Biodiesel Market Report 2026

Biodiesel Market Overview

• Biodiesel market size has reached to $61.01 billion in 2025 • Expected to grow to $81.84 billion in 2030 at a compound annual growth rate (CAGR) of 6.1% • Growth Driver: Biodiesel Market Surges In Response To Escalating Global Energy Demand • Market Trend: Indian Oil Corporation's Strategic Partnership With Praj Industries Expands Biofuel Production Horizon • Western Europe was the largest region in 2025 and Asia-Pacific is the fastest growing region.

What Is Covered Under Biodiesel Market?

Biodiesel is a sustainable, biodegradable fuel produced domestically from vegetable oils, animal fats, or used restaurant grease. Biodiesel is used as a source of power for automobiles, home appliances and others. The main feedstock involved in biodiesel is vegetable oil and animal fats. Vegetable oils refer to edible and non-edible oils that are extracted from various types of fruits, seeds, grains, and nuts. It is produced by transesterification and hydro-heating. It is used in several applications, such as, fuel, power generation, and agriculture.

What Is The Biodiesel Market Growth Forecast?

The biodiesel market size is expected to see strong growth in the next few years. It will grow to $81.84 billion in 2030 at a compound annual growth rate (CAGR) of 6.1%. The growth in the forecast period can be attributed to increasing decarbonization targets, rising demand for sustainable transportation fuels, expansion of renewable energy policies, growing investment in advanced biodiesel technologies, increasing adoption of biodiesel in power generation. Major trends in the forecast period include increasing adoption of bio-based fuels, rising use of waste and residue feedstocks, expansion of biodiesel blending mandates, growing focus on low-carbon fuel production, enhanced process efficiency in biodiesel plants.

Global Biodiesel Market Segmentation

1) By Feedstock: Vegetable Oil, Animal Fats 2) By Production Process: Alcohol Trans Esterification, Hydro-Heating 3) By Application: Fuel, Power Generation, Agriculture Subsegments: 1) By Vegetable Oil: Soybean Oil, Canola Oil, Palm Oil, Sunflower Oil, Other Vegetable Oils 2) By Animal Fats: Tallow, Poultry Fat, Fish Oil, Other Animal Fats

What Is The Driver Of The Biodiesel Market?

An increase in the energy demand is expected to propel the biodiesel market going forward. Energy demand refers to the total amount of energy needed, consumed, or requested within a specific period in each geographical area. Biodiesel plays a crucial role in meeting energy demand while addressing environmental sustainability. As a renewable and cleaner-burning alternative to traditional fossil fuels, biodiesel contributes to reducing greenhouse gas emissions and mitigating the impact of transportation on the environment. Its utilization in various sectors, particularly in the transportation industry, helps diversify the energy mix and decreases dependence on conventional fuels. For instance, in March 2025, according to the International Energy Agency, a Austria-based global energy demand rose by 2.2% in 2024, substantially above the decade average of 1.3%, driven by surging electricity consumption, industrial growth and expanding energy use in emerging economies. Therefore, an increase in the energy demand is driving the biodiesel industry.

What Is The Driver Of The Biodiesel Market?

An increase in the energy demand is expected to propel the biodiesel market going forward. Energy demand refers to the total amount of energy needed, consumed, or requested within a specific period in each geographical area. Biodiesel plays a crucial role in meeting energy demand while addressing environmental sustainability. As a renewable and cleaner-burning alternative to traditional fossil fuels, biodiesel contributes to reducing greenhouse gas emissions and mitigating the impact of transportation on the environment. Its utilization in various sectors, particularly in the transportation industry, helps diversify the energy mix and decreases dependence on conventional fuels. For instance, in March 2025, according to the International Energy Agency, a Austria-based global energy demand rose by 2.2% in 2024, substantially above the decade average of 1.3%, driven by surging electricity consumption, industrial growth and expanding energy use in emerging economies. Therefore, an increase in the energy demand is driving the biodiesel industry.

Global Biodiesel Market Trends and Insights

Major companies operating in biodiesel market are into partnerships to strengthen their position in the market. A business strategic partnership refers to a structured affiliation between two or more commercial enterprises, typically established via one or more business agreements or contracts. For instance, in July 2023, Indian Oil Corporation Limited, an India-based oil and gas company partnered with Praj Industries Limited. The collaboration aims to produce biofuels such as Sustainable Aviation Fuel (SAF), Ethanol, Compressed Bio-Gas (CBG), Biodiesel and Bio-bitumen, and others. Praj Industries Limited is an India-based process and project engineering company.

What Are Latest Mergers And Acquisitions In The Biodiesel Market?

In February 2025, Sasol, a South Africa-based provider of integrated energy and chemical solutions, partnered with Anglo American to accelerate South Africa’s sustainable energy transition through renewable feedstock innovation. The acquisition aims to expand renewable diesel production by evaluating the technical and commercial feasibility of vegetable oil-based feedstock, leveraging land, resources, and expertise for sustainable cultivation. Anglo American is a UK-based mining company that is involved in biodiesel.

Regional Insights

Western Europe was the largest region in the biodiesel market share in 2025. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in this market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa The countries covered in this market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain

What Defines the Biodiesel Market?

The biodiesel market consists of sales of biodiesel produced from canola oil, soybean oil, palm oil, and corn oil. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

How is Market Value Defined and Measured?

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified). The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

What Key Data and Analysis Are Included in the Biodiesel Market Report 2026?

The biodiesel market research report is one of a series of new reports from The Business Research Company that provides market statistics, including industry global market size, regional shares, competitors with the market share, detailed market segments, market trends and opportunities, and any further data you may need to thrive in the biodiesel industry. The market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future state of the industry.