Asias Biofuel Surge: How Oil-Based Biofuels Are Powering a USD 529 Million Market Toward a 10.7% Growth Future

The global oil based biofuel industry is a critical segment of the renewable energy sector, encompassing biodiesel, hydrotreated vegetable oil (HVO), sustainable aviation fuel (SAF), and related products derived from biological oils and fats rather than fossil fuels. This landscape has emerged as policymakers and industry leaders seek to reduce greenhouse gas emissions, enhance energy security, and diversify fuel sources for transportation and industrial applications. The inherent renewable nature of oil based biofuel sourced from vegetable oils, animal fats, and waste oils positions it as both a transitional and long-term solution for decarbonizing energy systems worldwide.
In 2024, the global oil base biofuel market size amounted to USD 529 million and compound annual growth rate of 10.7% through 2031, reaching market size USD 1,077 million by 2031. With an average price USD 1,800 per ton with total global unit sold at 294,110 ton in 2024. Factory gross margin is 30%, the factory gross profit USD 600 per ton, cost of goods sold is USD 1,200 per ton. The COGS breakdown feedstock, processing and conversion, including chemicals, catalysts, and utilities; energy and utilities, labor, maintenance and logistics and storage. A single line full machine capacity production is around 2,500 ton per line per year. Downstream demand is concentrated in road transport followed by marine, aviation and industrial heating.
Latest Trends and Technological Developments
Recent developments underscore both market momentum and challenges. On December 2025, Germanys cabinet approved a draft biofuels law preserving the use of food and feed base ingredients in biofuel production, shaping regulatory certainty for producers and blending mandates in the EU, though restrictions on palm oil for emission credits are set to begin in 2027. On November 2025, a joint venture between Petronas, Enilive, and Euglena commenced construction of a new biorefinery in Pengerang, Malaysia, targeting annual processing of up to 650,000 tonnes of renewable feedstock to produce SAF, HVO and bio-naphtha a significant capacity expansion for Southeast Asias renewable fuels infrastructure. In September 2025, Southeast Asia was reported poised to export a surplus of biofuels to Europe, leveraging abundant feedstocks and growing production capacity, with sustainable aviation fuel capacity projected to reach millions of tons annually by 2030. These developments illustrate how technological scaling, strategic partnerships, and regulatory frameworks are reshaping global biofuel production and supply chains.

Shell Global Solutions International B.V. purchases advanced Hydroprocessed Esters and Fatty Acids (HEFA) bio-jet fuel, certified under the ASTM D7566 standard, from Neste Oyj, a leading Finnish producer. In a publicly disclosed long-term supply agreement, Shell purchases this renewable aviation fuel at a market price indexed to conventional jet fuel, typically ranging from USD 1,200 to USD 1,800 per metric ton, with premiums reflecting sustainability credentials and the cost of production from waste and residue feedstocks like used cooking oil.
Delta Air Lines has integrated Neste's MY Sustainable Aviation Fuel into its operations at Los Angeles International Airport (LAX). Delta purchases and blends this oil-based biofuel, derived from renewable waste fats and oils, into its regular fuel supply for departing flights. A specific offtake agreement covers the supply of approximately 10 million gallons (over 30,000 metric tons) of this bio-jet fuel, representing a multi-million dollar investment. At prevailing market rates, this volume of sustainable aviation fuel (SAF) would amount to a commitment valued in the range of USD 40 to 60 million, demonstrating the airline's strategic investment in decarbonizing its fleet.
Asia remains a major growth engine for oil based biofuel, buoyed by large populations, expanding transport sectors, and government blending mandates that stimulate domestic consumption and investment. The Asia Pacific segment is projected to grow rapidly in coming years, supported by national renewable fuel targets and rising investments in green refineries and HVO facilities. Countries such as China and India are accelerating biodiesel and SAF initiatives to reduce dependence on imported fossil fuels, and large agricultural feedstock bases in Asia support competitive production economics relative to many Western markets. However, regional challenges include feedstock price volatility and infrastructure bottlenecks that can constrain distribution efficiency.
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Oil Based Biofuel by Type:
Vegetable Oils

Waste Oils and Cooking Oils

Animal Fats and Tallow

Synthetic Oils

Others

Oil Based Biofuel by Product Category:
Transesteriffication

Hydrotreatment

Esterification

Others

Oil Based Biofuel by Market Segment:
Low Blends

Medium Blends

High Blends

Neat Fuels

Others

Oil Based Biofuel by Features:
Low Sulfur and Low Carbon Intensity

High Celane Number

Improved Oxidation Stability

Reduced Greenhouse Gas Emissions

Others

Oil Based Biofuel by Usage:
Transportation Fuel

Marine Fuel

Power Generation and Backup Systems

Industrial Boilers and Heating

Others

Oil Based Biofuel by Application:
Road Transportation

Aviation

Marine

Industrial Heating

Others

Global Top 20 Key Companies in the Oil Based Biofuel Market
ADM (US)

BASF SE (Germany)

POEt LLC (US)

TotalEnergies (France)

ExxonMobil Corporation (US)

Bunge Limited (US)

Cargill Inc (US)

Wilmar International Limited (Singapore)

Valero Energy Corporation (US)

Verbio Vereinigte BioEnergie AG (Germany)

Shell plc (UK)

Targray (Quebec)

Eni S.p.A. (Italy)

Marathon Petroleum Corporation (US)

Nestle (Switzerland)

Renewable Energy Group (US)

Chevron (US)

Diamond Green Diesel (US)

Longyan Zhuoyue New Energy Co., Ltd. (China)

Zhejiang Jiaao Enprotech (China)

Regional Insights
Within Southeast Asia, ASEAN markets led by Indonesia and Malaysia are scaling biofuel production through government mandates and public-private investments. Indonesias biodiesel policy is advancing toward higher blend levels (e.g., B50), moving beyond current B40 requirements to reduce fossil fuel imports and strengthen energy security. Malaysias strategic investments in biofuel production facilities further augment regional capacity. ASEANs surplus potential positions the bloc as a competitive exporter to markets such as Europe, particularly in SAF and renewable diesel segments, supported by abundant palm oil and waste oil feedstocks. However, sustainability concerns, particularly linked to land use change and feedstock sourcing, remain focal points for regulators and international buyers.

Despite robust growth prospects, the oil based biofuel industry faces notable hurdles. Feedstock availability and price volatility can significantly impact production economics, especially in regions where agricultural outputs are subject to climatic and logistical pressures. High production costs relative to conventional fuels, particularly in markets with limited subsidies, can also impede competitiveness. Infrastructure gaps in distribution networks and blending facilities further constrain market expansion in some developing economies. Moreover, regulatory uncertainties and evolving sustainability criteria especially concerning land use and deforestation require continuous adaptation by producers and policymakers.

For stakeholders, strategic priorities include diversifying feedstock bases to include waste oils and second-generation sources, investing in advanced hydrotreating and catalytic conversion technologies to enhance yield and fuel quality, and aligning production planning with evolving regulatory frameworks such as renewable fuel standards. Partnerships between national oil companies, technology licensors, and logistics providers can accelerate market entry and scale. Forward-looking strategies should also incorporate lifecycle sustainability metrics to meet stringent buyer and regulator expectations in export markets.

Product Models
Oil-based biofuels are a key renewable energy pathway that convert lipid-rich feedstocks into sustainable fuels compatible with existing diesel and aviation infrastructure.
Vegetable Oils is a biofuel produced from refined or crude plant-derived oils such as soybean, palm, rapeseed, and sunflower oil, commonly used for biodiesel and renewable diesel production. Notable products include:
SoyGold Biodiesel Renewable Energy Group: Soy-based biodiesel optimized for road transport emissions reduction.
PalmPure RD Neste: Renewable diesel derived from certified sustainable palm oil.
CanolaGreen Fuel Cargill: Canola oil-based biodiesel with cold-flow performance.
SunFuel B100 Archer Daniels Midland: Sunflower oil biodiesel for blending applications.
Rapeseed Methyl Ester Wilmar International: European-grade rapeseed biodiesel feedstock.
Waste Oils and Cooking Oils is a biofuel produced by recycling used cooking oils and industrial waste oils, offering strong sustainability benefits and lower lifecycle emissions. Notable products include:
NEXBTL Waste-Based Diesel Neste: Premium renewable diesel from used cooking oil.
EcoDiesel UCO Argent Energy: Biodiesel made from collected waste oils.
ReFuel Plus Darling Ingredients: Waste oil-based renewable diesel feedstock.
GreenCycle Fuel Greenergy: Circular biodiesel from food-service waste oil.
BioFlex UCO Diesel Verbio: Used cooking oil biodiesel for blending markets.
Animal Fats and Tallow is a biofuel derived from rendered animal fats and tallow, widely used in renewable diesel and aviation fuel due to high energy density. Notable products include:
TallowGreen RD Darling Ingredients: Renewable diesel from animal fat residues.
BioTallow Diesel Argent Energy: Biodiesel using meat-processing byproducts.
AFR Renewable Diesel Neste: Animal fat-based renewable diesel blend.
RenderFuel B100 Baker Commodities: Biodiesel from rendered animal fats.
EcoTallow Fuel Valley Proteins: Low-carbon biodiesel for industrial fleets.
Synthetic Oils is a biofuels produced from chemically synthesized oils using biomass, captured carbon, or hydrogen, designed for high performance and drop-in fuel compatibility. Notable products include:
HVO Advanced Neste: Hydrotreated vegetable and synthetic oil renewable diesel.
Power-to-Liquid Diesel Sunfire: Synthetic diesel from renewable electricity.
Carbon-to-Liquid Fuel LanzaJet: Synthetic jet and diesel fuel from recycled carbon and renewable hydrogen.
Synthetic HVO-X Repsol: Hydrotreated synthetic oil fuel with low carbon intensity.
Power-to-Liquid Fuel Siemens Energy: Synthetic oil fuel produced using renewable electricity and CO2.

The global oil based biofuel industry is at a pivotal growth juncture, underpinned by strong policy support, technological advances, and accelerating demand across transportation and industrial segments. While cost pressures and sustainability considerations present ongoing challenges, the sectors projected growth trajectory and expanding production capacities particularly in Asia and Southeast Asia signal compelling opportunities for producers, consumers, and investors alike.

Investor Analysis
For investors, the information in this report is critical for making informed decisions. Understanding market size, growth rates, pricing structures, and cost dynamics enables investors to assess revenue potential and profit margins. Insights into regional developments highlight where demand and production capacity are scaling fastest, informing capital allocation and geographic focus. Technological trends and regulatory news signal imminent shifts that could impact asset valuations and competitive positioning. Strategic insights help investors evaluate partners and technologies that are most likely to yield sustainable returns. Overall, this research supports risk assessment, portfolio diversification, and identification of high-growth opportunities in the renewable fuels landscape.

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5 Reasons to Buy This Report
Comprehensive analysis of the global oil based biofuel market size, pricing, and growth projections.
Detailed regional insights with a focus on Asia and Southeast Asia, including policy and demand drivers.
Examination of technological trends and recent industry developments with dated news references.
Strategic evaluation of industry challenges and investment implications.
Profiles of the top global players shaping market dynamics.
5 Key Questions Answered
What is the current global market size and future growth trajectory for oil based biofuels?
How do regional markets, especially Asia and ASEAN including Indonesia, compare in terms of production and demand?
What are the latest technological developments and regulatory changes influencing the industry?
What challenges and cost dynamics should producers and investors anticipate?
Who are the leading companies in the oil based biofuel sector and what are their strategic positions?
Chapter Outline
Chapter 1: Introduces the report scope of the report, executive summary of different market segments (by region, product type, application, etc), including the market size of each market segment, future development potential, and so on. It offers a high-level view of the current state of the market and its likely evolution in the short to mid-term, and long term.
Chapter 2: key insights, key emerging trends, etc.
Chapter 3: Manufacturers competitive analysis, detailed analysis of the product manufacturers competitive landscape, price, sales and revenue market share, latest development plan, merger, and acquisition information, etc.
Chapter 4: Provides profiles of key players, introducing the basic situation of the main companies in the market in detail, including product sales, revenue, price, gross margin, product introduction, recent development, etc.
Chapter 5 & 6: Sales, revenue of the product in regional level and country level. It provides a quantitative analysis of the market size and development potential of each region and its main countries and introduces the market development, future development prospects, market space, and market size of each country in the world.
Chapter 7: Provides the analysis of various market segments by Type, covering the market size and development potential of each market segment, to help readers find the blue ocean market in different market segments.
Chapter 8: Provides the analysis of various market segments by Application, covering the market size and development potential of each market segment, to help readers find the blue ocean market in different downstream markets.
Chapter 9: Analysis of industrial chain, including the upstream and downstream of the industry.
Chapter 10: The main points and conclusions of the report.

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