Biodiesel Market

Biodiesel Market Outlook (2024 to 2034)

The global biodiesel market size is forecasted to reach a value of US$ 226.6 billion by the end of 2034, up from US$ 116.3 billion in 2024. Worldwide demand for biodiesel is forecasted to increase at a CAGR of 6.9% through 2034.

Biodiesel is highly sought after in the automotive industry due to its lower GHG emissions. Its demand in the United States is projected to grow at a significant pace over the forecast period, given the country is one of the largest soy producers where soy is used as feedstock for biodiesel production post-crushing.

• In 2019, soybean oil was the predominant feedstock for biodiesel production, accounting for US$ 83.3 billion, followed by corn oil and canola oil.

Growing inclination toward replacing fossil fuels, which contribute to higher GHG emissions, with biofuel and other renewable and biodegradable resources is contributing to the expansion of the biodiesel market size. Rising demand for environmentally friendly and GHG emission-reducing gas is projected to drive biodiesel market growth. Government assistance such as subsidies and mandates indicates the market’s continued expansion worldwide during the forecast period.

Report Attributes	Details
Biodiesel Market Size (2024E)	US$ 116.3 Billion
Projected Market Value (2034F)	US$ 226.6 Billion
Global Market Growth Rate (2024 to 2034)	6.9% CAGR
China Market Value (2034F)	US$ 31.9 Billion
Canada Market Growth Rate (2024 to 2034)	5% CAGR
North America Market Share (2024E)	21.6%
East Asia Market Value (2034F)	US$ 55.7 Billion
Key Companies Profiled	Bunge Ltd. Cargill Inc. Neste Oyj Wilmar International Ltd. Renewable Energy Group Inc. Louis Dreyfus Company BIOX Corporation Emami Group

What are the Key Biodiesel Market Trends Benefitting Manufacturers?

“Government Regulations and Tax Incentives Supporting Use of Biodiesel”

Market growth is driven by increasing environmental awareness and the desire for energy self-sufficiency. Biodiesel is a recyclable fuel that presents a cleaner alternative for transportation. Its domestic production also promotes market growth by reducing reliance on imported petroleum. Government regulations and tax incentives are encouraging and supporting the use of biodiesel by driving the market growth over the projected period.

Government-enacted laws and policies have opened up opportunities for exports, feedstock development, and the production of related products. Variable petrochemical reserves on global oil rigs are projected to boost biodiesel consumption over the forecast period. Petroleum reserves are estimated to be exhausted by 2050.

What are the Current Obstacles Impacting Biodiesel Sales Growth?

“Limited Agricultural Land Availability and Increasing Demand for Oil and Fats”

Biodiesel production faces potential obstacles due to limited agricultural land, increasing demand for oil and fats, and a growing population. Market growth is projected to be negatively affected by various regulations, restrictions, and fluctuations in crude oil prices. A significant challenge for the market is the high operational costs associated with biodiesel, which could further inhibit market growth.

Use of biodiesel B20 blends when combined with diesel engine oil affects performance and shortens the oil drain intervals on diesel engines. Some engine manufacturers limit the use of biodiesel in specific applications to prevent any potential negative effects on the engine over its lifespan and to ensure compliance with the manufacturer’s guidelines.

Country-wise Insights

Fact.MR, a market research and competitive intelligence provider, through its newly published analysis, asserts that East Asia is projected to hold a 24.6% share of the global market by 2034. Key market players are collaborating with regional market players for the efficient production of biodiesel worldwide.

What is Driving Steady Market Growth in the United States?

“Intense Research and Development Activities Leading to Innovations in Biodiesel Production”

Attribute	United States
Market Value (2024E)	US$ 18 Billion
Growth Rate (2024 to 2034)	4.9% CAGR
Projected Value (2034F)	US$ 29.1 Billion

The United States is projected to account for 71.7% of the North American biodiesel market share by 2024 end. Biodiesel is one of the most widely used fuels globally, with the United States leading as its top producer. Factors such as the government’s Renewable Fuel Standard program and easy accessibility to resources have contributed to market growth.

• The United States Department of Agriculture has reported that farms spanning 1,000 acres can generate an additional profit of US$ 32,823 from biodiesel.

The market for biodiesel is projected to expand further due to intense research and development activities and the added benefits that incentivize fuel production. Scientists in the United States are innovating new techniques to produce biodiesel from food waste.

• For example, a multidisciplinary team of scientists at the Worcester Polytechnic Institute is investigating methods to utilize food waste to replace oil-based diesel with a renewable and affordable alternative.
• According to the Environmental Protection Agency, approximately 2 tons of household food was discarded in landfills or combustion facilities in the United States in 2018. Besides contributing to climate change, food waste also releases methane when it is deposited in landfills.

Which Factors are Supporting Biodiesel Production in China?

“Growing Emphasis on Converting Food Waste into Biodiesel”

Attribute	China
Market Value (2024E)	US$ 14.8 Billion
Growth Rate (2024 to 2034)	8% CAGR
Projected Value (2034F)	US$ 31.9 Billion

Performance of the market in China is influenced by several key factors. Government support and the National Development and Reform Commission's (NDRC) clear plan for biodiesel production and relevant feedstock harvesting plays a crucial role. The market is also supported by ongoing research and development efforts aimed at solidifying production technologies.

Identification and procurement of key organic sources for production are vital. The global biodiesel market trend toward low-carbon development and the link between biodiesel and carbon reduction has also contributed to the market growth. Scientists in China are exploring innovative methods such as converting food waste into biodiesel which not only provides a renewable energy source but also addresses environmental concerns.

Category-wise Insights

Canola oil feedstock is estimated to claim a leading market share of 22.5% in 2024. Canola oil sales are forecasted to generate US$ 51.7 billion worth of revenue by the end of 2034, up from US$ 26.2 billion in 2024.

How are Biodiesel Manufacturers Benefitting from Use of Soybean as Feedstock?

“Greater Affordability of Soybean Oil Compared to Other Vegetable Oils”

Attribute	Soybean
Segment Value (2024E)	US$ 15.2 Billion
Growth Rate (2024 to 2034)	6.7% CAGR
Projected Value (2034F)	US$ 29.2 Billion

Biodiesel manufacturers in the United States predominantly use soybean oil as their main vegetable oil source, and this oil is offering promising growth opportunities for biodiesel producers. The low cost of soybean oil is a key factor driving its extensive use in biodiesel production. The use of low linolenic (LL) soybean oil in biodiesel has led to increased production.

LL soybean oil, with its superior oxidative stability, enables the production of high-quality biodiesel. Soybean oil occupies a leading share of the overall renewable feedstock consumption for biodiesel synthesis. This dominance is attributed to the technical expertise of manufacturers and the high oil yield offered by these products.

Why is Biodiesel Being Extensively Used as Fuel?

“Strict Government Regulations Aimed at Reducing Emissions Boosting Demand for Biofuels”

Attribute	Fuel
Segment Value (2024E)	US$ 14.1 Billion
Growth Rate (2024 to 2034)	7.6% CAGR
Projected Value (2034F)	US$ 29.2 Billion

Studies suggest that fuel is set to become a significant application segment for biodiesel. The extensive use of biodiesel as fuel in various domestic and household applications is contributing to market growth. Commercial vehicles are projected to increasingly adopt clean fuel as a substitute for crude oil.

The growing number of pollutants released by vehicles coupled with rising environmental concerns and global warming are boosting demand for biofuel. As government regulations tighten and the demand for cleaner fuels increases, the market for alternative fuels is projected to expand.

Competitive Landscape

Market growth is being driven by several factors, including evolving consumer preferences, technological advancements, and global economic conditions. Several key players in the biodiesel market are Bunge Ltd., Cargill Inc., Neste Oyj, Wilmar International Ltd., Renewable Energy Group Inc., Louis Dreyfus Company, BIOX Corporation, and Emami Group.

• In 2022, Fluor Corporation received a contract for front-end engineering and detailed EPC services on a reimbursable basis from Imperial. This contract is part of an imperial plan to establish a top-tier renewable diesel complex at the Strathcona refinery in Canada.
• In 2022, SLD Pumps & Power (SLD) made a significant change by opting for biodiesel fuel to power its equipment fleet across the country. This switch is projected to reduce the usage of around 1 million liters of mineral diesel, which is known for its high pollution levels every year.

Key Segments of Biodiesel Market Research

• By Feedstock :

  • Soybean Oil
  • Distillers Corn Oil
  • Canola Oil
  • Yellow Grease
  • Animal Fat

• By Application :

  • Fuel
  • Agriculture
  • Power Generation

• By Region :

  • North America
  • Latin America
  • Europe
  • East Asia
  • South Asia & Oceania
  • Middle East & Africa