Global Biodiesel Market to Reach USD 70.61 Billion by 2033 Driven by Renewable Energy Demand

Introduction

According to Renub Research Recent Analysis Biodiesel Market is projected to grow from USD 41.62 billion in 2024 to USD 70.61 billion by 2033, at a CAGR of 6.05% during 2025–2033. This growth is primarily driven by the growing demand for sustainable energy, supportive government policies, and rising environmental awareness.

Biodiesel, a renewable, biodegradable fuel derived from vegetable oils, animal fats, and recycled cooking grease, is a cleaner alternative to conventional diesel. Its increasing adoption across transportation, power generation, and industrial sectors highlights the global shift towards a low-carbon energy future.

Market Overview

Biodiesel is produced through transesterification, converting fats and oils into fatty acid methyl esters (FAME). It can be used alone (B100) or blended with petroleum diesel (e.g., B20) without major engine modifications.

Key features of biodiesel include:

Renewable and biodegradable – reduces environmental pollution

Lower greenhouse gas emissions – up to 80% less than conventional diesel

Versatility – suitable for vehicles, machinery, marine, and off-grid power solutions

Biodiesel also contributes to the circular economy by utilizing waste oils and fats, making it an essential component of sustainable energy strategies globally.

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Growth Drivers in the Biodiesel Market

1. Rising Demand for Sustainable Energy

As countries focus on reducing carbon emissions and achieving climate change targets, biodiesel emerges as a viable solution. It supports energy security, local production, and environmental sustainability.

Example: By 2040, India’s primary energy demand is expected to double, increasing the use of biodiesel and other alternative fuels, which are largely carbon-free and locally sourced.

2. Supportive Government Policies and Regulations

Policies such as blending mandates, tax incentives, and subsidies encourage biodiesel adoption. Countries like the United States, Brazil, and EU nations have implemented mandates to integrate biodiesel into their fuel supply chains.

Example: According to ERIA, ASEAN and East Asian countries are projected to reach 37 million tons of biodiesel demand by 2035 due to supportive regulations.

3. Expanding Applications Across Industries

Biodiesel is not limited to transportation. Its use in power generation, industrial heating, agriculture, and marine applications is increasing. The fuel enhances equipment longevity, reduces emissions, and provides off-grid energy solutions, further driving market growth.

Example: The EU has set a target to decarbonize the transport sector by 15% by 2025 and 30% by 2030, boosting biodiesel demand.

Challenges in the Biodiesel Market

1. Feedstock Availability and Cost

Biodiesel production depends on vegetable oils, animal fats, and waste oils. Fluctuating agricultural yields, weather conditions, and competing food industry demand affect feedstock supply and costs.

Concerns about deforestation and sustainability, particularly with crops like soy and palm oil, also impact raw material sourcing and production costs.

2. Technological and Infrastructure Limitations

High-quality biodiesel production requires advanced technology, which may be costly for smaller manufacturers. Additionally, limited distribution networks, refueling infrastructure, and engine compatibility issues in cold climates can slow adoption, especially in developing regions.

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Segment Analysis

By Application:

Fuel – Primary use in transportation, construction, and agricultural equipment

Power Generation – Off-grid electricity, backup power, industrial machinery

Others – Heating systems and niche industrial applications

By Feedstock:

Vegetable Oil – Soybean, palm, rapeseed oil (renewable and widely available)

Animal Fats – Tallow, lard, and other animal by-products

By Country:

North America: United States, Canada

Europe: Germany, France, Italy, Spain, UK, Belgium, Netherlands, Turkey

Asia Pacific: China, Japan, India, South Korea, Thailand, Malaysia, Indonesia, Australia, New Zealand

Latin America: Brazil, Mexico, Argentina

Middle East & Africa: Saudi Arabia, UAE, South Africa

Regional Insights

United States – The U.S. leads North America due to government incentives, Renewable Fuel Standard mandates, and strong agricultural feedstock supply. Advanced biodiesel production technologies and a developed infrastructure facilitate seamless integration into the transportation network.

Example: January 2023, the US Department of Energy allocated $118 million to support biofuel production, including biodiesel and bioproducts.

Germany – One of Europe’s largest markets, driven by ambitious GHG reduction goals and strong renewable energy policies. The country relies heavily on rapeseed oil and modern production technologies, ensuring efficient biodiesel adoption.

India – Rapidly growing market focused on energy security, sustainable development, and non-food oilseed cultivation. Government policies like the National Biofuels Policy and National Bioenergy Programme support production, blending, and research initiatives.

Saudi Arabia – Emerging Middle Eastern market, supported by Vision 2030 energy reforms and growing interest in renewable fuels. Collaborations between public and private sectors aim to enhance production capabilities and supply chains.

Technological Trends

Second-generation biofuels – HVO100 and similar fuels from vegetable oils and waste products, usable in standard diesel engines

Blending advancements – Higher biodiesel ratios like B20 or B30 for greater environmental impact

Waste-to-energy technologies – Converting municipal and agricultural waste into bio-methanol or biodiesel

Examples:

October 2024: ORLEN Group launched HVO100 in Germany, a second-generation biofuel from waste oils

July 2023: BP invested $10 million in WasteFuel to convert waste into bio-methanol

Competitive Landscape

Major players include:

Archer Daniels Midland Company

FutureFuel

Nestlé

Renewable Energy Group, Inc.

Bunge Global SA

Wilmar

Shell

These companies focus on R&D, strategic investments, and expansion of production capacity. Collaborations and innovation in feedstock utilization remain key strategies to maintain competitive advantage.

Recent Developments:

September 2024: Indian Oil Corporation achieved a 0.49% biodiesel blending ratio, surpassing other domestic oil marketing companies

November 2023: Eni SPA partnered with Saipem SPA to expand biofuel and renewable diesel production

March 2023: Cargill opened a new Belgian plant to increase global biodiesel production

Future Outlook

The Global Biodiesel Market is projected to reach USD 70.61 billion by 2033. Market growth will be driven by:

Rising environmental and carbon reduction awareness

Supportive government policies and subsidies

Expansion of biodiesel applications in transportation, power generation, and industry

Technological advancements in feedstock efficiency and production methods

The market will continue to witness sustainable growth, bridging gaps between developed and emerging countries while supporting a low-carbon energy future.

Conclusion

Biodiesel is emerging as a cornerstone of renewable energy, offering a practical, sustainable, and environmentally friendly alternative to fossil fuels. With rising carbon reduction mandates, technological innovations, and expanding industrial applications, the global biodiesel market is set for robust growth, reaching USD 70.61 billion by 2033. Continued government support, research, and infrastructure development will further enable the market to play a pivotal role in achieving global energy sustainability goals.

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