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    Renewable Diesel Market

    ID: MRFR/E&P/22745-HCR
    100 Pages
    Snehal Singh
    October 2025

    Renewable Diesel Market Research Report By Feedstock (Soybean Oil, Palm Oil, Animal Fats, Vegetable Oils, Used Cooking Oil), By Production Process (Hydrotreated Vegetable Oil (HVO), Ethanol-to-Diesel (ETD), Gasification-to-Liquids (GTL), Microwave-assisted Processing), By Certification Standards (Renewable Fuel Standard (RFS), International Sustainability and Carbon Certification (ISCC), Low Carbon Fuel Standard (LCFS), European Union Renewable Energy Directive (EU RED)) and By Regional (North America, Europe, South America, Asia Pacific, Mi...

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    Renewable Diesel Market Infographic
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    Renewable Diesel Market Summary

    The Global Renewable Diesel Market is projected to grow from 3.61 USD Billion in 2024 to 19.71 USD Billion by 2035, reflecting a robust growth trajectory.

    Key Market Trends & Highlights

    Renewable Diesel Key Trends and Highlights

    • The market is expected to expand at a compound annual growth rate of 16.68 percent from 2025 to 2035.
    • By 2035, the market valuation is anticipated to reach 19.7 USD Billion, indicating substantial growth potential.
    • in 2024, the market is valued at 3.61 USD Billion, laying a solid foundation for future expansion.
    • Growing adoption of renewable diesel due to increasing environmental regulations is a major market driver.

    Market Size & Forecast

    2024 Market Size 3.61 (USD Billion)
    2035 Market Size 19.71 (USD Billion)
    CAGR (2025-2035) 16.69%

    Major Players

    Neste, Phillips 66, Eni, TotalEnergies, Shell, PBF Energy, Renewable Energy Group, BP, Equinor, World Energy, Chevron, Repsol, Marathon Petroleum, Valero

    Renewable Diesel Market Trends

    The renewable diesel market is poised for significant growth due to increasing concerns over climate change and the need for sustainable transportation fuels. Governments worldwide are implementing policies that promote the adoption of renewable fuels, particularly in the transportation sector. The global market is driven by the rising demand for diesel fuel in various applications, such as heavy-duty transportation, marine transportation, and off-road vehicles. 

    Moreover, the growing popularity of electric vehicles and the ban on diesel vehicles in certain regions are creating opportunities for the renewable diesel market, as it can be used as a drop-in replacement for conventional diesel fuel. The recent trend toward decarbonization has led to increased investment in renewable diesel production facilities, indicating a growing focus on sustainable and cost-effective alternatives to fossil fuels.

     

    The transition towards renewable diesel is poised to reshape the energy landscape, driven by increasing regulatory support and a growing commitment to sustainability across various sectors.

    U.S. Department of Energy

    Renewable Diesel Market Drivers

    Market Growth Projections

    The Global Renewable Diesel Market Industry is poised for substantial growth, with projections indicating a market size of 19.7 USD Billion by 2035. This anticipated growth reflects a compound annual growth rate of 16.68% from 2025 to 2035, driven by various factors including technological advancements, government policies, and increasing consumer demand for sustainable fuels. The market's trajectory suggests a robust future, as stakeholders across the energy sector recognize the potential of renewable diesel in achieving climate goals and transitioning towards a more sustainable energy landscape.

    Government Policies and Incentives

    Government policies and incentives are crucial drivers of the Global Renewable Diesel Market Industry, as they create a favorable environment for investment and development. Many nations are implementing tax credits, subsidies, and mandates that encourage the adoption of renewable diesel. For example, the Renewable Fuel Standard in the United States mandates a certain volume of renewable fuels to be blended into transportation fuels, thereby boosting demand. Such supportive policies are likely to propel the market forward, contributing to a compound annual growth rate of 16.68% from 2025 to 2035.

    Growing Awareness of Climate Change

    The increasing awareness of climate change and its impacts significantly influences the Global Renewable Diesel Market Industry. As public concern over environmental issues rises, consumers are more inclined to support products that contribute to sustainability. This shift in consumer behavior is prompting companies to invest in renewable diesel as a means to enhance their environmental credentials. Consequently, the market is witnessing a robust growth trajectory, as businesses seek to align their operations with the values of eco-conscious consumers, further solidifying the role of renewable diesel in the energy transition.

    Increasing Demand for Sustainable Fuels

    The Global Renewable Diesel Market Industry experiences a surge in demand for sustainable fuels as governments and consumers alike prioritize environmental responsibility. This shift is driven by stringent regulations aimed at reducing greenhouse gas emissions and promoting cleaner energy sources. For instance, many countries are implementing policies that incentivize the use of renewable diesel over traditional fossil fuels. As a result, the market is projected to reach 3.61 USD Billion in 2024, reflecting a growing recognition of the need for sustainable alternatives in the transportation sector.

    Technological Advancements in Production

    Technological innovations play a pivotal role in the Global Renewable Diesel Market Industry, enhancing production efficiency and reducing costs. Advances in feedstock processing and refining techniques enable manufacturers to produce renewable diesel from a wider variety of biomass sources, including waste oils and agricultural residues. These improvements not only increase the availability of renewable diesel but also contribute to its economic viability. As production methods become more efficient, the market is expected to grow significantly, with projections indicating a rise to 19.7 USD Billion by 2035, driven by these technological advancements.

    Expansion of Infrastructure for Distribution

    The expansion of infrastructure for the distribution of renewable diesel is a vital factor in the Global Renewable Diesel Market Industry. Enhanced logistics and distribution networks facilitate the availability of renewable diesel at fueling stations, making it more accessible to consumers. Investments in infrastructure, such as blending facilities and storage tanks, are essential for meeting the growing demand. As the market continues to expand, the development of a comprehensive distribution network will be critical in ensuring that renewable diesel can compete effectively with traditional fuels, thereby supporting its growth in the coming years.

    Market Segment Insights

    Renewable Diesel Market Feedstock Insights

    The feedstock segment of the Renewable Diesel Market is expected to experience significant growth in the coming years, driven by increasing demand for sustainable and renewable energy sources. The segment is segmented into five main categories: soybean oil, palm oil, animal fats, vegetable oils, and used cooking oil. Soybean oil is the most commonly used feedstock for renewable diesel production, accounting for over 60% of the global market share. Palm oil is the second most popular feedstock, followed by animal fats, vegetable oils, and used cooking oil.

    The choice of feedstock depends on several factors, including availability, cost, and environmental impact. The increasing demand for renewable diesel is primarily attributed to its environmental benefits. Renewable diesel is a cleaner-burning fuel than traditional diesel, and it can help to reduce greenhouse gas emissions. In addition, renewable diesel is biodegradable and non-toxic, making it a more environmentally friendly option than fossil fuels. The growth of the renewable diesel market is also being driven by government policies and regulations.

    Many countries have adopted policies that support the production and use of renewable fuels. For example, the European Union has a target of reaching 14% renewable energy consumption by 2030. The feedstock segment is expected to grow at a slightly faster rate than the overall market, reaching a value of USD 6.5 billion by 2032. The growth of the feedstock segment will be driven by increasing demand for renewable diesel and the development of new feedstock technologies.

    Renewable Diesel Market Production Process Insights

    The Renewable Diesel Market is segmented based on Production Process into Hydrotreated Vegetable Oil (HVO), Ethanol-to-Diesel (ETD), Gasification-to-Liquids (GTL), and Microwave-assisted Processing. In 2023, the HVO segment dominated the market with a share of over 60%, due to its high efficiency and low emissions. The ETD segment is expected to grow rapidly in the coming years, driven by the increasing availability of ethanol feedstock. The GTL segment is also expected to grow significantly, due to its ability to convert a wide range of feedstocks into renewable diesel.

    The Microwave-assisted Processing segment is still in its early stages of development, but it has the potential to revolutionize the production of renewable diesel by reducing costs and improving efficiency.

    Renewable Diesel Market Certification Standards Insights

    Certification Standards segment plays a critical role in the Renewable Diesel Market, ensuring the sustainability and quality of renewable diesel production and consumption. Key certification standards include the Renewable Fuel Standard (RFS): The RFS mandates the use of renewable fuels in transportation fuels, driving demand for renewable diesel. In 2023, the global RFS-compliant renewable diesel market was valued at $2.65 billion, projected to reach $10.63 billion by 2032 at a CAGR of 16.69%. 

    International Sustainability and Carbon Certification (ISCC): ISCC certifies the sustainability of renewable diesel production, ensuring compliance with environmental and social criteria.With increasing consumer and regulatory focus on sustainability, ISCC-certified renewable diesel is gaining traction. Low Carbon Fuel Standard (LCFS): The LCFS regulates the carbon intensity of transportation fuels, incentivizing the production and use of low-carbon fuels like renewable diesel. California's LCFS has been instrumental in driving renewable diesel adoption within the state. 

    European Union Renewable Energy Directive (EU RED): The EU RED promotes the use of renewable energy sources, including renewable diesel. The directive sets targets for the share of renewable energy in the transportation sector, contributing to the growth of the renewable diesel market in Europe.

    Get more detailed insights about Renewable Diesel Market

    Regional Insights

    The Renewable Diesel Market is segmented into North America, Europe, APAC, South America, and MEA. North America is expected to dominate the market, with a market share of around 40% in 2023, due to the increasing demand for renewable fuels and the presence of major renewable diesel producers in the region. Europe is expected to be the second-largest market, with a market share of around 30% in 2023, due to the favorable government policies and the growing adoption of renewable energy sources in the region. 

    APAC is expected to be the fastest-growing market, with a CAGR of around 10% during the forecast period, due to the increasing demand for renewable fuels in the region, particularly in China and India. South America and MEA are expected to account for smaller shares of the market but are expected to witness steady growth during the forecast period. Overall, the Renewable Diesel Market is expected to grow at a CAGR of around 8% during the forecast period, reaching a market valuation of around USD 10.63 billion by 2032.

    Renewable Diesel Market Regional Insights

    Source: Primary Research, Secondary Research, Market Research Future Database and Analyst Review

    Key Players and Competitive Insights

    Major players in the Renewable Diesel Market industry have adopted various strategies to maintain and improve their position in the market. Leading Renewable Diesel Market players are focusing on the development of innovative products, expansion of production capacities, acquisition of smaller companies, and strategic partnerships. The Renewable Diesel Market development is influenced by technological advancements, government policies, and changing consumer preferences. The Renewable Diesel Market Competitive Landscape is expected to remain competitive over the next five years due to increasing demand for renewable energy sources and stringent environmental regulations.

    Neste, a Finnish company, is a leading producer of renewable diesel and has a strong presence in the European market. The company has invested heavily in research and development to produce high-quality renewable diesel that meets the latest industry standards. Neste has also established partnerships with major energy companies to expand its distribution network. 

    Neste's commitment to sustainability has helped the company gain a strong reputation in the renewable diesel market. Phillips 66, an American energy company, is a major producer of renewable diesel in the United States. The company has invested in the construction of new renewable diesel production facilities and has also acquired existing renewable diesel businesses. Phillips 66 has a strong distribution network that reaches customers across the United States and Canada. The company's focus on innovation and customer service has helped it become a leading player in the renewable diesel market.

    Key Companies in the Renewable Diesel Market market include

    Industry Developments

    The Renewable Diesel Market is projected to grow significantly in the coming years, driven by increasing demand for sustainable transportation fuels, government regulations, and technological advancements. In 2023, the market was valued at approximately USD 2.65 billion and is expected to reach USD 10.63 billion by 2032, exhibiting a CAGR of 16.69%. Recent developments in the market include strategic partnerships, mergers and acquisitions, and capacity expansions. For instance, in 2023, Chevron announced a partnership with Renewable Energy Group to expand its renewable fuels production capacity.

    Such collaborations are expected to contribute to the growth of the renewable diesel market in the future.

    Future Outlook

    Renewable Diesel Market Future Outlook

    The Renewable Diesel Market is poised for robust growth, driven by sustainability initiatives and technological advancements, with a projected 16.69% CAGR from 2025 to 2035.

    New opportunities lie in:

    • Invest in advanced feedstock technologies to enhance production efficiency. Develop strategic partnerships with logistics companies for distribution optimization. Explore government incentives for renewable energy projects to secure funding.

    By 2035, the Renewable Diesel Market is expected to achieve substantial growth, reflecting increasing global demand.

    Market Segmentation

    Renewable Diesel Market Regional Outlook

    • North America
    • Europe
    • South America
    • Asia Pacific
    • Middle East and Africa

    Renewable Diesel Market Feedstock Outlook

    • {""=>["Hydrotreated Vegetable Oil (HVO)"
    • "Ethanol-to-Diesel (ETD)"
    • "Gasification-to-Liquids (GTL)"
    • "Microwave-assisted Processing"]}

    Renewable Diesel Market Production Process Outlook

    • {""=>["Renewable Fuel Standard (RFS)"
    • "International Sustainability and Carb"
    • "on Certification (ISCC)"
    • "Low Carbon Fuel Standard (LCFS)"
    • "European Union Renewable Energy Directive (EU RED)"]}

    Renewable Diesel Market Certification Standards Outlook

    • {""=>["North America"
    • "Europe"
    • "South America"
    • "Asia Pacific"
    • "Middle East and Africa"]}

    Report Scope

    Report Attribute/MetricDetails
    Market Size 2024   3.61 (USD Billion)
    Market Size 2025   4.21 (USD Billion)
    Market Size 203519.71 (USD Billion)
    Compound Annual Growth Rate (CAGR)16.69% (2025 - 2035)
    Report CoverageRevenue Forecast, Competitive Landscape, Growth Factors, and Trends
    Base Year2024
    Market Forecast Period2025 - 2035
    Historical Data2019 - 2023
    Market Forecast UnitsUSD Billion
    Key Companies ProfiledEni, TotalEnergies, Shell, PBF Energy, Neste, Renewable Energy Group, BP, Equinor, World Energy, Chevron, Repsol, Marathon Petroleum, Phillips 66, Valero
    Segments CoveredFeedstock, Production Process, Certification Standards, Regional
    Key Market Opportunities1 Growing demand for sustainable transportation fuels2 Government incentives for renewable diesel production3 Technological advancements in renewable diesel production4 Partnerships between refiners and renewable feedstock suppliers5 Growing international trade of renewable diesel
    Key Market DynamicsRising demand for sustainable fuels Government incentives and regulations Technological advancements Increasing production capacity Growing investment in Ramp
    Countries CoveredNorth America, Europe, APAC, South America, MEA

    FAQs

    What is the market size of the Renewable Diesel Market?

    The Renewable Diesel Market is expected to reach USD 16.89 billion by 2034, growing at a CAGR of 16.69% from 2025 to 2034.

    Which region is expected to dominate the Renewable Diesel Market?

    North America is expected to dominate the Renewable Diesel Market throughout the forecast period due to supportive government policies, rising environmental concerns, and increasing demand for sustainable transportation fuels.

    What are the key factors driving the growth of the Renewable Diesel Market?

    The growth of the Renewable Diesel Market is primarily driven by rising environmental concerns, increasing demand for sustainable transportation fuels, supportive government policies, and technological advancements.

    What are the major applications of renewable diesel?

    Renewable diesel is primarily used as a substitute for conventional diesel fuel in transportation applications such as on-road vehicles, off-road vehicles, and marine vessels.

    Who are the key competitors in the Renewable Diesel Market?

    Key competitors in the Renewable Diesel Market include Neste, Valero Energy, Marathon Petroleum, Phillips 66, and Chevron.

    What are the challenges faced by the Renewable Diesel Market?

    The Renewable Diesel Market faces challenges such as high production costs, feedstock availability, and competition from conventional diesel fuels.

    What is the outlook for the Renewable Diesel Market?

    The outlook for the Renewable Diesel Market is positive due to increasing demand for sustainable transportation fuels, supportive government policies, and technological advancements.

    What are the potential applications of renewable diesel beyond transportation?

    Renewable diesel has potential applications beyond transportation, such as in heating, power generation, and industrial processes.

    How is the Renewable Diesel Market segmented?

    The Renewable Diesel Market is segmented based on feedstock, production process, application, and region.

    What are the environmental benefits of using renewable diesel?

    Renewable diesel offers environmental benefits such as reduced greenhouse gas emissions, improved air quality, and reduced dependence on fossil fuels.

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