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Renewable Diesel Market Size - By Feedstock, By Application and Forecast, 2025 – 2034
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Renewable Diesel Market
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Base Year: 2024
Companies covered: 12
Tables & Figures: 35
Countries covered: 15
Pages: 110
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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.
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
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.
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.
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:
Renewable Diesel Industry News
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:
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Market, By Feedstock
Market, By Application
The above information has been provided for the following regions and countries: