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Base Year: 2024
Companies covered: 12
Tables & Figures: 145
Countries covered: 19
Pages: 220
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Hydrotreated Vegetable Oil Market
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Hydrotreated Vegetable Oil Market Size
The global hydrotreated vegetable oil market was valued at USD 27.2 billion in 2024, with expectations to reach USD 92.1 billion by 2034, growing at a CAGR of 13%.
Hydrotreated Vegetable Oil (HVO) is obtained from vegetable oils, animal fats and used oils and manufactured through hydrogenation process. In contrast to traditional biodiesels, HVO is chemically changed with a hydro processing catalyst that strips oxygen from the oil, thus, HVO fuel is produced. The result is a petroleum diesel-like product with a cleaner burning process, zero sulfur emission, high energy density, and can be combusted in diesel engines without additional changes to the machinery.
One of the most significant reasons for HVO's increased value within the market is the increase in demand for renewable sources of energy. Efforts are being made in North America and Europe to limit greenhouse gases emissions using biofuels and stricter government policies, and policy makers are broadening sustainability frameworks. Furthermore, increased market growth is attributed to a change in fuels way of course in aviation, and heavy-duty shipping. Advanced hydrogenation technologies, along with increased construction investment in renewable diesel power facilities, are improving the prospects for HVO in the market.
An additional important driver of growth is the increasing interest from the automotive industry. It has advantages which include reduced greenhouse gases, better engine efficiency, and incorporation into the already existing fuel structure. In addition, several countries are encouraging the use of renewable diesel through grants and blending obligations which fuels the growth of the market. As issues of sustainability take centre stage, the HVO market is expected to grow rapidly in the forecasted years.
For instance, HVO is also approved for use as aviation (jet) fuel under the ASTM D7566-14 standard. This updated version of the standard allows for the inclusion of approximately 50% bio-based components, including HVO, to be blended with conventional jet fuel.
Hydrotreated Vegetable Oil Market Trends
The Hydrotreated Vegetable Oil (HVO) market is poised for sustained growth due to advanced refining technology investments and increased production capacity. The integration of major energy companies into HVO renewable portfolios is driving the construction of low-carbon fuels plants. The market is also being boosted by the widened non-food biomass, algae, and used oil feedstock options which ensures a cheaper and more sustainable supply chain.
Carbon emission taxation and renewable fuel obligations globally are forcing refineries to improve fuel quality and production efficiency. New methods of economically and scalable production like co-processing HVO in existing petroleum refineries and better hydrogenation catalysts are increasing. With constant development in the conversion technologies and policy provisions, HVO is set to become a major player in the transition towards renewable energy alternatives.
For example, the 2018/2001/EU directive on the European Renewable Energy Directive II (RED II) outlines the overall Europe renewable energy goal of 32% by 2030. The policy seeks to promote the use of biofuels; it increases the demand for HVO as a low-carbon substitute in transportation and aviation.
Hydrotreated Vegetable Oil Market Analysis
The market of hydrotreated vegetable oil by source of feedstock is segmented into food and feed crops, animal fats, used cooking oils, palm oil mill effluent, others. The food and feed crops accounted for 68.7% of the market share in 2024 and is expected to grow with the CAGR of 12.4% in 2034.
The dominance of food and feed crop as a primary feedstock in this market is noticeable. This dominance is attributed to their high availability, steady supply chains, and existing agricultural infrastructure. Soybeans, rapeseeds, and sunflowers are some of the crops that yield an abundant amount of oil. Furthermore, government policies on several regions favor usage of crop-based biofuels, so demand is guaranteed. Nevertheless, food security and land use competition issues are starting to provoke a shift toward greater sustainability, thus encouraging market players to utilize more advanced feedstocks.
Animal fats and used cooking oils (UCO) are following food and feed crops, and they are becoming more prominent as more sustainable feedstocks. These raw materials or waste-based fuels have lower environmental effect, and sometimes lower cost. Because of strong regulatory incentives for waste-based biofuels, used cooking oils are increasingly utilized in North America and Europe. Another emerging feedstock, primarily in Asia, is palm oil mill effluent (POME), a by-product of palm oil processing.
Many new partnerships in this market is significant rising for instance, in February 2023, BP and BHP partnered for a renewable diesel trial where Hydrotreated Vegetable Oil (HVO) is used to fuel mining equipment at BHP's Yandi iron ore operations in Western Australia. This trial forms part of BHP's other initiatives aimed to decrease carbon emissions from diesel fuel use and move toward sustainable energy options.
The market is segmented in class 1: premium grade HVO, class 2: standard grade HVO, class 3: basic grade HVO, class 4: specialty grade HVO by grade. Class 2: standard grade HVO holds the market size of USD 10.6 billion in 2024 and expected to grow at a faster rate of 12.7% CAGR.
The major share of hydrotreated vegetable oil market is accounted by class 2: standard grade HVO attributed to the good balance of performance, price and applicability. This grade is used extensively in different sectors, such as transportation, industrial, and power generation because it is both cost-effective and meets strict emission standards. Whereas Premium Grade HVO is mainly suitable for high-performance applications, Standard Grade HVO is a more economical choice without sacrificing fuel performance and sustainability.
Renewable diesel consumption is also supported by government and regulatory body incentives globally. Furthermore, its compatibility with current diesel engines without significant alterations has made it a favored option for fleet owners and fields aiming to switch to cleaner fuels. Standard Grade HVO remains the largest played out fuel in the world market despite the growing trend to cut carbon facility as their usefulness and adherence to regulations only grow.
The hydrotreated vegetable oil market by technology is segmented into standalone hydrotreating technology, co-processing technology. The standalone hydrotreating technology segment accounted for 66.3% of the market share in 2024.
The Hydrotreated Vegetable Oil (HVO) market is dominated by standalone hydrotreating technology, which can produce high-purity renewable diesel with better fuel quality. Standalone hydrotreating allows for dedicated HVO production, which guarantees full stripping of the oxygen, sulfur and aromatics, unlike co-processing technology, which mixes bio-based feed stocks with fossil fuels in existing refineries. This leads to a high cetane, more efficient and cleaner combustion and its high demand at transportation, aviation and industrial applications.
Besides, this technology also increases used cooking oils, animal fats, and plant oils’ entry as feedstock because they do not interfere with the fossil fuels contamination. The incentive provided by the governments and regulating bodies to the production of fully renewable fuels is adding the already growing demand for standalone hydrotreating systems. As the industry continues moving towards more sustainable energy sources, this technology will remain leading in the markets.
Companies are actively making move in this industry like, in 2023, Modern Terminals has revealed the introduction of a trial programme of hydrotreated vegetable oil (HVO) at its Terminal 9 (South) facilities, making it the first Hong Kong company to use this renewable diesel.
Based on application the hydrotreated vegetable oil market is segmented into sustainable aviation fuel, automotive fuel, marine fuel, industrial power generation, heating fuel, agricultural equipment fuel, lubricants. Automotive fuel segment accounts for market size of USD 12.4 billion in 2024 and expected to grow at a faster rate of 12.6% CAGR to reach a larger target market.
The leadership of the automotive fuel market in hydrotreated vegetable oil (HVO) production stems from the growing demand for low emission, environmentally friendly substitutes for diesel fuel. Also known as renewable diesel, HVO is accepted in the transportation sector because it’s chemically the same as fossil diesel and can be used with existing fuel infrastructure without modification of the engines. Europe North America and other regions of the world have developed emission control and blending regulation policies which have to some extent accelerated the adoption of HVO in automotive applications. In addition, the increase in heavy-duty and commercial vehicles and the expansion of public transit systems are also stimulating the market. As fuel and logistics practitioners shift their attention towards carbon reduction, HVO is proving to be the fuel of choice, developing deeper market inroads than other sectors such as aviation and industrial fuels.
For example, in July 2022, Toyota disclosed that its Land Cruiser and Hilux models in Western Europe will be enabled to use HVO100 diesel fuel. HVO100 diesel fuel is derived from non-fossil fuels and is made from renewable sources like waste cooking oil. HVO100 fuel is also compliant with the EN 15940 European quality standard for paraffinic diesel powering vehicles, having higher cetane number while lesser sulfur and aromatics in comparison to regular diesel.
In the hydrotreated vegetable oil market Europe dominated the market by accounting USD 10.3 billion in 2024 and is expected to grow at a CAGR of 12.6% in 2034.
In Europe, there is stringent policy support combined with the growing need for renewable fuels and other environmental regulations which dominantly positions Europe at the forefront of the hydrotreated vegetable oil (HVO) market. The EU is bound to increase the biofuels blending ratio in transport fuels as stipulated in EU RED II which substantially propels the pace of HVO usage.
Major companies such as Neste, Eni & TotalEnergies which produce HVO also strengthen the region's position as a market leader. The transition to sustainable aviation fuel, or SAF, as well as the decarbonization of heavy transport and marine industries amplifies demand further. Used oils and residues being more easily accessible also increases the scalability of production which adds to the region’s market dominance. Amidst rising worries related to fuel security and abiding to the zero emissions policy, Europe continues to expand its infrastructure for HVO solidifying its position as a leader in the global market.
For instance, in October 2023, Neste got a go-ahead from the French government regarding the sale of transport fuels produced from fully renewable raw materials. This also supports Neste's HVO and renewable diesel sales, further enhancing Neste's innovation-driven sustainable energy strategy as well as expanding their market share in Europe. Neste will greatly benefit when France officially implements this renewable energy policy in July 2024.
Hydrotreated Vegetable Oil Market Share
In the hydrotreated vegetable oil industry, Repsol, Alfa Laval, TotalEnergies, Shell, Desmet, Cepsa are the top 5 companies which holds a large share due to their broad product portfolio and established market position. These companies benefit from their global presence and brand name in the market.
In 2024, Repsol inaugurated the Cartagena facility with the first large scale renewable fuels production plant on the Iberian Peninsula. The facility expects to mainly produce renewable diesel and other sustainable fuels, a clear sign from Repsol aimed at improving his company’s position in environmental sustainability of renewable energy. The goal here is to enhance the company's strength in the transition towards cleaner fuels.
In November 2023, Cepsa began selling renewable diesel, including Hydrotreated Vegetable Oil (HVO), from its new production facilities. This launch marks a significant milestone in Cepsa's strategy to expand its renewable energy offerings, aiming to meet growing market demand for sustainable fuels and support the transition to cleaner energy solutions.
Hydrotreated Vegetable Oil Market Companies
Some of the eminent market participants operating in the industry include:
October 2022: One notable advancement for business in the hydrotreated vegetable oil market is the expansion of Diamond Green Diesel's renewable diesel production capacity in Louisiana, United States. The company has significantly increased its refinery production with the intention of surpassing 275 million gallons of HVO per year which aids in meeting the increasing demand for renewable fuels in the transportation and industrial sectors. This expansion is a direct response to heightened regulatory demand for low-carbon fuel alongside the increased use of HVO within the U.S. market.
Hydrotreated Vegetable Oil Industry News
The hydrotreated vegetable oil market research report includes an in-depth coverage of the industry with estimates and forecast in terms of revenue in USD Billion from 2021 – 2034 for the following segments:
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Market, By Source of Feedstock
Market, By Grade
Market, By Technology
Market, By Application
The above information is provided for the following regions and countries: