Global Biodiesel Market Size to Surpass USD 63 Billion by 2033

How Big Is the global biodiesel market?

The global biodiesel market size is anticipated to reach USD 46.1 Billion in 2024. Looking forward, IMARC Group estimates the market to reach USD 63.4 Billion by 2033, exhibiting a CAGR of 3.6% from 2025-2033. Market drivers include what happens when the government supports renewable energy, what happens when energy supply is secure, and how oil price volatility behaves, what happens when technology improves production methods, what happens when people increase their awareness of the environmental impact of fossil fuels, and what happens when measures reduce climate change.

Government Regulations and Policies Supporting Renewable Energy

With the development of more government bioenergy and climate change regulations and policies, biodiesel markets are growing around the world. Several countries have implemented ambitious renewable energy, renewable diesel and biofuels mandates and incentive programs to encourage manufacturers, producers and consumers to use biodiesel as an alternative to petroleum-based diesel fuel and energy. Commonly implemented blending mandates require a certain percentage of biodiesel be mixed with fossil diesel, increasing the stability of the diesel market generally helps stabilize the biodiesel market.

In the United States, the best well-known example is the Renewable Fuel Standard, which includes requirements for transportation fuel to contain certain amounts of renewable fuel (including biodiesel fuel). For example, biodiesel, which was made a common transportation fuel as a result of federal policies, has seen biodiesel producers build production facilities. Under the Renewable Energy Directive, the European Union has set out ambitious targets for renewable energy in transport, with biodiesel accounting for a meaningful share of renewable transport energy.

Federal, state and in some cases local government tax credits are available to biodiesel producers and are often stated as the reasons biodiesel competes on cost with petroleum diesel. These credits are mainly intended to help lower biodiesel production costs. Incentives may be provided in the form of fuel tax exemption to encourage the retail sale of biodiesel blends, and to encourage the use of biodiesel in commercial and private vehicles.

These policies make governments all over the world commit to reducing greenhouse gas emissions and shifting energy consumption towards sustainable energy sources. Governments also incentivize investments by private companies in upstream biodiesel supply chain activities such as production facilities, research and development, and distribution infrastructure. Differences in policies between the two countries have led to a heterogeneous mix of markets with aggressive blending mandates in some countries and voluntary programs elsewhere.

Regardless of how this issue is resolved, policies enacted by government should allow for the continued existence of a biodiesel industry through the forecast period.

Energy security and world oil price volatility is becoming more important in the global biodiesel market today, but in terms of country level drivers, energy security is the most straightforward. In a biodiesel economy, the reliance on imported petroleum which is subject to geopolitical disruption, depletion, and price fluctuations is decreased. Biodiesel could be produced domestically, thus improving energy independence and price stability.

Extreme fluctuations in oil prices create uncertainty for consumers as well as firms and government. Possible sources of uncertainty for crude oil prices are the amount of crude oil produced by oil producing countries, the state of the world economy and the effects of political disruption. A local, resource-based biodiesel industry may stabilize biodiesel prices resistant to commodity-based volatility for a given region or locality.

Various fuel-vulnerable economic sectors, such as shipping, agriculture, and public transport, need some fuel operating cost predictability, which can be better realized with biodiesel produced from domestic resources. It is less exposed to currency fluctuations or the oil speculations popular in the international petroleum market. Thanks to this factor, biodiesel is increasingly in use by fleets and other transport services that seek fuel price stability.

Energy security involves not only price but also supply guarantees and independence. The large-scale production of food allows food crops and agricultural by-products to be used as bio-feedstocks for the biodiesel industry. Production of biomass for biofuel in rural areas is also regarded as a form of rural development and energy security improvement for the producer countries and, for countries importing these biofuels, as a way to diversify their source of energy and avoid oil supply shocks.

Biodiesel production is an example of a circular economy, where waste oils and fats are fed into the system. Biodiesel has the potential to increase energy security as a co-product of a waste to energy system. In other words, on the one hand a disposal "problem" is solved, and on the other a new source of fuel created. Growing energy security or energy independence concerns are driving biodiesel to play an increasing role as a domestic, renewable energy source in national energy policy decisions.

The biodiesel sector is seeing more rapid growth as new technologies, increased feedstock use, higher conversion efficiencies, lowered processing costs, and improved product quality have been developed. The use of more efficient catalysts and optimal process conditions in modern transesterification technologies allows for maximum conversion and minimum by-product and energy costs, making biodiesel an economically viable alternative to diesel refining.

Research and development has expanded the feedstock base to include recycled animal fat, used cooking oil, processed algae and other nonfood biomass feedstock. Despite this, soybean, rapeseed, and palm oils still account for the huge majority of the feedstock that goes into biodiesel. This action diversifies feedstock. Reducing food competition. Avoiding ethical dilemmas over food versus fuel. It improves overall biodiesel sustainability as waste feedstocks like used frying oil allow for existing chains to be retrofitted using waste streams. This improves the sustainability of the overall biodiesel supply chain and the environmental performance of a 'circular economy'.

No food vs. fuel issues exist because second-generation biodiesel uses non-food feedstocks and industrial waste. Cellulosic and even algae feedstocks can be converted to high quality biodiesel within the capabilities of advanced process technology, without some of the food versus fuel controversies of other raw materials. Compared to other oil crops (both edible and non-edible), algae have a comparatively higher yield per unit area and can be grown on non-arable land. Research on algae is mainly focused on genetic modification of populations and cultivation methods to improve yield and reduce cost.
Alternate biodiesel production methods such as pyrolysis and hydrotreatment have the potential advantage of providing a biodiesel product that has improved cold weather properties and storage stability, and may be able to use a wider variety of feedstocks. In addition, innovation in production technologies and available feedstock allows the biodiesel industry to continually evolve and develop to further capitalize on these opportunities.

By digitalizing the biodiesel production plants with smart management systems, predictive analytics and real-time data flow as well as predictive maintenance, biodiesel can be produced more efficiently and with higher quality while maintaining lower labor and equipment downtimes and reduced input factors, resulting in increased profit margin for producers. Due to continued improvements to production technology and new feedstocks coming onto the market, the biodiesel sector is better situated to meet increased demand with a cost-competitive supply and this trend is expected to continue.

Biodiesel Market Trends 2025

The 2025 biodiesel market is dynamic. There are trends likely to steer the biodiesel industry towards biodiesel from non-food feedstocks to overcome sustainability concerns and the food versus fuel debate. Further, waste feedstock such as used cooking oil, rendered animal fats and agricultural waste byproducts continue to become more popular for biodiesel production. By committing to circular economy principles and waste valorization, these initiatives also allow biodiesel to improve its sustainability profile while reducing its reliance on commodity crop markets.

Increasing biodiesel use by increasing blending mandates is the preferred policy in jurisdictions where governments signal the certain future increase in biodiesel demand by announcing future increases in the percentage of biodiesel included in diesel fuel, providing investment certainty to biodiesel producers to increase production capacity. A growing interest from the aviation industry to produce sustainable aviation fuels (SAFs) from the same feedstocks and production technologies offers a further opportunity and technology leap.

Technological developers with digitalization change biodiesel producers and suppliers. Solutions with advanced analytics, artificial intelligence, and the Internet of Things (IoT) are providing improvements within production efficiency, quality, and supply chains. Real time monitoring systems have enabled producers to optimize their performance. Digital technologies have also been used to provide transparency and increase efficiency in the biodiesel supply chain.

Traceability systems and sustainability certification systems are increasingly being required by consumers, regulators and others. Digital certification from the point of production (eg blockchain) may provide auditable chain of custody information including feedstock source, production methods and carbon intensity. Producers may receive higher prices for biodiesel with better sustainability profiles in part as a result of changing regulatory requirements.

Additionally, the trend towards increased levels of vertical integration and value chain partnerships has continued, with oil companies, agricultural processors and technology companies exploring partnerships to share technology, secure feedstock, and strategize distribution of advanced biofuels, thereby managing supply chain risk and capturing value at various points along the biodiesel supply chain. As long as public policies are favorable and can ensure access to feedstock, new investments will keep being made, and the industry will continue to grow.

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Industry Segmentation:

Segmentation by Feedstock:
• Vegetable Oils
• Animal Fats
• Others

Segmentation by Application:
• Fuel
• Power Generation
• Others

Segmentation by Type:
• B100
• B20
• B10
• B5

Segmentation by Production Technology:
• Conventional Alcohol Trans-esterification
• Pyrolysis
• Hydro Heating

Regional Insights:
• Asia Pacific
• North America
• Europe
• Latin America
• Middle East and Africa

Ask Our Expert & Browse Full Report with TOC & List of Figures: https://www.imarcgroup.com/request?type=report&id=1647&flag=E

Who are the key players operating in the industry?

The report covers the major market players, including:
• Archer Daniels Midland Company (ADM)
• Wilmar International Limited
• Renewable Energy Group Inc.
• Bunge Limited
• Cargill, Incorporated
• Neste Oyj
• Louis Dreyfus Company B.V.
• Biox Corporation
• Diester Industrie
• Biomass Technology Group (BTG) BV
• DuPont
• POET
• Verbio Vereinigte BioEnergie AG
• China Clean Energy, Inc.
• CropEnergies AG
• INEOS AG

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