Europe Biodiesel Market Trends & Summary

The Europe biodiesel market is entering a decisive phase in the continent’s transition toward cleaner energy systems. According to Renub Research, the market is projected to reach US$ 18.72 billion by 2033, rising from US$ 11.44 billion in 2024, expanding at a notable CAGR of 5.62% between 2025 and 2033. This steady growth reflects Europe’s persistent focus on reducing greenhouse gas emissions, boosting renewable energy adoption, and meeting ambitious long-term sustainability targets.

As policymakers, industries, and consumers align more closely with climate goals, biodiesel has become a central element in reshaping Europe’s transportation, power generation, and industrial sectors. Produced through transesterification of vegetable oils, animal fats, and used cooking oils, biodiesel—known chemically as fatty acid methyl esters (FAME)—has become one of Europe’s most trusted renewable fuels. Whether used as pure B100 or blended fuels like B7 and B20, biodiesel helps lower emissions without requiring extensive modifications to existing diesel engines.

This report explores how biodiesel is reshaping Europe’s energy future through technological innovation, policy support, evolving market drivers, and regional developments.

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Europe Biodiesel Market Outlook

Biodiesel plays a foundational role in Europe’s clean energy strategy, driven largely by the Renewable Energy Directive (RED II). This directive mandates that at least 14% of transportation energy must come from renewable sources by 2030—a target that significantly enhances biodiesel adoption.

Beyond transportation, biodiesel is also being used across heating systems, industrial machinery, agriculture, and backup power generation. Its ability to integrate seamlessly into existing diesel infrastructure gives it a strong competitive edge over other emerging renewable fuels.

Moreover, Europe’s agricultural sector is deeply connected to biodiesel production. Crops like rapeseed, a leading biodiesel feedstock, help sustain farming communities by creating stable demand. This dynamic strengthens Europe’s broader commitment to energy independence and circular economy principles.

Key Growth Drivers in the Europe Biodiesel Market

1. Renewable Energy Mandates Accelerating Adoption

Europe’s regulatory environment is one of the strongest global catalysts for biodiesel market expansion. Under RED II and related national frameworks, EU member states are compelled to integrate renewable fuels into the transportation mix.

By demanding lower emissions and setting binding targets, these policies:

Stimulate demand for biodiesel in both public and private transport fleets

Encourage investment in large-scale biodiesel refineries

Support advanced waste-based feedstock development

Attract new market entrants and technology innovators

Biodiesel’s role in helping Europe meet its climate-neutral ambition for 2050 cannot be overstated. Its immediate compatibility with diesel engines makes it a practical, fast-deployment solution.

2. Technological Advancements Supporting Efficiency and Sustainability

Europe’s biodiesel industry has made remarkable strides in refining and feedstock technology. Production processes have become more cost-effective and environmentally efficient, expanding biodiesel’s market potential.

A standout example is the October 2024 milestone by Argent Energy, which launched Europe’s largest facility for biobased, technical-grade glycerin at the Port of Amsterdam. By upgrading crude glycerin into 99.7% pure technical-grade material, the plant exemplifies how biodiesel by-products are being transformed into high-value commodities.

Innovation is also happening in:

Enzymatic transesterification

Advanced waste oil collection systems

Multi-feedstock refining technologies

Carbon footprint optimization tools

These advancements help lower production costs while increasing scalability and environmental performance.

3. Growing Sustainability Priorities Across Europe

Europe’s sustainability agenda is intensifying across every sector—from transportation to agriculture, manufacturing, logistics, and utilities. Biodiesel supports this transition by significantly cutting carbon emissions compared to fossil diesel.

The EU aims for renewable energy to make up at least 32% of total energy consumption by 2030, with biodiesel acting as a significant contributor. This shift enhances:

Green job creation

Sustainable farming practices

Recycling of waste oils and fats

Reduction of Europe’s fossil fuel dependency

As corporations and municipalities pledge deeper sustainability goals, biodiesel remains one of their most accessible green fuel options.

Challenges Facing the Europe Biodiesel Market

1. Supply Chain Limitations and Feedstock Constraints

One of the most significant challenges concerns the availability of feedstocks such as:

Rapeseed oil

Soybean oil

Palm oil (in limited volumes under EU sustainability rules)

Animal fats

Recycled cooking oil

Agricultural variability, climate impacts, and competing industries—such as food processing and oleochemicals—create uncertainty in feedstock supply and cost. As demand surges, Europe’s producers must navigate material shortages and sourcing issues, especially for waste-based oils, which are environmentally preferred but geographically limited.

2. Cost Competitiveness Against Diesel and Other Renewables

Biodiesel generally remains more expensive to produce than fossil diesel, primarily due to feedstock costs. While government incentives and carbon pricing help close the gap, price competitiveness continues to be a hurdle for broader adoption.

Adding to the challenge is rising competition from alternative low-carbon fuels such as:

Hydrogen (green and blue)

Renewable diesel (HVO)

Synthetic e-fuels

Biomethane

As these technologies evolve, biodiesel producers must reinforce their relevance through innovation, waste-based feedstocks, and economies of scale.

Market by Application

European Biodiesel Fuel Market

Transportation continues to be the largest consumer of biodiesel. As Europe intensifies its emissions reduction strategies for passenger cars, commercial fleets, freight transport, and public mobility, demand for biodiesel fuel blends remains strong.

Biodiesel’s compatibility with existing engines offers a distinct advantage, especially in sectors where electric or hydrogen solutions are not immediately viable.

European Biodiesel Power Generation Market

Biodiesel is gaining momentum as a cleaner alternative for electricity generation. It plays a crucial role in:

Backup generators

Remote power solutions

Grid stabilization operations

Off-grid industrial applications

As Europe moves toward decarbonizing its electricity networks, biodiesel-powered generation systems offer an efficient transitional solution.

European Vegetable Oil Biodiesel Market

Vegetable oils—particularly rapeseed oil—dominate the region’s biodiesel feedstock landscape. Europe’s emphasis on sustainability has led to increased investment in locally sourced vegetable oils, reducing dependency on imported materials and enhancing overall supply chain stability.

Utilizing vegetable oils derived from sustainable farming practices also strengthens Europe’s broader environmental commitments.

Country-Level Market Insights

United Kingdom

The UK biodiesel market is expanding steadily as public awareness of climate strategies grows. Government policies promoting alternative fuels and decarbonization bolster demand across transport and industry. Businesses are increasingly shifting toward biodiesel as part of environmental compliance and corporate responsibility initiatives.

Germany

As Europe’s largest biodiesel producer, Germany sets the pace in technology adoption, regulatory integration, and sustainability initiatives. Its rigorous standards and strong industrial capabilities make it a central hub for large-scale biodiesel production and innovation across the EU.

France

Driven by aggressive carbon-reduction goals and strong government incentives, France is experiencing rapid biodiesel growth. The transportation, agriculture, and manufacturing sectors increasingly turn to biodiesel as a cost-effective way to meet environmental benchmarks.

Spain

Spain’s biodiesel market is strengthening as the nation prioritizes diversification of its energy sources. By reducing reliance on imported fossil fuels and increasing investment in renewables, Spain positions biodiesel as an essential pillar of its clean energy mix.

Italy

Italy’s market is on an upward trajectory as the country intensifies efforts to reduce emissions within transport networks. Public awareness and industrial adoption of biodiesel are growing, helping the nation progress toward EU carbon-neutrality objectives.

Market Segmentation

By Application

Fuel

Power Generation

Others

By Feedstock

Vegetable Oil

Animal Fats

By Country

France

Germany

Italy

Spain

United Kingdom

Belgium

Netherlands

Turkey

Rest of Europe

Key Players Covered (Overview, Recent Developments, Revenue Analysis)

Archer Daniels Midland Company

Future Fuel

Neste

Renewable Energy Group, Inc.

Bunge Global SA

Wilmar

Shell

These companies are advancing Europe’s biodiesel sector through expansion initiatives, new refining technologies, sustainability commitments, and vertical integration in the supply chain.

Final Thoughts

Europe’s biodiesel market is at an inflection point—where climate urgency, technological innovation, and regulatory pressure intersect to accelerate adoption. As the region transitions toward cleaner mobility and industrial operations, biodiesel stands as one of the most scalable and pragmatic renewable fuel solutions available today.

With strong government support, rising sustainability expectations, and continuous technological improvements, the market is well-positioned to grow steadily through 2033. Whether powering vehicles, supporting renewable electricity, or strengthening agricultural economies, biodiesel’s role in Europe’s green energy future is undeniable.