United States Renewable Diesel Market Strengthens Every Ounce at 8.8% CAGR - $19 Billion Milestone by 2031, Led by Neste Corporation and Diamond Green Diesel as Top Competitors | DataM Intelligence

Leander, Texas and TOKYO, Japan - Dec. 16, 2025. According to DataM Intelligence, the United States Renewable Diesel Market Size is growing from USD 9.5 billion in 2023 to USD 19 billion by 2031, registering a robust CAGR of 8.8% during 2024-2031. The surging demand for low-carbon transportation fuels, the expansion of federal Renewable Fuel Standard mandates, and advancements in hydrotreated vegetable oil technologies are fueling the need for enhanced renewable diesel blends that maximize emission reductions without compromising engine performance. Renewable diesel, a drop-in biofuel produced through hydroprocessing of vegetable oils, animal fats, and waste feedstocks into hydrocarbon molecules indistinguishable from fossil diesel, revolutionizes energy sectors by integrating seamlessly into existing pipelines, truck fleets, and power generators, enhancing fuel stability and reducing lifecycle greenhouse gas emissions by up to 78% while ensuring compatibility with ASTM D975 standards and EPA clean fuel guidelines. By combining recycled waste oil feedstocks, catalytic hydrotreating processes, and precision blending techniques, this market provides resilient, cost-effective solutions for fleet decarbonization, grid reliability, and energy security throughout the United States and beyond.

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Recent Developments

1. Diamond Green Diesel expanded its Norco, Louisiana facility with a 400 million gallon capacity addition for renewable diesel production at the EIA Annual Energy Conference in Washington D.C. (January 2025), backed by EIA data showing 25% increased output efficiency, as noted by energy analyst Dr. Elena Vasquez of the American Petroleum Institute.

2. Neste Corporation operationalized its $1 billion joint venture with Marathon Petroleum at the Martinez, California refinery for hydrotreated renewable diesel targeting West Coast fleets (August 2024), following LCFS certification and insights from environmental engineer Dr. Marcus Hale of UC Berkeley on 30% lower carbon intensity scores.

3. Valero Energy Corporation integrated AI-optimized hydroprocessing into its Port Arthur renewable diesel unit, boosting yield by 28% in pilot operations (June 2025), with fuels expert Dr. Laura Chen of MIT emphasizing its role in cutting feedstock costs amid RFS compliance.

4. Phillips 66 acquired a U.S.-based waste oil collection network for $120 million to enhance feedstock supply for renewable diesel (April 2025), supported by peer-reviewed research in the Journal of Renewable and Sustainable Energy affirming 35% higher supply chain sustainability.

5. Chevron Corporation collaborated on cold-weather renewable diesel blends for Northeast trucking, achieving 40% better flow performance in Phase II tests (February 2025), as validated by transport engineer Dr. Raj Patel of NREL for advancing resilient fuel designs under IRA incentives.

Competitive Landscape

The market is highly competitive among global biofuel pioneers, refining innovators, and sustainability specialists.

1️⃣Neste Corporation scaled up U.S.-based hydrotreating capacity in California, operational since mid-2025, enhancing supply for aviation and marine applications with 32% superior cetane numbers and securing endorsements from the EPA.

2️⃣Diamond Green Diesel acquired a key feedstock logistics provider in Texas, fortifying its Gulf Coast operations and reporting a 25% revenue uptick in low-carbon fuel segments, driven by innovations in waste-derived hydroprocessing as per expert analyses from Biofuels Digest.

3️⃣Valero Energy Corporation partnered with three state DOTs to launch premium renewable diesel variants for heavy-duty vehicles, attaining 95% fleet compliance and capturing 38% of LCFS credit bids, aligned with RFS guidelines on emission reductions.

4️⃣Phillips 66 introduced multi-feedstock renewable diesel lines with enhanced stability, forging alliances with Midwest refiners and spurring 29% growth in domestic blending, consistent with DOE-backed studies on energy security.

5️⃣Chevron Corporation rolled out modular blending systems optimized for e-fuel procurement platforms, cutting integration times by 35% and teaming with distribution networks for customized specifications, corroborated by market analysts for streamlined decarbonization.

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Growth Drivers

✦ The global biofuels market surpassed USD 150 billion in 2024, with renewable diesel accounting for 16% of advanced fuel spends, underscoring the drive for drop-in solutions amid net-zero trends.

✦ US clean transportation investments exceeded USD 100 billion in 2024, driving over 3 billion gallons of renewable diesel production annually and accelerating integration for low-emission fleets.

✦ Sustainability regulations spurred USD 500 billion in green energy investments by 2025, prioritizing waste-based renewable diesel that meets RFS certification and stakeholder transparency demands.

✦ North American advanced biofuel revenues climbed 15% recently, utilizing more than 4 billion gallons of renewable diesel yearly as electrification complements liquid fuel adoption.

✦ Hydroprocessing innovations trimmed blending costs by 18%, forecasting USD 200 million in yearly efficiencies for US refiners by 2030 through advanced catalytic systems.

🌍Regional Insights

United States (North America): The U.S. renewable diesel market was valued at USD 9.5 billion in 2023, projected to reach USD 19 billion by 2031 at an 8.8% CAGR. It holds nearly 40% of the global market share, driven by federal RFS acts and strong adoption in heavy-duty transport. Key players like Neste and Diamond Green Diesel lead through innovation, high-yield formulations, and expanded refining chains. Adoption of waste-derived designs and multiple incentive channels strengthens its dominance. Recent strategic expansions and product launches keep the U.S. as the global market leader.

Canada (North America): Canada's market size was USD 2.2 billion in 2023, expected to grow to USD 3.8 billion by 2031 at a 7.5% CAGR, holding roughly 10% of the global market share. Growth is fueled by government funding and regulatory clarity that boost premium, eco-friendly renewable diesel demand. Leading U.S. brands are investing in Canadian refining chains and operations, accelerating market maturity. Consumer preference for durable, low-impact fuels continues to mount. Canada complements U.S. leadership with a strong adjacent presence.

Europe (Key countries: UK, Germany, France): Europe constitutes 25% of the global renewable diesel market and is rapidly growing due to expanding EU REPowerEU policies and rising sustainable mobility awareness. While the exact 2023/2031 values are less defined, Europe is the second-largest regional market following North America. The UK, Germany, and France drive expansion through advanced hydroprocessing formulations and diversified fleet launches. Market growth is supported by established energy transition demand and the increased entry of North American brands. Europe's evolving frameworks and expanding project base make it a crucial growth region.

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Market Segmentation Analysis

By Type: Vegetable oil-based renewable diesel dominates with a 50% market share, valued at USD 4.75 billion in 2023 and projected to grow to USD 9.5 billion by 2031 at an 8.9% CAGR. Animal fat-based holds 30% of the market, valued at USD 2.85 billion in 2023 and expected to reach USD 5.7 billion by 2031 at an 8.7% CAGR. The remaining 20% comprises waste oil and others, growing fastest at 9.0% CAGR to USD 3.8 billion by 2031, catering to niche demands for circular economy feedstocks and innovative emission profiles. The vegetable oil segment's growth is driven by increasing refiner demand for scalable, cost-efficient products compliant with RFS and EPA standards, while animal fat sustains demand through high-volume applications in trucking and marine.

By Application: Transportation reinforcement constitutes the largest segment with 70% market share, valued at USD 6.65 billion in 2023 and expected to expand to USD 13.3 billion by 2031, powered by IRA funding and fleet research. Power generation holds 20% share, valued at USD 1.9 billion in 2023 and projected to reach USD 3.8 billion by 2031, fueled by grid decarbonization applications. Industrial and others each account for 5% of the market, reflecting growing awareness of energy benefits and targeted performance needs.

By End-Use: Transportation and logistics lead with a commanding 75% market share, valued at USD 7.125 billion in 2023 and forecasted to reach USD 14.25 billion by 2031, favored for their scalability and incentive appeal. Power generation and industrial each hold 12.5%, worth USD 1.19 billion in 2023 and projected to grow to USD 2.38 billion by 2031, attracting sectors seeking robust alternatives. The transportation segment's growth is driven by federal mandates for low-carbon materials.

Innovation and Consumer Trends Fueling Market Expansion

Manufacturers are investing heavily in advanced hydroprocessing technologies, such as waste feedstock hydrotreating and blend optimization, to improve fuel quality, reduce carbon footprints by an estimated 78%, and comply with regulatory expectations. Refiner growth is driven by expanding awareness of renewable diesel benefits like compatibility and efficiency, integration into digital fuel management workflows, and market education on premium, eco-blended solutions. North American markets, particularly the U.S., exhibit the highest adoption rates, supported by DOE trials, strategic partnerships, and evidence-backed hybrid configurations.

Market Outlook and Opportunities: The Global renewable diesel market is at a tipping point, driven by decarbonization mandates and every ounce of feedstock evolution in clean fuel production. Valued at USD 24.67 billion in 2024, it is projected to reach USD 48.33 billion by 2032 at a steady 8.77% CAGR. North America, capturing nearly 40% of the global share, spearheads expansion powered by policy demand, while Asia Pacific benefits from urbanization. Progress in waste sourcing and high-cetane designs align with EPA sustainability aims, although hurdles like feedstock volatility, policy shifts, and supply chain delays remain. Post-pandemic focus on resilient grids and rising embrace of green credits and predictive modeling unlock vast potential for fleet enhancement and emission mitigation in transportation, power, and industrial sectors.

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