Hydrotreated Vegetable Oil Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Feedstock (Edible Vegetable Oils, Crude Palm Oil, Used Cooking Oil, Tall Oil, Animal Fats, Others), By End User (Transportation, Agriculture, Industrial, Others), By Region and Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 14.61 Billion
CAGR (2026-2031)	4.77%
Fastest Growing Segment	Used Cooking Oil
Largest Market	Asia Pacific
Market Size (2031)	USD 19.32 Billion

Market Overview

The Global Hydrotreated Vegetable Oil Market will grow from USD 14.61 Billion in 2025 to USD 19.32 Billion by 2031 at a 4.77% CAGR. Hydrotreated Vegetable Oil (HVO) is a paraffinic renewable fuel derived from the hydroprocessing of vegetable oils and animal fats, distinguished from traditional biodiesel by its drop-in compatibility with existing diesel engines and infrastructure. The market is primarily propelled by stringent government decarbonization mandates, such as the European Union’s Renewable Energy Directive, which compel the heavy transport sector to reduce greenhouse gas emissions. Furthermore, the operational versatility of HVO, including superior cold-flow properties and storage stability, drives its adoption as a premium sustainable alternative for logistics fleets seeking immediate carbon intensity reductions.

However, market expansion faces a significant challenge regarding the limited availability and high volatility of sustainable feedstock costs, particularly as the aviation sector increasingly competes for waste oils and residues. This scarcity threatens to constrain production scalability despite rising capacity. According to the International Energy Agency, in 2025, global production capacity for renewable diesel and sustainable aviation fuel is projected to increase by 40% to reach 800,000 barrels per day.

Key Market Drivers

Decarbonization of the Heavy-Duty Transportation Sector is deeply influencing the market, serving as a primary catalyst for the adoption of hydrotreated vegetable oil (HVO). As logistics companies and industrial fleets face increasing pressure to lower carbon intensity, HVO has emerged as an essential solution due to its chemical similarity to fossil diesel, allowing for immediate use without expensive engine modifications. This shift is significantly reinforced by low-carbon fuel programs and federal incentives that encourage high-volume consumption in road transport. Highlighting the scale of this demand in a major market, according to the U.S. Energy Information Administration, December 2024, in the 'Short-Term Energy Outlook', renewable diesel consumption in the United States is forecast to average 250,000 barrels per day in 2025.

Simultaneously, the Rising Demand for Sustainable Aviation Fuel (SAF) is reshaping production dynamics and driving dual-purpose facility investments. Since SAF and HVO often utilize similar hydroprocessing technologies and feedstocks, the aviation sector's aggressive push for emission reductions is spurring producers to rapidly expand refining capacity that can flexibly output both fuels. According to the International Air Transport Association, December 2024, in its 'SAF Production Estimates' update, global SAF production volumes reached 1 million tonnes in 2024, a doubling from the previous year. To support this expanding infrastructure requirement, according to Cepsa, February 2024, the company initiated construction of a new second-generation biofuels plant in Spain with an investment of €1.2 billion.

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Key Market Challenges

The limited availability and high volatility of sustainable feedstock costs represent a critical bottleneck hampering the growth of the Global Hydrotreated Vegetable Oil Market. As producers attempt to scale operations to meet decarbonization mandates, they encounter a severe shortage of essential raw materials, particularly waste oils, animal fats, and residues. This scarcity is exacerbated by the aviation sector, which increasingly secures these same finite resources for Sustainable Aviation Fuel production. Consequently, HVO manufacturers face unpredictable operational expenses and eroding profit margins, which diminishes investor confidence and prevents the fuel from becoming a cost-competitive alternative for logistics fleets. The inability to secure reliable, affordable feedstock directly stalls production scalability, leaving capacity underutilized despite rising demand.

According to the European Biodiesel Board, in 2024, the share of waste-based feedstocks in the region's aggregated biodiesel and HVO production mix reached 55%, surpassing crop-based inputs for the first time. This statistical evidence highlights the industry's deepening dependence on residue streams that are becoming increasingly contested. As competition for these limited resources intensifies, the resulting supply chain rigidity forces prices upward, restricting the market’s ability to sustain the consistent output levels necessary for widespread global adoption.

Key Market Trends

The Emergence of Vertical Integration in Feedstock Supply Chains is gaining traction as producers seek to immunize themselves against the volatility of raw material costs. Rather than relying on third-party aggregators for waste oils and residues, market leaders are increasingly acquiring upstream collection networks to guarantee a stable input flow. This structural shift allows companies to capture margins across the entire value chain and secure scarce waste resources before they reach the open market. Illustrating this consolidation strategy, according to Biobased Diesel Daily, December 2024, the environmental commodities firm STX Group acquired the waste-based feedstock trader Marine Olie to create a fully integrated platform capable of optimizing sourcing across the Amsterdam-Rotterdam-Antwerp region.

Simultaneously, the Retrofitting of Fossil Fuel Refineries for Co-Processing Capacity represents a cost-efficient alternative to constructing greenfield facilities. By modifying existing hydrocrackers to process renewable lipids alongside petroleum distillates, oil majors can rapidly introduce lower-carbon fuels into the supply mix without abandoning legacy infrastructure. This approach leverages established logistics and minimizes capital expenditure while meeting immediate regulatory blending obligations. Highlighting the scale of this operational transition, according to BP America, May 2024, the company’s Cherry Point refinery successfully expanded its capabilities to co-process more than 7,000 barrels of renewable diesel per day by utilizing existing processing units to blend biomass-based feedstocks with conventional crude oil.

Segmental Insights

Used cooking oil is emerging as the fastest growing segment in the global hydrotreated vegetable oil market driven by strict sustainability mandates favoring feedstocks derived from waste. Unlike conventional agricultural crops this raw material does not compete with food supplies and offers superior greenhouse gas reduction. The European Union Renewable Energy Directive supports this trend by providing specific incentives for biofuels generated from waste residues. Manufacturers are therefore prioritizing used cooking oil to adhere to environmental regulations and utilize resources that mitigate concerns regarding land use change and food security.

Regional Insights

Asia Pacific stands as the leading region in the Global Hydrotreated Vegetable Oil Market, dominating the sector through its abundant feedstock availability and rapidly expanding production capabilities. The region commands a strategic advantage due to its vast supply of raw materials, particularly palm oil and used cooking oil, which attracts significant industrial investment. Additionally, burgeoning demand from the transportation sector and favorable government initiatives in major economies like China and India bolster this leadership. These factors, combined with the establishment of large-scale refineries, ensure Asia Pacific dominates the market's trajectory and global supply chain dynamics.

Recent Developments

• In June 2024, Phillips 66 announced the full conversion of its Rodeo Renewable Energy Complex in California, marking a significant achievement in its strategic shift toward renewable energy. The facility increased its production rates to approximately 50,000 barrels per day, or 800 million gallons annually, positioning it as a leading producer of renewable fuels on a global scale. The converted refinery processes feedstocks such as used cooking oil, fats, and vegetable oils to produce renewable diesel and sustainable aviation fuel. This development aligned with the company's objective to reduce its carbon footprint while meeting the rising demand for lower-carbon transportation fuels.
• In April 2024, Repsol commenced large-scale production of renewable fuels at its industrial complex in Cartagena, Spain. This facility became the first in the Iberian Peninsula dedicated exclusively to the production of 100% renewable fuels, following an investment of €250 million. The plant possesses a production capacity of 250,000 tons per year and manufactures renewable diesel and sustainable aviation fuel from organic waste such as used cooking oil. The company highlighted that these renewable fuels can be used in existing vehicles without engine modifications, providing an immediate solution for decarbonizing the transport sector including cars, trucks, and ships.
• In February 2024, Braya Renewable Fuels announced the start of commercial operations at its newly converted refinery in Newfoundland and Labrador, Canada. The facility, which was repurposed from a petroleum refinery, began producing renewable diesel with an initial daily capacity of 18,000 barrels. This milestone marked the completion of a major conversion project designed to supply low-carbon fuels to the North American market. The company also outlined plans to expand its capabilities to include the production of sustainable aviation fuel and to explore opportunities in green hydrogen, thereby reinforcing its position in the transition toward cleaner energy sources.
• In February 2024, Cepsa and Bio-Oils initiated the construction of a new second-generation biofuels plant in Huelva, Spain, through a joint venture. With an investment of €1.2 billion, the project aims to establish one of the largest renewable fuel complexes in southern Europe. The facility is designed to have an annual production capacity of 500,000 tons of renewable diesel and sustainable aviation fuel. Scheduled to commence operations in 2026, the plant will utilize agricultural waste and used cooking oil as feedstock, effectively doubling the joint venture's existing production capacity in the region and supporting the circular economy.

Key Market Players

• Eni S.p.A.
• St1 Nordic Oy
• Neste Oyj
• Valero Energy Corporation
• PT Pertamina
• Repsol SA
• TotalEnergies SE
• UPM-Kymmene Corporation
• Renewable Energy Group, Inc.
• Green Biofuels Limited

By Feedstock	By End User	By Region
Edible Vegetable Oils Crude Palm Oil Used Cooking Oil Tall Oil Animal Fats Others	Transportation Agriculture Industrial Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

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

• Hydrotreated Vegetable Oil Market, By Feedstock:

• Edible Vegetable Oils
• Crude Palm Oil
• Used Cooking Oil
• Tall Oil
• Animal Fats
• Others

• Hydrotreated Vegetable Oil Market, By End User:

• Transportation
• Agriculture
• Industrial
• Others

• Hydrotreated Vegetable Oil Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE