Global Biodiesel Market Size By Blend (B100 Pure Biodiesel, B20 20% Biodiesel, 80%), Feedstock (Vegetable Oils, Animal Fats), By Application (Fuel for Transportation, Heating), By Geographic Scope and Forecast

Biodiesel Market Size And Forecast

Biodiesel Market size was valued at USD 43.04 Billion in 2024 and is projected to reach USD 56.44 Billion by 2032, growing at a CAGR of 3.8% from 2026 to 2032.

Biodiesel is a renewable and biodegradable fuel derived from organic sources such as vegetable oils, animal fats, or recycled cooking oil. Transesterification is a chemical process that transforms oils and fats into fatty acid methyl esters (FAME), which are the chemical components that make up biodiesel.

The primary applications for biodiesel are transportation (as a greener alternative to petroleum diesel) and heating. It is frequently combined with regular diesel (B20 or B100) and used in automobiles, machines, and boilers with minimal modification.

The future of biodiesel seems positive, due to increased government mandates for cleaner fuels, more environmental consciousness, and advances in feedstock technologies. Biodiesel's function in decreasing carbon emissions and providing a sustainable energy source positions it for growth, particularly in regions.

Global Biodiesel Market Dynamics

The key market dynamics that are shaping the global biodiesel market include:

Key Market Drivers:

Government Policies and Incentives: Governments around the world are implementing policies to encourage the use of renewable energy sources, such as biodiesel. For example, the US Environmental Protection Agency (EPA) noted that the Renewable Fuel Standard (RFS) requires increased biodiesel production. The RFS aims for 2.43 billion gallons of biomass-based fuel in 2022, demonstrating the commitment to biodiesel as a vital renewable energy source.

Rising Environmental Concerns: Increasing knowledge of climate change and its consequences is driving the transition to cleaner fuels. According to an International Energy Agency (IEA) report, biofuels, including biodiesel, accounted for around 4% of worldwide transport fuel demand in 2020, with growth expected as countries work to reduce greenhouse gas emissions. The growing emphasis on decreasing carbon footprints feeds the need for biodiesel.

Increasing Fossil Fuel Prices: The volatility and rising costs of fossil fuels are driving the use of biodiesel as a cost-effective alternative. For example, the United States Energy Information Administration (EIA) reported that gasoline and diesel prices have fluctuated significantly, often topping $3 per gallon. This price volatility encourages consumers and businesses to consider biodiesel as a more reliable and sustainable alternative.

Technological Innovations: Biodiesel production technology is becoming more efficient and economically viable. The National Renewable Energy Laboratory (NREL) found that innovative strategies, such as using waste oils and fats for biodiesel synthesis, can drastically cut costs while increasing yield. This innovation expands feedstock availability and increases biodiesel's competitiveness in the energy market.

Key Challenges:

Feedstock Availability and Cost: The cost and availability of feedstock, such as vegetable oils and animal fats, have a significant impact on biodiesel prices. Fluctuations in agricultural output or competition from food production might raise prices, making biodiesel less viable.

Infrastructure and Distribution Limitations: Blending, storing, and distributing biodiesel necessitates the use of particular infrastructure. The lack of extensive infrastructure in certain places impedes biodiesel adoption, restricting its growth potential.

Engine Compatibility and Performance: While biodiesel may be used in most diesel engines, heavier mixes (such as B100) can occasionally cause operating concerns, particularly in older cars or in colder areas. This can limit widespread use, especially in areas with cold winters.

Regulatory and Policy Uncertainty: The biodiesel industry is heavily reliant on government subsidies, mandates, and environmental laws. Any changes or uncertainty in these laws might have a direct influence on production and demand, leading to market instability.

Key Trends:

Rising Demand for Renewable Energy: There is a growing global push for renewable energy sources to prevent climate change. Countries are establishing aggressive carbon neutrality targets, which is driving up the adoption of biodiesel as a sustainable alternative to fossil fuels. This trend is encouraged by a variety of government incentives and laws aimed at boosting greener fuels.

Technological Advancements: Technological advancements include enhanced transesterification techniques and new feedstock alternatives (such as algae and waste oils), which are making biodiesel production more efficient and cost-effective. These innovations help to cut manufacturing costs and increase feedstock availability, which drives market growth.

Increasing Infrastructure Investment: As the demand for biodiesel grows, considerable investments are being made in the infrastructure required for production, distribution, and blending. This includes adapting current fuel delivery networks to accept biodiesel mixes, which improves market accessibility and customer uptake.

Rising Environmental Awareness: As consumers become more conscious of environmental challenges, they prefer sustainable energy. Biodiesel's ability to cut greenhouse gas emissions and promote energy independence is gaining popularity, encouraging consumers and businesses to switch to biodiesel.

Global Biodiesel Market Regional Analysis

Here is a more detailed regional analysis of the global biodiesel market:

North America:

The biodiesel market is experiencing substantial expansion due to North America's strong regulatory framework and renewable fuel mandates. Thus, the regulatory guidance is projected to enable the region hold dominant position. According to the United States Environmental Protection Agency (EPA), the Renewable Fuel Standard program requires the use of 2.43 billion gallons of biomass-based diesel in 2024, up 6.6% from 2022. According to the US Energy Information Administration (EIA), biodiesel output in the United States will reach 1.8 billion gallons in 2024, up 12% from the previous year. Furthermore, in Canada, the Clean Fuel Regulations, which went into effect in 2022, require a 14% reduction in the carbon intensity of liquid fuels by 2032, which is expected to drive up demand for biodiesels. Natural Resources Canada reported a 25% increase in the country's biodiesel production capacity.

For instance, Walmart declared in 2024 that 45% of its truck fleet would use renewable fuels by 2025, up from 30% in 2022. According to the Canadian Renewable Fuels Association, corporate demand for biodiesel will climb by 35% in 2024, with over 200 major corporations incorporating biodiesel blends into their transportation fleets. This trend is corroborated by data from Environment and Climate Change Canada, which predict that commercial transportation will consume 40% of the country's biodiesel by 2024.

Asia Pacific:

Biodiesel usage in the Asia Pacific area is rapidly increasing as a result of aggressive government mandates and renewable energy targets. According to the International Renewable Energy Agency (IRENA), Indonesia, the world's largest biodiesel producer, successfully executed its B30 program (30% biodiesel blend) in 2020, with plans to boost it to B40 by 2025. According to the Indonesian Palm Oil Association, biodiesel usage in the country is expected to reach 10.2 million kiloliters in 2024, up 15% from 2022. Similarly, Thailand's Alternative Energy Development Plan plans to boost biodiesel usage to 8 million liters per day by 2025, up from 5.2 million liters in 2022. The Malaysian Palm Oil Board revealed that Malaysia's biodiesel production capacity increased by 25% in 2024 compared to 2021, reaching 2.9.

Furthermore, China's National Development and Reform Commission estimated a 40% rise in biodiesel production capacity by 2024, owing primarily to the increasing availability of waste cooking oil as a feedstock. The Commission predicts that China's annual waste cooking oil collection would reach 15 million tonnes by 2024, offering a sustainable feedstock supply for biodiesel manufacturing.

Global Biodiesel Market: Segmentation Analysis

The Global Biodiesel Market is segmented on the basis of By Blend, By Feedstock, By Application, and Geography.

Global Biodiesel Market, By Blend

• B100 Pure Biodiesel
• B20 20% Biodiesel
• Blends B10 and B5 (Lower Biodiesel)

Based on Blend, the Global Biodiesel Market is segmented into B100 Pure Biodiesel, B20 20% Biodiesel, 80%. B20 (20% biodiesel, 80% petroleum diesel) is the most popular sector, thanks to its balance of performance and environmental benefits. It is commonly used in transportation and commercial fleets since it needs little engine changes and produces significant pollution savings. B100 (pure biodiesel) is the fastest-growing market, as increased carbon emission laws and renewable fuel subsidies push industry and governments toward cleaner, 100% biodiesel alternatives, particularly in environmentally conscious nations such as Europe and North America.

Global Biodiesel Market, By Feedstock

• Vegetable Oils
• Animal Fats

Based on Feedstock, the Global Biodiesel Market is segmented into Vegetable Oils, Animal Fats. Vegetable oils dominate the market, owing to their broad availability and effectiveness in biodiesel manufacturing. Soybean oil, palm oil, and rapeseed oil are widely utilized, particularly in Europe and North America. Animal fats are the fastest-growing market, driven by increased interest in waste-to-energy solutions and stricter sustainability criteria. Animal fats are a low-cost and environmentally friendly feedstock, especially in places such as Asia Pacific and Latin America where waste reduction is a top priority.

Global Biodiesel Market, By Application

• Fuel for Transportation
• Heating

Based on Application, the Global Biodiesel Market is segmented into Fuel for Transportation, Heating. The transportation fuel market is dominating, driven by the growing use of biodiesel as a cleaner alternative in automobiles to meet pollution standards and reduce dependency on fossil fuels. Heating is the fastest-growing segment, as enterprises and households increasingly turn to biodiesel for heating due to its lower environmental effect and government incentives boosting renewable energy use.

Global Biodiesel Market, By Geography

• North America
• Europe
• Asia Pacific
• Rest of the World

Based on the Geography, the Global Biodiesel Market are classified into North America, Europe, Asia Pacific, and Rest of World. Europe is the dominant region, propelled by stringent environmental legislation and initiatives like as the European Green Deal, which requires the use of renewable energy to minimize carbon emissions. The region is a market leader for biodiesel production and consumption. Asia Pacific is the fastest-growing area, driven by rising government requirements for biofuel blending in countries such as Indonesia and Malaysia, as well as increased investment in biofuel infrastructure to reduce reliance on fossil fuels and improve energy security.

Key Players

The "Global Biodiesel Market" study report will provide valuable insight with an emphasis on the global market. The major players in the market are Diester Industries, Wilmar Bioenergi Indonesia, Ineos, Bunge Limited, Archer Daniels Midland Company, Argent Energy, Neste, Valero Energy Corporation, Glencore plc, and SE biodiesel.

Our market analysis also entails a section solely dedicated to such major players wherein our analysts provide an insight into the financial statements of all the major players, along with its product benchmarking and SWOT analysis. The competitive landscape section also includes key development strategies, market share, and market ranking analysis of the above-mentioned players globally.

• Biodiesel Market Recent Developments
• In August 2024, Petrobras, Brazil's state energy corporation, has expressed interest in repurchasing the Bahia biofuel facility that it sold to Mubadala. This emphasizes the strategic importance of biofuels in Brazil's energy future.
• In June 2024, BP opted to withdraw from some European biofuel efforts while increasing its focus on Brazilian biofuel operations, highlighting cheaper production costs and higher development prospects in Latin America.