Europe Biodiesel Market Forecast 2025–2033

Europe Biodiesel Market Overview

According to Renub Research Latest Report Europe Biodiesel Market is projected to grow from US$ 11.44 billion in 2024 to US$ 18.72 billion by 2033, registering a CAGR of 5.62% during the forecast period of 2025–2033.

Biodiesel is a renewable fuel derived from vegetable oils, animal fats, or recycled cooking oils through transesterification, producing fatty acid methyl esters (FAME). It can be used pure (B100) or blended with conventional diesel (B7, B20, etc.) for transportation, power generation, and industrial applications.

In Europe, biodiesel is integral to reducing greenhouse gas emissions, achieving renewable energy targets, and supporting sustainable mobility. Its usage spans vehicles, industrial machinery, and heating systems, while also providing a market for agricultural crops like rapeseed.

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Growth Drivers

1. Renewable Energy Mandates

The European Union’s Renewable Energy Directive (RED II) mandates a minimum of 14% renewable energy in transport fuels by 2030.

Biodiesel adoption is central to meeting these targets, reducing carbon emissions, and supporting sustainable mobility initiatives.

2. Technological Advancements

Improved production technology has enhanced efficiency, lowered costs, and expanded feedstock options, encouraging wider adoption.

Example: Argent Energy launched Europe’s largest facility for producing technical-grade glycerin from waste-based biodiesel (Oct. 2024), showcasing innovation in circular bioeconomy solutions.

3. Sustainability Focus

Biodiesel contributes to Europe’s sustainability and carbon-reduction goals, promoting circular economies and reducing reliance on fossil fuels.

Under RED II, renewable energy is targeted to comprise 32% of total energy consumption by 2030, with biodiesel playing a key role in transportation, heating, and power generation.

Market Challenges

1. Supply Chain Limitations

Fluctuating agricultural yields and competition for feedstocks (vegetable oils, animal fats) create volatility in biodiesel supply.

Producers face challenges in securing stable and cost-effective raw materials, which can affect production scalability.

2. Cost and Competition

Biodiesel production is more expensive than conventional diesel, limiting widespread adoption.

Rising competition from hydrogen-based fuels and synthetic alternatives could challenge market growth and position.

Market Segments

By Application

Fuel – Largest segment, encompassing cars, buses, trucks, and trains using biodiesel blends.

Power Generation – Biodiesel-powered generators provide low-carbon electricity and backup solutions.

Others – Industrial machinery, heating systems, and niche applications.

By Feedstock

Vegetable Oil – Rapeseed oil is predominant; sustainable sourcing is increasingly emphasized.

Animal Fats – Utilized as a supplementary feedstock for biodiesel production.

By Country

United Kingdom: Rising environmental awareness and government incentives drive transportation and industrial adoption.

Germany: Regulatory frameworks and public demand for low-emission fuels support strong biodiesel growth.

France: Incentives and sustainability initiatives boost biodiesel usage in transportation and industry.

Spain: Focus on diversifying energy sources and reducing fossil fuel dependency.

Italy: Transportation sector demand and proactive environmental policies fuel growth.

Other countries: Belgium, Netherlands, Turkey, and Rest of Europe contribute to overall market expansion.

Regional Insights

Germany: Market leader with strong regulatory and industrial support; innovation in feedstock and production technology.

UK: Robust growth due to public consciousness and renewable energy policies.

France: Government incentives and adoption in transportation accelerate market expansion.

Spain & Italy: Renewable energy policies and green mobility initiatives drive biodiesel adoption.

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Competitive Landscape

Key players are analyzed across overview, recent development, and revenue analysis:

Archer Daniels Midland Company

Future Fuel

Neste

Renewable Energy Group, Inc.

Bunge Global SA

Wilmar

Shell

Focus Areas:

Expansion of production capacity and feedstock diversity.

Technological advancements in biodiesel efficiency and purity.

Alignment with European renewable energy mandates and sustainability goals.

Market Outlook

Europe’s biodiesel market is set for steady growth, driven by:

Strong regulatory support and government incentives.

Increased demand for renewable fuels in transportation and industrial sectors.

Advancements in production technology and sustainable feedstocks.

Rising public and industrial awareness regarding environmental sustainability.

Biodiesel will remain a crucial contributor to Europe’s low-carbon energy mix, supporting climate goals while providing economic opportunities for agriculture and energy industries.

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