The global biodiesel market, valued at USD 40 million in 2024, is projected to reach approximately USD 104.69 million by 2034. This growth, driven by increasing demand for renewable energy and sustainable fuel alternatives, is expected at a CAGR of 10.1%.
Biodiesel Market Statical Scope
| Reports Attributes |
Statistics |
| Market Size in 2024 |
USD 40 Million |
| Market Size in 2025 |
USD 44.04 Million |
| Market Size in 2031 |
USD 78.44 Million |
| Market Size by 2034 |
USD 104.69 Million |
| CAGR 2025 to 2034 |
10.1% |
| Base Year |
2024 |
| Forecast Period |
2025 to 2034 |
What Factors Are Driving the Expansion of the Biodiesel Market?
The biodiesel market is expanding rapidly, driven by the growing focus on sustainable energy sources. It is a renewable fuel made from natural sources such as vegetable oils, animal fats, or cooking oils, and is used in diesel engines at various formulation percentages. The popularity of biodiesel has significantly increased globally due to growing government and organizational pressure to reduce dependence on fossil fuels, thereby reducing GHG emissions. As a result, it is widely used in road vehicles and off-road equipment across various industries. For instance, the government of India is providing a subsidy for biofuel plants of up to 30% on their total project costs to attract investors in the renewable energy transition. The GST exemptions on biofuel raw materials are also being made for research and other processes.
What Challenges Could Hinder the Widespread Adoption of Biodiesel?
The use of these sustainable alternatives has risen significantly in recent years and is now being implemented in both developed and developing countries. But there are still some factors, such as higher prices compared to traditional fuels, that can create challenges for the biodiesel market. Moreover, some environmental factors, such as extreme cold weather, can limit its adoption rate due to performance issues.
What Emerging Opportunities Are Shaping the Future of the Biodiesel Industry?
The biodiesel market is expected to attract several business opportunities in the coming years, as the aviation and marine sectors are also seeking R&D for biodiesel blends. This is attracting massive research funds, which would also create another user segment and generate more business for these companies. Additionally, most companies are investing in biodiesel, which can benefit them through carbon credit trading and align with regulatory norms.
The European region holds an upper hand in the biodiesel market due to the stricter regulations from the EU and other bodies towards renewable projects. The infrastructure in Germany, Italy, France, and the United Kingdom is focused on maintaining the availability of biodiesel for their use. On the other hand, Asian countries are investing in such initiatives due to the greater availability of oil sources such as palm oil to comply with these environmental norms and expand their businesses.
How Are Emerging Technologies Like AI and ML Transforming Biodiesel Production?
The integration of technologies like artificial intelligence AI and machine learning ML is expected to be helpful, as they help analyze agricultural yield patterns and conditions to optimize the use of feedstocks. Moreover, AI-based monitoring systems are used to optimize temperature, reaction time, and catalyst use, thereby ensuring fuel quality. The use of these technologies is expected to be more helpful in aviation and other projects due to their early years in the business, which help companies simplify their procedures.
Biodiesel Market Share, By Region, 2024 (%)
| Regions |
Shares (%) |
| North America |
35% |
| Asia Pacific |
25% |
| Europe |
30% |
| LAMEA |
10% |
- North America – Holds 35% of the market, driven by strong biodiesel production in the U.S. and Canada. Dominates due to favorable policies and large-scale production facilities.
- Europe – Accounts for 30% of the market, with stringent environmental regulations pushing for higher biodiesel adoption. Dominating due to strong government support and biodiesel usage in transportation.
- Asia Pacific – Represents 25% of the market, with increasing biodiesel production and use in countries like China and India. Gaining momentum as demand for alternative fuels grows in rapidly developing economies.
- LAMEA – Holds 10% of the market, with biodiesel production growing in Latin America, the Middle East, and Africa. Not dominating but expanding due to rising interest in renewable energy sources in these regions.
Biodiesel Market Share, By Feedstock, 2024 (%)
| Segments |
Shares (%) |
| Vegetable Oil |
40% |
| Canola Oil |
20% |
| Soybean Oil |
15% |
| Palm Oil |
10% |
| Corn Oil |
5% |
| Others |
10% |
| Animal Fats |
35% |
| Poultry |
25% |
| Tallow |
25% |
| White Grease |
10% |
| Others |
5% |
- Vegetable Oil – Accounts for 40% of the market, widely used as a primary feedstock for biodiesel production. Dominates due to its availability, cost-effectiveness, and ease of processing.
- Canola Oil – Represents 20% of the market, a popular choice for biodiesel due to its high oil content and favorable fatty acid profile. Gaining momentum as a sustainable alternative in biodiesel production.
- Soybean Oil – Holds 15% of the market, a commonly used feedstock in biodiesel production. Gaining momentum due to its high yield and existing large-scale agricultural production.
- Palm Oil – Accounts for 10% of the market, used for biodiesel production but with mixed sustainability concerns. Not dominating due to environmental concerns and competition from other oils.
- Corn Oil – Represents 5% of the market, used in biodiesel production as a secondary feedstock. Not dominating due to its lower availability compared to other vegetable oils but used in regions with significant corn production.
- Others (Vegetable Oils) – Comprise 10% of the market, covering less common oils used in biodiesel production. Not dominating but utilized where other oils are less feasible or available.
- Animal Fats – Holds 35% of the market, representing a significant portion of biodiesel feedstock. Dominates due to its availability as a byproduct from the meat and poultry industries.
- Poultry – Accounts for 25% of the market, with chicken fat being a common source for biodiesel production. Dominating due to its availability and relatively low cost.
- Tallow – Represents 25% of the market, sourced from beef and sheep fat. Dominates as a secondary feedstock due to its high availability and use in animal rendering.
- White Grease – Holds 10% of the market, made from animal fats like lard. Not dominating but still widely used in biodiesel production due to its availability as a waste byproduct.
- Others (Animal Fats) – Accounts for 5% of the market, covering other animal fats used in biodiesel production. Not dominating but important as a secondary feedstock in specific regions.
Biodiesel Market Share, By Application, 2024 (%)
| Segments |
Shares (%) |
| Fuel |
50% |
| Automotive |
30% |
| Marine |
10% |
| Agriculture |
5% |
| Power Generation |
5% |
| Others |
10% |
- Fuel – Represents 50% of the market, as biodiesel is primarily used as a renewable fuel source. Dominates due to global demand for cleaner fuels and the shift toward renewable energy sources.
- Automotive – Holds 30% of the market, with biodiesel increasingly used in vehicles to reduce emissions. Dominates due to the growing adoption of alternative fuels in the automotive industry.
- Marine – Accounts for 10% of the market, with biodiesel being used in marine engines as a more sustainable fuel. Gaining momentum as regulatory pressure increases for cleaner marine fuels.
- Agriculture – Represents 5% of the market, with biodiesel used in agricultural machinery and operations. Not dominating but showing steady growth as farmers adopt renewable energy sources.
- Power Generation – Holds 5% of the market, used in power plants as a renewable energy source. Not dominating but gaining interest as countries transition to greener energy alternatives.
- Others (Applications) – Comprise 10% of the market, covering miscellaneous uses such as in heating, lighting, and industrial processes. Not dominating but growing in niche applications.
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