Biodiesel Market Size and Forecast 2025–2033

The global biodiesel market is poised for strong expansion, projected to reach US$ 70.61 billion by 2033, up from US$ 41.62 billion in 2024, registering an impressive CAGR of 6.05% between 2025 and 2033. Growing demand for renewable and sustainable fuel alternatives, robust government mandates promoting biofuel usage, and increasing corporate and consumer awareness regarding greenhouse gas reduction are driving market momentum. As countries intensify their efforts toward decarbonization and cleaner energy transition, biodiesel is emerging as a vital component of the global renewable fuel matrix.

Biodiesel Industry Overview

Biodiesel is a renewable, biodegradable fuel produced primarily from vegetable oils, animal fats, and recycled cooking greases through a chemical process known as transesterification, which converts fats and oils into fatty acid methyl esters (FAME). It serves as a direct substitute or blend component for petroleum diesel and can be used in existing diesel engines without significant modifications, making it one of the most practical and scalable renewable fuel solutions.

Environmental advantages remain the most influential growth catalyst. With escalating climate change concerns, deteriorating urban air quality, and dependence on fossil fuels, biodiesel offers a pathway toward reduced carbon emissions, improved air quality, and enhanced energy security. Its biodegradability, lower sulfur content, and compatibility with diesel infrastructure further strengthen its adoption in transportation, industrial machinery, power generation, and marine applications.

Government incentives, blending mandates, tax credits, and sustainability frameworks across the U.S., Europe, Asia-Pacific, and Latin America are ensuring continuous biodiesel production expansion and technological innovation. Additionally, advancements in waste-to-biofuel technologies and diversification of feedstock sources are expected to enhance production efficiency and cost competitiveness in the coming years.

Download Free Sample Report:https://www.renub.com/request-sample-page.php?gturl=biodiesel-market-competitor-analysis-p.php

Key Market Growth Drivers

Rising Global Focus on Renewable and Low-Carbon Energy

The accelerating global shift toward renewable energy remains the foremost driver. Countries worldwide are implementing strict environmental policies and carbon reduction targets aligned with frameworks such as the Paris Climate Agreement. Biodiesel produces significantly less carbon dioxide, hydrocarbons, and particulate matter compared to petroleum diesel, positioning it as a crucial renewable fuel in transportation decarbonization strategies. Industries and fleet operators are increasingly integrating biodiesel to reduce their carbon footprints and comply with sustainability regulations.

Strong Government Policies and Biofuel Mandates

Government support plays a critical role in fueling biodiesel adoption. Numerous countries have introduced biofuel blending mandates, subsidies, tax incentives, and renewable fuel standards to encourage production and consumption. These policies support investment in biodiesel plants, improve supply chain stability, stimulate agricultural feedstock production, and promote energy independence. Favorable legislative frameworks in Europe, the United States, Brazil, Indonesia, and other key markets continue to strengthen global biodiesel infrastructure and demand.

Advancements in Feedstock Availability and Production Technology

Technological innovations in biodiesel processing, including improved transesterification efficiency, enhanced catalytic processes, and utilization of waste oils and fats, are expanding production capabilities. Upgraded facilities enable processing of multiple feedstocks, reducing dependency on conventional oil crops and improving sustainability. Growing investment in circular economy initiatives encourages the conversion of waste cooking oils and industrial by-products into biodiesel, supporting both waste management and renewable energy objectives.

Increasing Corporate Sustainability Commitments

Businesses worldwide are integrating ESG (Environmental, Social, and Governance) objectives into operations. Logistics companies, manufacturing firms, maritime operators, and public transport sectors are increasingly turning to biodiesel as a cost-effective pathway toward low-carbon operations. As technological advancements lower production costs further, biodiesel is expected to play an even greater role in global renewable fuel adoption.

Challenges in the Global Biodiesel Market

Feedstock Price Volatility and Availability

Feedstock remains the most significant cost component of biodiesel production. Fluctuations in the prices of vegetable oils, animal fats, and agricultural commodities can directly impact biodiesel pricing and market stability. Competition with food production and agricultural market uncertainties create supply imbalances in some regions. Ensuring sustainable and adequate feedstock sourcing remains a strategic priority for producers.

Competition from Other Renewable Fuels

The biodiesel industry faces competition from renewable diesel (HVO), electric mobility solutions, hydrogen fuel, and natural gas alternatives. While biodiesel benefits from cost-efficiency and infrastructure compatibility, long-term competitiveness will depend on technological enhancements, supportive regulations, and global fuel strategy diversification.

Leading Companies in the Global Biodiesel Market

Archer Daniels Midland Company

Archer Daniels Midland Company (ADM) is one of the world’s largest agribusiness and biodiesel producers, leveraging vast grain processing, storage, transportation, and energy infrastructure to deliver large-scale biofuel solutions. Its strong global supply chain, advanced refining technology, and diversified agricultural portfolio enhance production capability and sustainability alignment.

FutureFuel Corporation

FutureFuel manufactures and supplies both specialty chemicals and biodiesel products. With strong investment in innovation and flexible biodiesel blending capabilities, FutureFuel continues to play a major role in addressing rising renewable fuel demand while serving industrial and agricultural customers.

Renewable Energy Group, Inc. (Chevron Renewable Energy Group)

A key subsidiary of Chevron, Renewable Energy Group produces advanced bio-based diesel fuels under its EnDura Fuels portfolio. Its diversified renewable fuel product line includes biodiesel, renewable naphtha, glycerin, propane, and blended low-carbon heating fuels, supporting industries in reducing lifecycle emissions and achieving sustainability objectives.

Bunge Global SA

Bunge Global SA is a global agribusiness giant involved in oilseed processing, edible oil production, and renewable fuel feedstock supply. Its vertically integrated operations, extensive customer base, and expanding renewable initiatives position it as an essential contributor to global biodiesel production.

Wilmar International Limited

Wilmar International operates a globally integrated agricultural and bioenergy platform, producing biodiesel from sustainable feedstocks such as palm oil derivatives and other vegetable oils. Its vast processing network and strong presence across Asia-Pacific, Europe, and Africa solidify its role in the biodiesel value chain.

Notable Market Developments

Recent years have witnessed impactful developments:

·        Shell launched Shell Renewable Diesel in Hong Kong in September 2025, offering commercial fleets a low-carbon fuel alternative using Hydrotreated Vegetable Oil, capable of reducing lifecycle CO₂ emissions by up to 90%.

·        Cargill commissioned a $150 million waste-to-biodiesel plant in Belgium in June 2022, capable of converting 35 million gallons of waste oils annually into advanced biodiesel for maritime and trucking applications.

·        Greenergy upgraded its U.K. and Amsterdam biodiesel plants in January 2024, improving feedstock flexibility and boosting capacity by 25%, supporting Europe’s growing low-carbon fuel demand.

·        Louis Dreyfus Company and Global Clean Energy Holdings renewed a 10-year agreement in March 2025 to expand Camelina cultivation for sustainable biofuel feedstock, reinforcing agricultural innovation in renewable energy.

Company Strengths in the Biodiesel Industry

Valero Energy Corporation benefits from extensive refining infrastructure and vertically integrated renewable fuel capabilities, supported by strategic partnerships such as Diamond Green Diesel. Ag Processing Inc. (AGP) enjoys strong feedstock security through agricultural integration, leveraging its cooperative structure to ensure sustainable, reliable biodiesel production.

Sustainability Commitment Across the Biodiesel Market

Companies such as China Clean Energy, Inc. and TotalEnergies SE are reinforcing renewable transformation strategies, focusing on waste-to-fuel innovation, low-carbon fuel expansion, circular economy integration, emissions reduction, and alignment with global climate targets.

Market Segmentation and Analytical Coverage

The biodiesel market can be examined through historical trends, forecast projections, market share distribution, product analysis, sustainability metrics, strategic SWOT assessments, revenue insights, partnerships, and investment strategies. Leading companies covered include Archer Daniels Midland Company, FutureFuel, Neste Corporation, Renewable Energy Group, Bunge Global SA, Wilmar, Shell, Cargill, Valero, Ag Processing, Greenergy, China Clean Energy, Louis Dreyfus Company, TotalEnergies SE, and Eni S.p.A.

Future Outlook for the Biodiesel Market

The biodiesel market is expected to strengthen as nations accelerate carbon neutrality commitments, renewable fuel mandates intensify, and businesses increasingly prioritize sustainability integration. Advancements in waste-based biodiesel, expanding infrastructure, evolving regulatory support, and improving technological efficiency will shape the industry’s future trajectory. With expanding industrial adoption, transportation sector integration, and government backing, biodiesel is set to remain a cornerstone of the global renewable energy landscape from 2025 to 2033 and beyond.