Japan Drive Renewable Diesel Market Growth at 8.77% CAGR on Low-Carbon Fuel Mandates & Drop-In Diesel Adoption

Leander, Texas and Tokyo, Japan - Jan.08.2026
As per DataM Intelligence research report "Renewable Diesel Market reached US$ 24.67 billion in 2024 and is expected to reach US$ 48.33 billion by 2032, growing with a CAGR of 8.77% from 2025 to 2032." Increasing environmental consciousness, favorable government policies, stringent emissions regulations, compatibility with existing infrastructure, and demand for low-carbon drop-in fuels are fueling growth in the renewable diesel market.

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Japan: Recent Industry Developments
✅ In 2025, Neste and ITOCHU extended collaboration to expand availability of Neste MY Renewable Diesel, including supply to the Osaka-Kansai Japan Expo construction site.
✅ In May 2025, Japanese automaker Toyota partnered with renewable diesel producer ENEOS to develop and test vehicles powered by renewable diesel.
✅ In 2025, Major refiners like Idemitsu began offering imported HEFA-based renewable diesel, targeting significant carbon reductions for construction and fleet applications.

United States: Recent Industry Developments
✅ In August 2025, Valero Energy's Diamond Green Diesel (DGD) maintained high production capacity across Gulf Coast plants, supporting over 1.2 billion gallons annually of renewable diesel.
✅ In 2025, Diamond Green Diesel expanded facilities, including additions in Norco, Louisiana, boosting output efficiency amid rising demand.
✅ In 2025, Significant investments and policy support, including EPA proposals for higher blending mandates, drove capacity expansions and reduced imports of renewable diesel.

Renewable Diesel Market: Drivers
The renewable diesel market is driven by stringent environmental regulations, government incentives like the US Renewable Fuel Standard (RFS) and California's Low Carbon Fuel Standard (LCFS), and corporate net-zero commitments promoting low-carbon alternatives. Its drop-in compatibility with existing diesel infrastructure and engines, ability to reduce GHG emissions by up to 78%, and growing demand for sustainable transportation fuels accelerate adoption.
Geopolitical energy security concerns, volatility in fossil fuel prices, abundant waste-based feedstocks, and investments in biorefinery conversions further sustain momentum amid global decarbonization efforts.

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Renewable Diesel Market: Major Players
Neste Corporation, Diamond Green Diesel (DGD), Valero Energy Corporation, Chevron Corporation, Phillips 66, Marathon Petroleum Corporation, World Energy, Eni S.p.A., PBF Energy Inc., Gevo, Inc.

Segment Covered in the Renewable Diesel Market:
By Feedstock
Animal Fat, Vegetable Oil, Others.
By Application
Transportation, Power Generation, Others.

Regional Analysis
North America - Dominant Share
North America leads with the highest production capacity, driven by regulatory mandates like RFS and LCFS, major investments in biorefineries, and strong demand for low-carbon fuels in transportation.
Asia Pacific - Fastest-Growing
Asia Pacific expands rapidly due to rising energy demand, policy support for biofuels, abundant feedstocks, and increasing adoption in emerging economies.
Europe - Significant Share
Europe grows with strict emissions targets, incentives for renewable fuels, and focus on sustainability in transportation and industry.
South America - Gradual Growth
South America shows steady progress supported by bio-feedstock availability and domestic biofuel policies.
Middle East & Africa - Emerging Growth
Middle East & Africa rises with investments in diversification and sustainable energy initiatives.

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