Biodiesel Market Overview

The global Biodiesel Market is projected to reach US$ 101.7 Billion by 2035 from US$ 46.2 Billion in 2025. The market is expected to register a CAGR of 8.1% during 2025–2035. This growth is primarily driven by rising environmental concerns, volatile fossil fuel prices, and strong government support for cleaner energy alternatives. ​

Biodiesel, a biodegradable and renewable energy source made from recycled cooking oils, animal fats, or vegetable oils, is being widely used as a sustainable alternative to petroleum diesel. Major drivers of growth for the biodiesel industry are positive governmental policies, for example, blending mandates and incentives, favoring production of and demand for biodiesel. Fossil fuel reserve depletion and rising energy security issues are also driving the transition toward alternative energy sources at a faster pace. Market dynamics point toward a higher demand for biodiesel for commercial transportation, agriculture, and electricity generation purposes due to biodiesel being a cleaner-burning fuel compared to conventional diesel and is compatible with diesel engines already on the market. Technological improvements for biodiesel production and the exploitation of alternative feedstocks are also making biodiesel production higher efficiency and a cheaper option, thus opening up markets for biodiesel in both developed and emerging economies.

Biodiesel Market Drivers and Opportunities

Volatility in Crude Oil Prices and Energy Security Is Anticipated to Lift the Biodiesel Market During the Forecast Period

​​Volatility of world crude prices and rising energy security issues have had a major impact on the use of biodiesel. Volatility of fossil fuel prices, fueled by geopolitical issues, interruption of supplies, and shifting world demand patterns, presents economic uncertainties for those economies highly dependent on oil imports. Biodiesel provides a locally producible and a sustainable choice that is able to break dependence on volatile markets for petroleum products. For numerous countries, especially those without extensive petroleum resources, biodiesel is a strategic option for diversification of their sources of energy and for promoting national energy security. Producing biodiesel from a range of feedstocks—such as soybean oil, palm oil, animal fat, and waste cooking oil—enables nations to produce biodiesel based on locally accessible feedstock resources, and thus curb import costs and mobilize local agriculture and waste management industries. This localized strategy not only provides rural jobs but also makes energy infrastructure more decentralized and resilient. As countries begin to prioritize energy self-reliance as a national priority, biodiesel is a viable and scalable choice that is within reach. The push toward diminishing dependence on foreign fossil fuels, combined with the financial uncertainty of crude oil pricing, continues to fuel the long-term growth trend of the world biodiesel market.

Government Policies and Regulatory Support Is a Vital Driver for Influencing the Growth of the Global Biodiesel Market

​One of the most powerful drivers in the world biodiesel industry is the stringent regulation and governmental incentives favoring adoption of alternative fuels. Governments across different regions, particularly in Europe and the United States, have introduced mandates for blending biodiesel with traditional diesel to curb greenhouse gas levels and fossil fuel dependence. Regulations may come with the form of fiscal incentives, subsidies, and outright financing for biodiesel industry infrastructure. For example, the United States' Renewable Fuel Standard requires blending of alternative fuels such as biodiesel into transportation fuel with annual volumes aimed at creating consistent demand levels. Likewise, the European Union has embraced the European Union Renewable Energy Directive (RED II) with mandatorily prescribed renewable energy levels, further stimulating the consumption of biodiesel. These regulations not only provide market stability but also stimulate private financing and research into biodiesel technology. Additionally, increased global climate agreements and the push for carbon neutrality has led countries to look for sustainable energy options. In the developing economies, policies on biofuels are being incorporated into national energy plans and strategies at a scale that both creates long-term vision and near-term momentum for market growth. Combined, these policies establish a conducive environment that ensures demand while stimulating innovation and scalability for the biodiesel industry.

Technological Advancements in Biodiesel Production Is Poised to Create Significant Opportunities in The Global Biodiesel Market

​Technological innovation holds a major potential for growth and scalability of the biodiesel industry globally. Conventional biodiesel manufacturing processes like transesterification are being transformed with advanced catalysts, enzyme-based processes, and continuous flow reactors that optimize efficiency, minimize waste, and decrease costs of production. Advances in feedstock flexibility—such as the use of non-culinary oils, algae, or waste greases—are solving the issue of food-versus-fuel controversy and improving feedstock sustainability. Furthermore, next-generation biodiesel technologies are targeting optimal extraction of low-quality raw material feedstocks, creating opportunities for regions with poor access to premium feedstocks. Robust automation and digitization within biodiesel plants are further optimizing plant efficiency and control over product quality, allowing producers to comply with ever-stricter environment and performance needs. Development and research within synthetic biology and metabolic engineering also hold potential for the design of bioengineered microorganisms that produce biodiesel from biomass without using traditional feedstocks at all. These technology improvements not only decrease the costs of biodiesel production but also elevate the competitiveness of biodiesel with petroleum diesel. With advancing technology, producers are likely to increase biodiesel production while ensuring sustainability, unlocking new market opportunities as well as propelling the industry toward strengthened adoption around the world.

Biodiesel Market Scope

Biodiesel Market Report Segmentation Analysis

The Global Biodiesel Market industry analysis is segmented into by Feedstock, by Application, and by Region.

The Vegetable Oil Segment Is Anticipated to Hold the Highest Share of the Global Biodiesel Market During the Projected Timeframe

Based on feedstock, the market is divided into vegetable oil and animal fat, with vegetable oil expected to have the largest share over 78.4% the global biodiesel market. Vegetable oils like soybean oil, palm oil, rapeseed oil, and canola oil are commonly used for biodiesel due to their large availability, renewability, and relatively minimal requirements for processing. The major dominance of vegetable oil as a feedstock for biodiesel is mainly due to its optimal chemical composition that allows for efficient transesterification processes with a high conversion rate.

The Fuel Segment Is Anticipated to Hold the Highest Share of the Market Over the Forecast Period

By application, the market is divided into fuel, power generation, and others, with the market share for the fuel segment expected to be the highest during the forecasted time frame. Primary reason for the predominance of the fuel segment is the world push toward cleaner, sustainable transportation fuels to curb carbon emissions and fight climate change. Biodiesel is most commonly used as a direct replacement or additive for petroleum diesel in motor vehicles, with fewer emissions of greenhouse gases, particulate matter, and sulfur compounds. Increasing demand for sustainable mobility, allied with policy pressures and corporate decarbonization plans, ensures the fuel segment enjoys a prominent position for the biodiesel industry within the forecasted timeframe.

The following segments are part of an in-depth analysis of the global biodiesel market:

Biodiesel Market Share Analysis by Region

Europe is projected to hold the largest share of the global Biodiesel Market over the forecast period

Europe led the world biodiesel market share with an approximate 38.5% share of the total market in 2024. The leadership of the region is largely due to stringent environment regulations, robust policy regimes, and well-developed biofuel blending mandates that favor the incorporation of renewable fuels across the transport and industries sectors. The European Union’s Directive on the promotion of the use of energy from renewable sources (RED II), which requires a prescribed share of energy used for transportation to be from renewable sources, has substantially spurred biodiesel consumption in the member states. Furthermore, advanced refinery infrastructure, a well-developed agricultural industry for the production of oilseeds, and a robust push to curb greenhouse gas emissions have also facilitated the growth of the biodiesel industry. Major contributors to the biodiesel industry in the region have been countries like Germany, France, and Italy due to their aggressive climate action plans and incentives for the adoption of biodiesel. Increasing a focus on circular economy practices and sustainable management of waste has also spurred adoption of biodiesel from the use of waste oils and fatty animals. With the continued push for investments across cleaner fuels and decarbonization, there is no doubt that Europe is poised to stay at the peak of the world biodiesel market.

In contrast, the Asia Pacific market is expected to record the fastest growth rate during the forecasted years. The growth is being fueled by rapid industrialization, rising energy needs, and favorable policies of governments in China, India, and Indonesia for the adoption of biodiesel. The region has plenty of agricultural resources along with rising concern for the environment that is favorably contributing to its growth prospects.

Biodiesel Market Competition Landscape Analysis

Global Biodiesel Market is marked by robust competition among key players focusing on innovation, strategic expansion, and sustainability. The key players like Cargill, Eni, Bunge, and Neste investing heavily in advanced, cost-efficient, and sustainable solutions. These companies are prioritizing innovations such as waste-to-fuel conversion, optimized feedstock blends, and carbon-neutral production to meet diverse industrial and transportation needs.

Global Biodiesel Market Recent Developments News:

In November 2023, Eni S.p.A. has partnered with Saipem S.p.A. to explore collaborative projects aimed at scaling up biofuel production under its subsidiary, Eni Sustainable Mobility S.p.A. The agreement focuses on expanding capacity for sustainable aviation fuel (SAF) and renewable diesel, reinforcing Eni’s commitment to decarbonizing transport and energy sectors.

In July 2023, BP has invested $10 million in WasteFuel to support the development of a global network of bio-methanol plants, converting municipal and agricultural waste into low-carbon fuel. This strategic move targets hard-to-decarbonize industries like shipping, where bio-methanol is emerging as a key solution for reducing emissions.

The Global Biodiesel Market is dominated by a few large companies, such as

·         Kolmar

·         BP

·         Eco Fox

·         Esso Italiana

·         Masol Continental

·         Italiana Petroli

·         Ital Bi Oil

·         Saras

·         Eni

·         Bunge

·         Cargill Incorporated

·         Tamoil Italia

·         Others