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

Market Overview

Global Biodiesel market was valued at USD 42.82 Billion in 2024 and is expected to reach USD 75.37 Billion by 2030 with a CAGR of 9.88%. The global biodiesel market is witnessing significant expansion, underpinned by rising demand for renewable energy solutions, sustainability imperatives, and regulatory pressure to curb greenhouse gas (GHG) emissions. Biodiesel produced from feedstocks such as vegetable oils, animal fats, and waste cooking oils offers a practical, low-carbon alternative to conventional diesel across transportation, industrial, and power generation sectors.

Positioned at the nexus of energy transition, technological innovation, and policy support, the biodiesel market is rapidly evolving. Accelerated adoption in commercial fleets, industrial applications, and power systems, combined with advancements in feedstock diversification and production efficiency, is driving robust growth and creating high-potential avenues for strategic investment globally.

Key Market Drivers

Rising Demand for Renewable and Sustainable Energy

The global push toward renewable and sustainable energy sources is a central driver of growth in the biodiesel market. Between 2022 and 2023, European imports of Russian pipeline gas declined by nearly 120 billion cubic meters, precipitating a global energy crisis. This disruption led to sharp increases in gas and electricity prices, intensified inflationary pressures, and exacerbated geopolitical uncertainties across the region. As governments, industries, and consumers increasingly prioritize low-carbon and environmentally friendly alternatives, biodiesel has emerged as a key solution to meet these energy transition objectives. The global energy landscape is under pressure to reduce carbon emissions and mitigate climate change. Biodiesel, produced from renewable feedstocks such as vegetable oils, waste oils, and animal fats, offers a carbon-neutral alternative to fossil diesel. It significantly lowers greenhouse gas (GHG) emissions, particulate matter, and other pollutants when used in transportation and industrial applications. This environmental advantage aligns directly with global sustainability goals, driving higher adoption rates of biodiesel in energy consumption.

Rising demand for renewable energy also stems from the need for energy security. Countries dependent on imported crude oil face price volatility and supply risks. Biodiesel production from domestically available feedstocks provides an alternative, locally sourced energy solution. This diversification reduces reliance on fossil fuels, enhances energy independence, and strengthens national energy resilience, creating favorable conditions for market expansion. There is a growing awareness among consumers and businesses regarding the environmental impact of conventional fuels. Corporations are increasingly committing to Environmental, Social, and Governance (ESG) objectives, including reducing their carbon footprint. This trend boosts the demand for biodiesel in commercial fleets, public transportation, and industrial operations, as it offers a practical way to transition toward sustainable energy without significant infrastructural changes. The rising demand for sustainable energy is further reinforced by supportive policies and incentives. Governments worldwide are introducing renewable energy mandates, blending requirements, and subsidies for biofuels. These policies not only promote the adoption of biodiesel but also create a favorable investment climate for producers, enabling market expansion in alignment with the global energy transition.

Growing Demand in Transportation and Industrial Sectors

The expanding use of biodiesel in transportation and industrial applications is a major factor driving the growth of the global biodiesel market. According to a life cycle analysis conducted by Argonne National Laboratory, the use of B100 biodiesel reduces carbon dioxide emissions by approximately 74% compared with conventional petroleum diesel. Rising fuel demand in these sectors, coupled with increasing regulatory pressures to reduce greenhouse gas (GHG) emissions, has created a strong and sustainable market environment for biodiesel. The transportation sector represents the largest end-use segment for biodiesel. Global consumption of biojet fuel is projected to increase by nearly 5 billion litres, accounting for close to 1% of total jet fuel demand by 2028. The forecast has been revised upward by 20% under the baseline scenario and 40% under the accelerated scenario, reflecting recent policy commitments and a strong pipeline of ongoing and planned projects. Commercial fleets, public buses, heavy-duty trucks, and passenger vehicles are increasingly adopting biodiesel blends (B5, B20, B100) to comply with emission reduction mandates and sustainability targets. Governments across the globe have introduced blending regulations and tax incentives to encourage biodiesel use in transportation, especially in regions like Europe, North America, and parts of Asia-Pacific. The growing demand for cleaner fuels in urban and intercity transport, coupled with the rise in logistics and e-commerce activities, further fuels biodiesel consumption in the transportation segment.

Industries, including power generation, manufacturing, and marine operations, are also contributing to biodiesel demand. Industrial applications often require high-performance, reliable fuels, and biodiesel provides a renewable alternative that meets operational and environmental standards. Many industrial players are adopting biodiesel to comply with corporate sustainability initiatives and reduce carbon footprints, particularly in regions with stringent emission regulations. Biodiesel offers economic benefits alongside environmental advantages. It is compatible with existing diesel engines and fuel infrastructure, minimizing the need for costly modifications. Its ability to blend with conventional diesel in various proportions allows for gradual integration into transportation and industrial operations, making adoption economically viable. Additionally, financial incentives, carbon credits, and subsidies for biodiesel usage enhance its attractiveness to commercial and industrial users. Government mandates promoting renewable fuels in transportation and industrial sectors significantly drive biodiesel consumption. Policies such as the European Union’s Renewable Energy Directive (RED II), the U.S. Renewable Fuel Standard (RFS), and similar regional initiatives incentivize biodiesel production and use. Compliance with emission standards encourages fleet operators and industrial enterprises to transition toward biodiesel, ensuring a stable and growing market demand.

Download Free Sample Report

Key Market Challenges

Feedstock Availability and Price Volatility

The availability and cost of feedstocks, such as vegetable oils, waste oils, and animal fats, pose significant challenges for biodiesel producers. Many feedstocks are also used in the food and feed industries, leading to competition that can drive up prices and create supply uncertainties. For instance, fluctuations in palm oil, soybean oil, and rapeseed oil prices directly affect production costs, potentially reducing profit margins for biodiesel manufacturers. Moreover, reliance on seasonal crops can cause supply instability, particularly in regions prone to adverse weather conditions, affecting consistent biodiesel production and market growth.

Higher Production Costs Compared to Conventional Diesel

Biodiesel production typically incurs higher costs than petroleum-based diesel, especially in regions lacking subsidies or incentives. Production processes, including transesterification and feedstock refining, require significant investment in technology, energy, and skilled labor. Although government incentives and blending mandates partially offset these costs, price sensitivity among end-users can limit market adoption. In regions where fossil fuel prices are low, biodiesel struggles to compete economically, restraining its penetration and growth.

Key Market Trends

Shift Toward Second- and Third-Generation Feedstocks

A notable trend in the biodiesel market is the move toward advanced feedstocks, including non-edible oils, algae, and waste biomass. Unlike traditional vegetable oils, these second- and third-generation feedstocks do not compete with food crops and offer higher sustainability credentials. Algae-based biodiesel, for instance, boasts high yield per hectare and can be cultivated on non-arable land, reducing pressure on agricultural resources. This trend reflects the industry’s focus on environmental sustainability, scalability, and long-term feedstock security, positioning biodiesel as a future-ready renewable fuel.

Integration of Digital and Smart Technologies in Production and Supply Chains

The adoption of digitalization and smart technologies is transforming biodiesel manufacturing and distribution. Advanced monitoring systems, artificial intelligence (AI)-driven process optimization, and predictive analytics enable producers to enhance yield, reduce waste, and optimize energy consumption. In supply chains, blockchain and IoT technologies improve traceability and transparency, ensuring compliance with sustainability standards and regulatory mandates. This trend not only enhances operational efficiency but also strengthens market credibility, particularly among environmentally conscious consumers and corporate buyers.

Segmental Insights

Feedstock Insights

Based on the category of Feedstock, the vegetable oils segment emerged as the fastest growing in the market for Biodiesel in 2024. Vegetable oils including soybean, palm, rapeseed, sunflower, and canola oils offer a highly versatile and efficient raw material base for biodiesel production, making them increasingly attractive to producers worldwide.

A primary driver of growth is the consistent availability of vegetable oils from both established and emerging agricultural economies. Crops such as soybean in North and South America, rapeseed in Europe, and palm oil in Southeast Asia provide large-scale, renewable feedstock supplies. This availability ensures a steady and predictable input for biodiesel production, reducing supply chain risks and enabling economies of scale, which in turn lowers production costs and improves profit margins for biodiesel manufacturers.

Regulatory frameworks in key markets further accelerate adoption. Many governments and regional bodies incentivize the use of food and non-food vegetable oils for renewable fuel production through subsidies, blending mandates, and tax benefits. Such policies make vegetable oil-based biodiesel economically attractive compared to other feedstocks, stimulating investment in processing facilities and distribution networks. These factors contribute to the growth of this segment.

Download Free Sample Report

Regional Insights

Europe emerged as the largest market in the global Biodiesel market in 2024, holding the largest market share in terms of Value & Volume. Central to this dominance is the region’s proactive policy framework, which emphasizes sustainability and renewable energy adoption. The European Union (EU) has implemented stringent mandates such as the Renewable Energy Directive (RED II), which sets binding targets for renewable energy consumption in the transport sector. These mandates create a strong and predictable demand for biodiesel, encouraging large-scale production and investment across member states.

Another key driver is Europe’s commitment to reducing greenhouse gas (GHG) emissions. Many European countries have introduced tax incentives, subsidies, and blending mandates to promote biodiesel over conventional fossil fuels. These measures not only support domestic biodiesel producers but also attract international companies to establish production and distribution networks within the region, further consolidating Europe’s market leadership.

Technological advancements also play a significant role. European biodiesel producers have heavily invested in next-generation biodiesel technologies, including feedstock diversification, advanced enzymatic and catalytic processes, and waste-to-biodiesel conversion. This has enhanced production efficiency, reduced costs, and increased the sustainability profile of European biodiesel products, giving the region a competitive edge globally.

Additionally, Europe’s well-established infrastructure for biofuel distribution, including blending facilities, storage terminals, and logistics networks, ensures consistent supply to meet the rising demand from the transportation and industrial sectors. The region’s focus on research and development, coupled with collaborations between governments, research institutes, and private enterprises, further strengthens its market position.

Recent Developments

• In August 2025, Ontario’s Policy to Boost Local Biodiesel Content Aims to Strengthen Domestic Industry. The provincial government’s initiative to increase the Ontario-made component in biodiesel is expected to revitalize the domestic sector, enhance production capacity, and safeguard Canadian employment within the renewable fuels industry.
• In August 2025, Indonesia has reaffirmed its plan to increase the mandatory palm oil content in biodiesel to 50% under the B50 program, set to take effect next year. However, according to a senior official from the Ministry of Energy, the initiative is unlikely to commence in January, reflecting ongoing operational and logistical preparations ahead of the nationwide rollout.
• In February 2025, Aemetis Inc. announced that its Universal Biofuels facility in India has received clearance from the local Pollution Control Board (PCB) to recommence production of biodiesel and refined glycerin. This approval follows the resolution of a prior notice from local authorities, enabling the plant to resume commercial operations and strengthen Aemetis’ position in the Indian renewable fuels market.
• In November 2024, Researchers at UC Santa Cruz have developed a novel approach to produce biodiesel from waste oil, streamlining the process and requiring only moderate heating. This innovation has the potential to make biodiesel a more cost-effective and scalable alternative fuel, particularly for large industrial sectors that form the backbone of the national economy, enhancing both sustainability and operational efficiency.
• In June 2024, A team of scientists, including researchers from Assam, has developed a superhydrophobic catalyst capable of dramatically lowering biodiesel production costs. The technology has the potential to reduce current production expenses from approximately $1.20 per litre to just $0.37 per litre, offering a transformative opportunity for more economical and scalable biodiesel production in global markets.

Key Market Players

• 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

Report Scope:

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

• Biodiesel Market, By Feedstock:

o   Vegetable Oil

o   Animal Fats

• Biodiesel Market, By Application:

o   Fuel

o   Power Generation

o   Others

• Biodiesel 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

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Biodiesel Market.

Available Customizations:

Global Biodiesel market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).