A recent report published by Infinium Global Research on biodiesel market provides in-depth analysis of segments and sub-segments in the global as well as regional biodiesel market. The study also highlights the impact of drivers, restraints, and macro indicators on the global and regional biodiesel market over the short term as well as long term. The report is a comprehensive presentation of trends, forecast and dollar values of global biodiesel market.
The global biodiesel market is undergoing a transformative phase, driven by climate change commitments, energy diversification goals, and the growing demand for cleaner fuels in transportation and power generation. Biodiesel, produced from vegetable oils, animal fats, and increasingly from waste and non-food feedstocks, offers a renewable and low-emission alternative to petroleum diesel. Governments worldwide are reinforcing the market through mandates and incentives such as Indonesia’s B40 blend target, Brazil’s B13 implementation, and the U.S. Renewable Fuel Standard (RFS), creating long-term demand certainty. A key trend shaping the industry is the shift toward second-generation and advanced biofuels, which alleviate concerns around food security and land use. Additionally, innovations in enzyme-based and catalytic processing technologies are helping reduce production costs and improve fuel quality. However, several challenges persist. Volatility in feedstock prices, particularly soybean and palm oil, continues to pressure producer margins. Environmental trade-offs, such as deforestation linked to palm cultivation, also raise concerns over lifecycle emissions. Furthermore, policy uncertainties such as fluctuating tariffs, changing subsidy regimes, and trade disputes pose risks to global market stability. Regionally, Europe remains the largest consumer due to stringent sustainability standards under the Renewable Energy Directive (RED II), while Asia-Pacific is the fastest-growing region, led by Indonesia, India, and China. North America, especially the U.S., is seeing growth supported by low-carbon fuel policies and investments in renewable diesel infrastructure. Between 2024 and 2032, Asia-Pacific is expected to contribute the most significant volume and capacity expansion, making it a focal point for business investment, feedstock sourcing, and strategic alliances in the biodiesel value chain.
Government regulations are the cornerstone of global biodiesel market growth, creating mandatory demand and enabling long-term investment through policy certainty and economic incentives. Programs such as the U.S. Renewable Fuel Standard (RFS) and the EU's updated Renewable Energy Directive mandate increasing renewable fuel blending, driving predictable demand. Targets such as 36 billion gallons of renewable fuel in the U.S. and 42.5% renewable energy in the EU by 2030 promote biodiesel use in transport and heating. Financial incentives, tax credits, and global mandates like Indonesia’s B20/B30 programs further enhance biodiesel’s competitiveness, supporting capacity expansion and long-term market viability. Additionally, environmental awareness and climate change mitigation are key drivers of biodiesel market growth, as consumers and corporations prioritize low-carbon solutions. Biodiesel, particularly B100, may reduce lifecycle greenhouse gas emissions by up to 74% compared to petroleum diesel, as shown by Argonne National Laboratory. With transportation responsible for 24% of global CO₂ emissions, demand for cleaner fuels is rising. These benefits align with global climate targets, making environmental consciousness a core force shaping market expansion. Surging demand in the transportation and power sectors is a key driver of biodiesel market growth, with transportation accounting for 95% of U.S. biodiesel use in 2023. Fleet operators and public transit systems are leading adopters due to sustainability mandates. Meanwhile, power generation and heating applications are emerging as high-growth segments.
Expanding technical acceptance and geographic diversification offer strategic opportunities for infrastructure investment and market positioning beyond traditional transportation uses. On the other hand, biodiesel's growth is hindered by high production costs, primarily due to the high cost of feedstocks, processing technologies, and logistical expenses. These costs account for 70%-80% of total production costs and are volatile. In contrast, fossil diesel benefits from mature infrastructure, large-scale economies, and lower commodity prices. As of 2024, biodiesel production costs range between USD 0.90 and USD 1.50 per liter, making it 20% to 60% more expensive without subsidies. Biodiesel's lower energy content also strains cost competitiveness, as higher volumes are needed to deliver the same performance. Biodiesel market performance is hindered by engine compatibility and cold weather performance issues. Biodiesel's higher cloud point compared to petroleum diesel results in gelling under cold conditions, leading to hard starts, reduced engine performance, and vehicle downtime. Blended biodiesel fuels such as B20 offer improved cold weather performance but still underperform compared to pure fossil diesel. The biodiesel market faces significant challenges due to its highly dependent feedstock supply, which is primarily vegetable oils such as palm, soybean, and rapeseed. As demand for biodiesel rises, agricultural systems face increased pressure to supply adequate feedstock. In 2024, global biodiesel production exceeded 45 billion liters, requiring over 80 million metric tons of oil feedstock. This has led to price inflation in edible oil markets, making biodiesel more expensive and reducing its competitiveness with fossil diesel.
Furthermore, the shift towards non-edible feedstocks such as algae, jatropha, and municipal solid waste oils is a key opportunity for sustainable biodiesel production. Algal biofuel is projected to account for 25% of global biodiesel production by 2030. Enzyme-based transesterification and hydro-treated vegetable oil (HVO) production are also growing, with Neste, Valero, and Eni leading the charge. Used Cooking Oil (UCO), animal fats, and industrial waste oils are also being processed into biodiesel, with Europe being the fastest-growing biodiesel segment. Additionally, the transportation sector remains the cornerstone of biodiesel consumption globally, accounting for approximately 75–78% of total biodiesel usage as of 2023. Biodiesel serves as a drop-in replacement for conventional diesel in heavy-duty trucks, buses, and light-duty vehicles, requiring minimal to no engine modification. It is also emerging in the aviation and maritime sectors, particularly in short-haul operations. Sustainable Aviation Fuel (SAF) is expected to reach a market size of USD 14 billion by 2030, with airlines such as Lufthansa, United, and Emirates piloting it. The maritime industry is also exploring biodiesel blends for shipping routes and port operations.
The Asia-Pacific region is expected to dominate the market for biodiesel during the forecast period. This growth is driven by the increasing demand for energy in emerging economies such as China, India, and others, where governments are focusing on renewable energy sources to reduce reliance on fossil fuels and enhance energy security. Additionally, supportive policies, rising environmental awareness, and growing investments in biofuel infrastructure are contributing to the rapid adoption of biodiesel in the region. Latin America is the fastest-growing region in the global biodiesel market, driven primarily by robust government policies, abundant feedstock availability, and growing export demand. Countries such as Brazil and Argentina are at the forefront, leveraging their strong agricultural sectors, particularly soybean oil and animal fats, as key inputs for biodiesel production. In addition, these countries are investing in rural development and energy independence, positioning biodiesel as a strategic alternative to imported fossil fuels.
| Report Coverage | Details |
|---|---|
| Market Size in 2023 | USD 62.68 Billion |
| Market Size by 2032 | USD 128.41 Billion |
| Growth Rate from 2024 to 2032 | CAGR of 8.38% |
| Largest Market | Asia Pacific |
| No. of Pages | 180 |
| Market Drivers |
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| Market Segmentation | By Feedstock, and By Application |
| Regional Scope | North America, Europe, Asia Pacific, and RoW |
The report on global biodiesel market provides a detailed analysis of segments in the market based on Feedstock, and Application.
· Animal Fats
· Plant-based Oils
· Others
· Transport Fuel
· Power Generation
· Industrial & Residential Heating
· Others
· ADM
· Louis Dreyfus Company
· Verbio SE
· Cargill, Incorporated
· Neste
· Eni S.p.A
· Chevron
· Bunge Global SA
· Wilmar International Limited
· Diester Industrie (Groupe Avril)
The report provides deep insights into demand forecasts, market trends, and micro and macro indicators. In addition, this report provides insights into the factors that are driving and restraining the growth in this market. Moreover, The IGR-Growth Matrix analysis given in the report brings an insight into the investment areas that existing or new market players can consider. The report provides insights into the market using analytical tools such as Porter's five forces analysis and DRO analysis of the biodiesel market. Moreover, the study highlights current market trends and provides forecasts from 2024-2032. We also have highlighted future trends in the market that will affect the demand during the forecast period. Moreover, the competitive analysis given in each regional market brings an insight into the market share of the leading players.