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Renewable Diesel Market Size - By Feedstock, By Application and Forecast, 2025 – 2034

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Renewable Diesel Market Size

The global renewable diesel market was valued at USD 23 billion in 2024 and is estimated to grow at a CAGR of 8.1% from 2025 to 2034. It is a high-quality, drop-in fuel produced from renewable sources such as animal fats, vegetable oils and waste cooking oil. In contrast to biodiesel, a hydrotreatment process is employed for renewable diesel, hence chemically resulting the same as petroleum derived diesel. This allows it to be seamlessly used in existing diesel engines and infrastructure without modifications, making it a versatile alternative to fossil fuels.
 

Renewable Diesel Market

Growing government initiatives, such as the U.S.'s Renewable Fuel Standard and California's Low Carbon Fuel Standard, designed to incentivize the production and adoption of renewable diesel, will propel the industry growth. Rising adoption of fuels offering environmental benefits such as reduced greenhouse gas emissions compared to traditional petroleum diesel will propel the product adoption.

Rising demand for fuels which offers energy security by reducing dependency on petroleum, especially in regions seeking to diversify their energy sources will complement the product penetration. This is particularly crucial in the context of geopolitical uncertainties or rising crude oil prices. Furthermore, growing adoption of solutions with excellent compatibility with existing diesel engines and infrastructure, such as pipelines, storage tanks, and fueling stations, making easier for businesses and governments to transition from fossil fuels without significant additional investment in infrastructure or engine modifications will accelerate the fuel adoption.
 

Renewable Diesel Market Trends

Growing consumer and industry demand for more sustainable and environmentally friendly products, particularly visible across various sectors, including transportation, aviation, and logistics to reduce their environmental impact and meet sustainability targets will augment the business outlook. Furthermore, the growing availability of feedstocks and the establishment of larger-scale production facilities will help to drive down costs, making renewable diesel more cost-competitive and accessible to a broader market.
 

Renewable Diesel Market Analysis

Renewable Diesel Market Size, By Feedstock, 2022-2034 (USD Billion)

Based on feedstock, the renewable diesel industry is segmented into vegetable oil, animal fat, and others. Vegetable oil is anticipated to grow by more than USD 44.5 billion by 2034 on account of its environmental benefits such as renewable nature, biodegradable property, and reduced greenhouse gas (GHG) emissions when compared to fossil fuels. Rising demand for high energy density feedstocks, allowing renewable diesel to have similar performance characteristics to petroleum diesel, including combustion efficiency and engine power will enhance vegetable oil adoption. Furthermore, high feedstock availability of vegegtable oil including soybeans, canola, palm oil, and rapeseed, will makes it easier to source feedstock and scale up renewable diesel production, driving the industry statistics.
 

Renewable Diesel Market Share, By Application, 2024

Based on application, the renewable diesel market is segmented into transportation, power generation and others. Power generation application is set to grow at a CAGR of over 8.2% by 2034. Increasing power producers transition towards low-carbon alternatives to meet corporate sustainability goals and participate in carbon credit markets will enhance the product adoption. Rising volatility in fossil fuel markets and the push for energy diversification will drive demand for renewable diesel in power sector. Furthermore, as the difference in price between renewable diesel and traditional fuel decreases, more effort will be made to enhance cost-effectiveness in regard to fuel generation which ultimately will aid in the product expansion.
 

U.S. Renewable Diesel Market Size, 2022-2034 (USD Billion)

The U.S. renewable diesel market is anticipated to grow by more than USD 23.4 billion by 2034. Growing government policies and regulations including the Renewable Fuel Standard (RFS) and the Low Carbon Fuel Standard (LCFS) designed to incentivize the use of low-carbon fuels will bolster the fuel growth. Rising application of renewable diesel in wide range of industries such as transportation, agriculture, and construction will make the fuel an attractive alternative to traditional diesel. Additionally, growing U.S. focus on reducing its dependence on foreign oil to enhance energy security and reduce reliance on crude oil imports will foster the business landscape.
 

In Europe, rising promotion of advanced fuels in countries such as Japan, South Korea, and Singapore to meet their environmental targets will bolster the fuel adoption. Growing air pollution and smog concerns in China and India will encourage renewable fuel adoption offering reduced emissions compared to petroleum diesel. Furthermore, abundance of agricultural feedstocks such as palm oil, soybeans, and other vegetable oils, will make the region well-positioned to supply renewable diesel locally thereby improving the market growth.
 

Renewable Diesel Market Share

Eminent players are significantly increasing their production capacity at multiple locations globally. Companies are forming collaborations to strengthen their market position and boost renewable diesel production from sustainable feedstocks. These partnerships enable companies to leverage each other's expertise, supply chains, and market access, enhancing growth prospects in the renewable fuel sector. Furthermore, to ensure a steady supply of renewable diesel feedstock, companies are diversifying their sources. Major players are turning to waste oils, agricultural residues, and non-food crops in addition to conventional feedstocks such as vegetable oils.
 

Renewable Diesel Market Companies

Eminent players operating in the renewable diesel industry are:

  • BP
  • Chevron
  • Diamond Green Diesel
  • Eni
  • Gevo
  • Marathon Petroleum
  • Neste
  • PBF Energy
  • Repsol
  • Shell
  • Valero
  • World Energy
     

Renewable Diesel Industry News

  • In December 2024, Neste and BMW have teamed up to provide renewable diesel for BMW's diesel vehicles. BMW will incorporate Neste MY Renewable Diesel for the initial fueling of vehicles at its facilities in Dingolfing, Munich, Leipzig, and Regensburg, affecting more than half of its global diesel vehicle production. Deliveries to the plants have already started.
     
  • In April 2021, BP has announced a reduction in its plans to develop new sustainable aviation fuel (SAF) and renewable diesel projects at existing locations. The company revealed it is pausing two potential projects while continuing to evaluate three others for advancement.
     

Renewable diesel market research report includes an in-depth coverage of the industry with estimates & forecast in terms of revenue and volume in “USD Billion & MT” from 2021 to 2034, for the following segments:

Market, By Feedstock

  • Animal fat
  • Vegetable oil
  • Others

Market, By Application

  • Transportation
  • Power generation
  • Others

The above information has been provided for the following regions and countries:

  • North America
    • U.S.
    • Canada
  • Europe
    • Germany
    • France
    • Spain
    • UK
    • Italy
  • Asia Pacific
    • China
    • India
    • Indonesia
    • Australia
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
  • Latin America
    • Brazil
    • Argentina

 

Authors: Ankit Gupta, Pooja Shukla
Frequently Asked Question(FAQ) :
Who are the major players in the renewable diesel market?
The renewable diesel market features key players such as BP, Chevron, Diamond Green Diesel, Eni, Gevo, Marathon Petroleum, Neste, PBF Energy, Repsol, Shell, Valero, and World Energy.
What trends are driving the U.S. renewable diesel market growth?
How big is the renewable diesel market?
What is the size of the vegetable oil segment in the renewable diesel market?
Renewable Diesel Market Scope
  • Renewable Diesel Market Size
  • Renewable Diesel Market Trends
  • Renewable Diesel Market Analysis
  • Renewable Diesel Market Share
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    Premium Report Details

    Base Year: 2024

    Companies covered: 12

    Tables & Figures: 35

    Countries covered: 15

    Pages: 110

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