemical market and the expiration of a major ethylene contract. Simultaneously, the company is advancing its energy transition strategy by investing in a 200 MW green hydrogen facility, of which 130 MW has been contracted to Air Liquide. This project will enable annual production of 15,000 tonnes of green hydrogen for on-site use, reinforcing TotalEnergies’ commitment to sustainable industrial transformation.
• In March 2025, China’s CNOOC initiated a USD 2.74 billion expansion of its Ningbo refinery, increasing crude processing capacity by 50%. The upgrade includes the addition of a new 120,000 barrels-per-day crude unit, bringing total capacity to 240,000 barrels per day. This investment is designed to strengthen CNOOC’s downstream operations and enhance production of key raw materials for the plastics and synthetic fiber industries, supporting both domestic demand and industrial growth.

Key Market Players

• Neste Oyj
• TotalEnergies SE
• Shell plc
• Chevron Corporation
• ExxonMobil Corporation
• Repsol S.A.
• BP p.l.c.
• ENI S.p.A.
• Valero Energy Corporation
• Preem AB

Report Scope:

In this report, the Global Co-Refining Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Co-Refining Market, By Technology:

o   Hydrotreating

o   Hydrocracking

o   Distillation  

• Co-Refining Market, By Feedstock Type:

o   Crude Oil

o   Vegetable Oils

o   Waste Oils

o   Plastic Waste  

• Co-Refining Market, By End-User Industry:

o   Petroleum Refining

o   Biodiesel Production

o   Chemical Manufacturing  

•  Co-Refining Market, By Process Type:

o   Batch Processing

o   Continuous Processing  

• Co-Refining Market, By Region:

o   North America

§  United States

§  Canada

§  Mexico

o   Europe

§  France

§  United Kingdom

§  Italy

§  Germany

§  Spain

o   Asia-Pacific

§  China

§  India

§  Japan

§  Australia

§  South Korea

o   South America

§  Brazil

§  Argentina

§  Colombia

o   Middle East & Africa

§  South Africa

§  Saudi Arabia

§  UAE

§  Kuwait

§  Turkey

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Global Co-Refining Market.

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Company Information

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