Refuse-Derived Fuel (RDF) Market

Refuse-Derived Fuel (RDF) Market Outlook (2025 to 2035)

The global refuse-derived fuel (RDF) market is projected to increase from USD 5.4 billion in 2025 to USD 11.7 billion in 2035, with a CAGR of 8.0%, driven by rising waste generation and stringent landfill regulations, which are driving the adoption of refuse-derived fuel as a sustainable waste management solution. Their use makes them ideal for energy-intensive industries seeking cost-effective, lower-emission alternatives to conventional fossil fuels.

What are the Drivers of Refuse-Derived Fuel (RDF) Market?

The growth of the refuse-derived fuel (RDF) market is largely driven by increasing global waste volumes and tightening environmental regulations. With rapid urbanization and industrialization, municipal solid waste (MSW) generation has surged, leading to an urgent need for sustainable waste management solutions.

RDF provides an effective alternative by converting non-recyclable waste into usable fuel, significantly reducing the amount of waste sent to landfills. Governments around the world are enforcing stricter landfill diversion targets and emissions limits, making refuse-derived fuel an attractive compliance tool that aligns with both waste reduction and clean energy goals.

Another major driver is the global shift toward renewable and low-carbon energy sources. As countries strive to meet climate targets and reduce reliance on fossil fuels, refuse-derived fuel has emerged as a cost-effective and lower-emission alternative, especially for industries with high energy demands.

Sectors such as cement manufacturing, power generation, and district heating are increasingly utilizing refuse-derived fuel to replace coal and other fossil fuels. Refuse-derived fuel offers a consistent calorific value and burns cleaner, enabling industries to reduce operational costs while minimizing their environmental impact.

Technological advancements have further accelerated the adoption of refuse-derived fuel. Innovations in sorting, mechanical-biological treatment (MBT), and automated material recovery facilities (MRFs) have improved the quality, efficiency, and scalability of refuse-derived fuel production. These technologies enhance the extraction of high-calorific waste fractions, ensuring consistent fuel output that meets the standards of industrial users.

Supportive government policies and financial incentives are playing a key role in driving refuse-derived fuel market growth. Subsidies, feed-in tariffs, tax incentives, and renewable energy credits are making refuse-derived fuel projects more financially attractive.

These incentives reduce capital investment risks and foster private-sector involvement in refuse-derived fuel production and infrastructure development. Combined, these factors are creating a robust ecosystem for refuse-derived fuel adoption across both developed and emerging economies.

What are the Regional Trends of Refuse-Derived Fuel (RDF) Market?

Europe dominates the refuse-derived fuel market, driven by stringent environmental regulations, mature waste management systems, and a strong focus on circular economy principles. Countries such as Germany, the U.K., Sweden, and the Netherlands have adopted landfill bans and aggressive waste diversion targets, encouraging refuse-derived fuel production and usage.

The European cement industry is a significant consumer of refuse-derived fuel, often using it to replace up to 80% of the fossil fuel input in kilns. EU initiatives, such as the Green Deal and waste-to-energy subsidies, support market growth by incentivizing RDF-based energy generation.

The Asia Pacific is witnessing rapid growth in the refuse-derived fuel market, driven by rising urbanization, increasing waste generation, and growing energy demand. Countries such as China, India, Japan, and South Korea are investing heavily in waste-to-energy (WtE) infrastructure to address landfill challenges and concerns about energy security. India, for instance, is promoting the use of refuse-derived fuel in cement kilns under its Swachh Bharat and circular economy missions.

However, inconsistent waste segregation and limited processing facilities in some parts of the region pose challenges, though government-led public-private partnerships are beginning to address these gaps.

In the U.S. and Canada, the adoption of refuse-derived fuel is gradually increasing, driven by industrial decarbonization goals and landfill constraints. While the region lacks the regulatory stringency of Europe, certain states and provinces are supporting refuse-derived fuel through renewable portfolio standards, landfill diversion mandates, and green energy credits.

The cement and power sectors are key users of refuse-derived fuel, and new facilities are being developed, particularly near urban centers where waste volumes are high and landfill options are shrinking.

In the Middle East, the refuse-derived fuel market is still in its early stages, with limited production capacity and infrastructure. However, increasing pressure to manage urban waste, combined with efforts to improve energy access and sustainability, is prompting interest in refuse-derived fuel solutions.

The UAE is exploring refuse-derived fuel and waste-to-energy as part of its long-term waste management and energy diversification strategies.

What are the Challenges and Restraining Factors of Refuse-Derived Fuel (RDF) Market?

The growth of the refuse-derived fuel (RDF) market faces significant challenges, with one of the most critical being the lack of standardized regulations and inconsistent fuel quality control, particularly in developing regions. While Europe has well-defined classifications and emission standards for refuse-derived fuel, other parts of the world still lack clear regulatory frameworks.

This regulatory inconsistency makes it difficult for refuse-derived fuel producers to ensure consistent fuel quality, which discourages industrial end-users such as cement kilns and power plants, from switching from traditional fossil fuels to RDF, as it introduces operational uncertainty and risk.

Another major barrier is the limited infrastructure for proper waste segregation and processing. Effective refuse-derived fuel production requires a well-established system of municipal waste segregation, along with advanced material recovery and mechanical-biological treatment facilities. In many developing countries, municipal solid waste is collected in a mixed form, resulting in low-quality refuse-derived fuel with a high moisture content and poor calorific value.

Without sufficient investment in pre-processing technologies such as shredding, drying, and pelletizing, the fuel fails to meet industrial standards, limiting its adoption and reducing its economic feasibility.

High capital costs and low short-term profitability further impede market growth. The establishment of refuse-derived fuel processing facilities requires substantial upfront investment, which is often difficult to justify without strong government incentives or long-term industrial demand contracts.

Moreover, refuse-derived fuel has relatively low energy density, making its transport over long distances costly and inefficient. In regions where cheap fossil fuels are still readily available, refuse-derived fuel often struggles to compete economically without sustained policy support, subsidies, or green energy mandates.

Country-Wise Outlook

U.S. Refuse-Derived Fuel (RDF) Market sees Growth Driven by Stringent Regulatory Standards

The Refuse-Derived Fuel (RDF) market in the U.S. is witnessing steady growth, driven by the dual imperatives of sustainable waste management and industrial decarbonization. A key driver for refuse-derived fuel adoption in the U.S. is the increasing regulatory emphasis on diverting municipal solid waste (MSW) from landfills.

Federal and state agencies, particularly the U.S. Environmental Protection Agency (EPA), have been promoting sustainable materials management and waste-to-energy initiatives to address landfill overcapacity and reduce methane emissions. Refuse-derived fuel plays a crucial role in this strategy by enabling the conversion of non-recyclable waste into usable fuel, thereby supporting landfill diversion goals and contributing to broader sustainability targets.

Another major factor driving market growth is the increasing demand from energy-intensive industries, such as cement manufacturing, power generation, and district heating. These sectors are under pressure to reduce their carbon footprints and enhance fuel efficiency.

Refuse-derived fuel presents a viable alternative to coal, offering lower emissions and a competitive calorific value. Cement kilns in particular are increasingly using refuse-derived fuel for co-firing, which aligns with carbon reduction commitments and cost optimization strategies. The industrial sector’s decarbonization drive is expected to further boost refuse-derived fuel demand in the coming years.

China witnesses Rapid Market Growth Backed by Rapidly Developing Clean Energy Infrastructure

A strong regulatory push for landfill reduction and renewable energy is driving the adoption of refuse-derived fuel in China. Provincial and national environmental policies are increasingly focused on diverting municipal solid waste (MSW) from landfills through waste-to-energy (WtE) measures, including the production of refuse-derived fuel.

Municipalities are investing in mechanical-biological treatment (MBT) and material recovery facilities (MRFs), which enable the production of higher-quality refuse-derived fuel. Such strategic infrastructure improvements encourage both municipal and industrial stakeholders to adopt refuse-derived fuel solutions.

Key demand centers for refuse-derived fuel in China include energy-intensive sectors like cement manufacturing, industrial boilers, and thermal power plants. Cement plants, in particular, leverage refuse-derived fuel to lower costs and reduce CO₂ emissions, aligning with national decarbonization efforts.

Japan sees Strong Environmental Policies Fuels Demand for Refuse-Derived Fuel

The Refuse-Derived Fuel (RDF) market in Japan is experiencing steady growth, supported by strong environmental policies and investments in advanced waste-to-energy infrastructure.

A major growth driver is Japan’s extensive network of over 1,500 municipal incinerators, which are increasingly being retrofitted and integrated with refuse-derived fuel co-firing systems. These upgrades enable facilities to substitute parts of their energy mix with refuse-derived fuel, often derived from mechanically separated municipal waste, thereby reducing their reliance on imported fossil fuels while addressing landfill constraints. This shift aligns with national waste diversion goals and regional emissions targets under Japan’s Green Growth Strategy.

Technological advancements are also fueling market expansion. Investments in mechanical-biological treatment (MBT), drying, pelletizing, and AI-enhanced sorting systems have improved the consistency and calorific value of refuse-derived fuel products. These improvements make refuse-derived fuel more attractive and reliable for energy-intensive users, such as cement plants and power utilities, which value both fuel quality and operational certainty.

Category-wise Analysis

High-Grade (>10 MJ/kg) to Exhibit Leading by Fuel Type

High-grade (>10 MJ/kg) refuse-derived fuel (RDF) segment dominates in terms of revenue share. This dominance is largely attributed to its superior calorific value and greater energy efficiency, making it highly suitable for industrial applications such as cement kilns, power generation, and combined heat and power (CHP) plants.

Industries with high energy demands prefer high-grade refuse-derived fuel due to its ability to serve as a reliable substitute for fossil fuels, such as coal, while also reducing greenhouse gas emissions. The increasing focus on industrial decarbonization and strict emission regulations across regions such as Europe, Japan, and the U.S. is further strengthening the demand for high-grade refuse-derived fuel.

The low-grade (<10 MJ/kg) refuse-derived fuel (RDF) segment is expected to witness the fastest growth rate over the forecast period. This growth is driven by rising waste volumes in emerging economies where waste segregation infrastructure is still developing, making low-grade refuse-derived fuel more accessible and easier to produce.

Municipal waste management systems in countries like India, Brazil, and Southeast Asian nations are increasingly adopting low-grade refuse-derived fuel as a transitional solution for waste-to-energy conversion, particularly in local or regional power generation facilities.

Combined Heat and Power (CHP) to Exhibit Leading by Application

Cement plants represent the dominant application segment, accounting for the largest share of refuse-derived fuel consumption globally. This dominance is driven by the cement industry's significant energy requirements and its ability to use refuse-derived fuel as a substitute for coal and petroleum-based fuels without compromising production quality. Many cement kilns are designed to co-fire refuse-derived fuel with traditional fuels, and the high operating temperatures facilitate the complete combustion of waste-derived fuel, thereby minimizing harmful emissions.

The fastest-growing application segment is combined heat and power (CHP) plants, driven by increasing adoption of decentralized energy systems and efforts to improve overall energy efficiency. CHP systems that utilize refuse-derived fuel can simultaneously generate electricity and useful thermal energy from a single fuel source, making them highly efficient and attractive for urban and industrial energy needs. As governments and municipalities seek to enhance energy resilience and reduce dependency on fossil fuels, particularly in regions like East Asia and Eastern Europe, the deployment of RDF-fed CHP units is accelerating.

Mechanical Biological Treatment (MBT) to Exhibit Leading by Processing Method

The Mechanical Biological Treatment (MBT) segment holds the largest market share among processing methods. MBT is widely adopted due to its comprehensive approach that combines mechanical sorting of municipal solid waste with biological stabilization of the organic fraction. This method efficiently reduces the biodegradable content of waste, lowers moisture levels, and produces a relatively high-calorific refuse-derived fuel suitable for industrial applications, such as cement kilns and power plants. The dominance of MBT is particularly evident in Europe, where strict landfill directives and environmental regulations encourage the diversion of biodegradable waste from landfills.

The fastest-growing processing method is Mechanical Heat Treatment (MHT) with sterilization, driven by the rising demand for higher-quality, more hygienic refuse-derived fuel in both developed and emerging markets. This method uses heat and pressure to sterilize waste, reducing pathogens and producing a cleaner, drier, and more homogeneous refuse-derived fuel product. The resulting fuel has improved combustion characteristics and is particularly well-suited for use in gasification, pyrolysis systems, and advanced CHP plants. The growth of this segment is driven by increasing concerns about public health, waste traceability, and the demand for high-calorific refuse-derived fuel to support advanced thermal treatment technologies.

Pellets to Exhibit Leading by Component

Pellets account for the largest share in the component segment due to their uniformity, ease of handling, and consistent performance across applications. Their high bulk density makes them ideal for efficient storage, transportation, and processing, particularly in high-volume manufacturing environments such as the automotive, packaging, and consumer goods industries.

Fluff is witnessing the fastest growth due to increasing demand in absorbent hygiene products, insulation, and cushioning applications. Its lightweight, soft texture and absorbent properties make it suitable for diapers, sanitary products, and medical supplies. As sustainability becomes a focus, recycled fluff is also gaining traction across global markets.

Competitive Analysis

The Refuse-Derived Fuel (RDF) market is becoming increasingly competitive, with a mix of global leaders and regional players competing across the value chain. Companies benefit from strong government support, well-established waste management networks, and partnerships with cement manufacturers and power utilities.

Their integrated operations, spanning waste collection, sorting, refuse-derived fuel production, and fuel distribution, allow them to offer cost-efficient, reliable fuel to industrial clients while maintaining quality and regulatory compliance.

A key competitive strategy among market leaders is the integration of technological innovation and process optimization. Players like SUEZ and Veolia are investing in AI-driven sorting systems, real-time calorific monitoring, and modular pelletizing technologies to enhance the consistency and usability of refuse-derived fuel. These innovations not only enhance product quality but also reduce environmental impacts and operating costs.

Many companies are forming long-term agreements with cement plants and industrial furnaces to ensure stable demand and secure offtake arrangements. Additionally, some firms are vertically integrating into the refuse-derived fuel supply chain, collaborating with equipment manufacturers or acquiring processing facilities to increase control over production and quality.

The refuse-derived fuel market is also witnessing the emergence of new entrants and niche players, particularly in regions such as the Asia Pacific and Latin America. These companies often focus on specialized technologies such as biodrying, waste gasification, or AI-enabled material recovery. Startups and equipment providers, such as Andritz Mewa and Hitachi Zosen, are supporting this innovation trend by supplying high-performance machinery for refuse-derived fuel processing.

Meanwhile, companies such as Enerkem are exploring advanced RDF-to-fuel conversion pathways, including syngas and biofuels, adding a new dimension to competition and technology diversification.

Key players in the refuse-derived fuel industry include SUEZ Recycling and Recovery UK Ltd., Renewi, Biffa, Country Style Recycling Limited, EcoUrja, FCC Austria Abfall Service AG, Estre Ambiental Inc., Veolia, Carley Group Plc, Mion Ventoltermica Depurazioni S.p.A., Tana Oy, Andritz Mewa GmbH, and other notable companies.

Recent Development

• In March 2025, the RDF Industry Group (RDFIG), representing the UK's Refuse-Derived Fuel sector, expanded its membership by welcoming Oakleaf Recycling Ltd. and Brüning Group. This growth reflects the increasing industry-wide coordination and collaboration within the RDF sector, signaling a stronger collective effort to address market challenges and opportunities.

(Source: https://www.rdfindustrygroup.org.uk/2025/03.)

• In February 2025, an innovative startup formed through a collaboration between India and the UK unveiled a patented catalytic pyrolysis technology. This groundbreaking technology is designed to convert difficult-to-recycle materials such as non-recyclable plastics, refuse-derived fuel (RDF), and biomass into valuable resources like biofuel, green coal, and carbon-sequestering biochar.

(Source: https://een.ec.europa.eu/partnering-opportunities/indian-company-converting-non-recyclable-plastics-rdf-biomass-biofuel-and)

Segmentation of Refuse-Derived Fuel (RDF) Market

• By Fuel Type :

  • High Grade (>10 MJ/kg)
  • Low Grade (<10 MJ/kg)

• By Application :

  • Cement Plants
  • Lime Plants
  • Coal-fired Power Plants
  • Combined Heat & Power (CHP)
  • Industrial Furnaces
  • Gasification Plants
  • Pyrolysis Systems

• By Processing Method :

  • Mechanical Biological Treatment (MBT)
  • Mechanical Heat Treatment (MHT)
  • Mechanical Heat Treatment with Sterilization

• By Component :

  • Pellets
  • Bales
  • Fluff

• By Region :

  • North America
  • Latin America
  • Western Europe
  • Eastern Europe
  • East Asia
  • South Asia & Pacific
  • Middle East & Africa