Renewable Diesel Market is set to reach US$ 48.33 billion by 2032, North America leads the market with 46.5% market share. Market Demand, Trends, Tech & strategic partnership

Renewable Diesel Market size 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% during the forecast period 2025-2032.

Renewable Diesel Market growth is driven by stricter emission regulations, rising decarbonization goals, increasing availability of waste-based feedstocks, superior fuel performance, and growing adoption across transportation, power generation, and industrial sectors worldwide.

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United States: Key Industry Developments

✅ January 2026: EPA finalized Renewable Volume Obligations setting biomass-based diesel at 5.61 billion gallons for 2026, the largest year-over-year increase in RFS history, driving renewable diesel production to record levels.

✅ December 2025: Section 45Z tax credit guidance clarified, providing up to $1/gallon incentive for low-carbon renewable diesel, spurring idled biodiesel plants to restart and attracting new investments.

✅ October 2025: Phillips 66 expanded Rodeo facility to 50,000 bpd renewable diesel capacity using waste oils, while Marathon Petroleum brought Dakota Renewables online at 12,000 bpd.

Asia Pacific / Japan: Key Industry Developments

✅ January 2026: Japan's METI approved renewable diesel blending targets rising to 5% by 2028 under GX strategy, subsidizing imports and domestic production from used cooking oil.

✅ November 2025: ENEOS launched Japan's first commercial renewable diesel plant in Hokkaido with 20,000 kl/year capacity, targeting marine and trucking sectors for decarbonization.

✅ September 2025: Idemitsu Kosan partnered with TotalEnergies for renewable diesel supply chain, importing sustainable aviation fuel precursors while developing domestic HEFA technology.

Recent M&A activities:-
→ In August 2025, ReFuels N.V. (via RTFS / CNG Fuels minority share) acquired Bio Energie Holwerd and its biomethane production facility in Holwerd, Netherlands. This acquisition strengthens ReFuels' integrated clean fuels platform and enhances upstream fuel sourcing flexibility a move aligned with renewable fuels expansion including renewable diesel infrastructure. Date: 08 Aug 2025.

→ In June 2025, XCF Global Capital Inc. completed a business combination with Focus Impact BH3 Acquisition Company, formally closing this SPAC merger to accelerate its renewable fuels projects, including SAF and renewable diesel production capabilities near Reno, Nevada. Date: 16 Jun 2025.

→ In June 2025, Vegas Renewable Diesel acquired a Nevada renewable diesel refinery site intended to house the largest Western U.S. renewable diesel facility (100 million gal/month capacity). Date: June 2025.

→ In April-August 2025, Eazy Grease completed strategic acquisitions to expand its used cooking oil (UCO) collection network, including DHT Grease Solutions and Liquid Recovery Solutions, strengthening feedstock availability for biodiesel and renewable diesel producers. Date: August 05 & July 11, 2025.

Key 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.

Top 5 Key Players Analysis:-
Neste Corporation - Global leader in renewable diesel production with the largest production capacity and revenue among peers.

Diamond Green Diesel (DGD) - Largest renewable diesel producer in North America, a JV of Valero and Darling Ingredients with major annual output.

Valero Energy Corporation - Through its stake in DGD and refinery conversions, Valero drives significant renewable diesel supply and capacity growth.

Chevron Corporation - With its acquisition of Renewable Energy Group and expanding renewables portfolio, Chevron is a key North American producer.

Phillips 66 - Operates large renewable diesel facilities (e.g., Rodeo) and ranks among the major producers in the U.S. market.

Tech & Strategic Partnerships:-

1. CountryMark + Topsoe Renewable Diesel Production Tech (2025)
CountryMark (U.S. cooperative) partners with Topsoe to deploy HydroFlex® technology at its Indiana refinery for renewable diesel production.
This collaboration uses proven advanced hydrotreating tech to convert local soybean oil into renewable diesel, enhancing sustainability and supporting local agriculture.
The initiative expects to produce up to 250,000 barrels per year of renewable diesel.

2. Corteva + bp Biofuel Feedstock Joint Venture "EtlasTM" (Jan 2026)
Corteva Inc. and bp launched EtlasTM, a 50:50 joint venture focused on developing crop feedstocks (canola, sunflower, mustard) for sustainable fuels including renewable diesel and SAF.
Combines Corteva's seed technology with bp's refining expertise to build tailored biomass inputs for future renewable fuel production.
Aims to produce 1M metric tonnes of feedstock annually by mid-2030s, supporting large-scale renewable diesel supply.

3. Bayer + Neste Feedstock Development Collaboration (2025)
Bayer and Neste signed a Memorandum of Understanding (MOU) to scale winter canola as a biomass feedstock for renewable fuels like renewable diesel.
Partnership focuses on crop innovation and supply chain readiness to support feedstock sustainability and fuel decarbonization.
Bayer's future hybrid crops will strengthen renewable diesel feedstock resources while benefiting farm productivity.

4. Repsol + Bunge Advanced Feedstock & Production Partnership (Apr 2025)
Repsol teamed up with Bunge to process intermediate crops (camelina, safflower) into low-carbon oils for renewable diesel production.
This partnership expands the renewable feedstock pool in Europe and boosts processing technologies for future feedstock conversion pathways.
Focused on feedstock innovation and scalable supply chain integration.

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Market Drivers :-

Governments are tightening emission standards and implementing low carbon fuel mandates and blending requirements that directly elevate renewable diesel demand.

For example, mandates like California's Low Carbon Fuel Standard (LCFS) and the EU's Renewable Energy Directive (RED III) provide credits and incentives that improve project economics and hasten capacity expansions.

Fiscal incentives such as tax credits and subsidized production allowances are accelerating capacity additions in some regions boosting renewable diesel production capacity by 70%+ year-over-year.

Unlike biodiesel, renewable diesel requires no engine modifications and seamlessly integrates into current distribution systems a pragmatic transition path for fleet operators and refiners alike.

This characteristic enhances adoption across commercial transport, logistics, and heavy-duty vehicle sectors, which together accounted for more than 70% of total market utilization in 2024.

Renewable diesel delivers significant greenhouse gas (GHG) reductions compared to fossil diesel, helping corporates meet ESG and net-zero targets.

As carbon reporting becomes mandatory and carbon pricing introduced in more regions, renewable diesel conversion becomes a core element of decarbonization roadmaps.

Advanced hydrotreating processes are increasing yields and enabling the use of a broader range of feedstocks, including vegetable oils, waste oils, and animal fats.

Feedstock flexibility not only reduces input risk but also helps manage feedstock price volatility a historic challenge in renewables value chains.

Companies are also converting existing fossil refineries into renewable diesel hubs, maximizing infrastructure and minimizing stranded assets.

Regional Insights:-

1. North America
North America is the largest renewable diesel market, holding around 46.5% of the global share due to strong policy support, investment in production infrastructure, and supportive regulations.
The United States and Canada lead adoption, driven by mandates like the Renewable Fuel Standard (RFS) and low-carbon fuel incentives that boost demand and production capacity.

2. Europe
Europe typically accounts for approximately 29.4% of the renewable diesel market, supported by stringent emissions regulations and renewable energy directives across the EU.
Germany, the UK, and France are key contributors, with renewable diesel used extensively in transportation to meet decarbonization targets.

3. Asia Pacific
The Asia Pacific region holds roughly 25.1% of global market share and is one of the fastest-growing regions due to rising energy demand and sustainability initiatives in China, Japan, and India.

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Market Segmentation

By Feedstock:
Animal fats and vegetable oils are the primary raw materials due to wide availability and cost efficiency, while other feedstocks include used cooking oil and waste oils supporting sustainability goals.

By Application:
Transportation dominates the market as renewable diesel is widely used in trucks, buses, and fleets to reduce carbon emissions without engine modification.

FAQ'S:-

Q1. What is renewable diesel?
Renewable diesel is a bio-based fuel made from waste oils and fats that fully replaces petroleum diesel.

Q2. Why is renewable diesel demand growing?
Demand is rising due to low carbon emissions, government incentives, and increasing use in transportation and logistics.

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