Biodiesel Fuel Market Worth USD 85.2 Bn by 2034 at 6.9% CAGR

Overview

New York, NY – June 25, 2025 – The Global Biodiesel Fuel Market is gaining strong popularity due to rising demand for cleaner energy and government support for renewable fuels. The market is expected to grow from USD 43.7 billion in 2024 to around USD 85.2 billion by 2034, expanding at a 6.9% CAGR during 2025-2034.

B100 led the global market in 2024, securing a 39.7% share of biodiesel fuel by blend. Its dominance stems from the push for fully renewable fuels, especially in transportation fleets, heavy machinery, and agriculture. Conventional Alcohol Trans-esterification dominated in 2024, commanding a 74.8% share of the biodiesel market by production technology.

Vegetable Oil dominated the biodiesel feedstock market in 2024, holding a 67.5% share. Soybean, canola, palm, and sunflower oils remain key due to their availability, scalability, and supportive infrastructure in countries like the U.S. and Indonesia. The Fuel Application segment dominated the biodiesel market, holding a 69.1% share. This prominence is driven by increasing demand for biodiesel as a direct substitute or additive for traditional diesel in transportation, logistics, and industrial sectors.

Key Takeaways

• Biodiesel Fuel Market size is expected to be worth around USD 85.2 billion by 2034, from USD 43.7 billion in 2024, growing at a CAGR of 6.9%.
• 100 held a dominant market position, capturing more than a 39.3% share of the global biodiesel fuel market.
• Conventional Alcohol Trans-esterification held a dominant market position, capturing more than a 74.6% share.
• Vegetable Oil held a dominant market position, capturing more than a 67.4% share of the global biodiesel fuel market.
• Fuel held a dominant market position, capturing more than a 69.1% share in the biodiesel fuel market.
• Europe solidified its position as the leading region in the global biodiesel market, capturing a substantial 42.7% share, equivalent to a market value of approximately USD 18.6 billion.

How Growth is Impacting the Economy

The Biodiesel Market’s growth significantly impacts global economies. It creates jobs in agriculture, production, and distribution, particularly in feedstock-rich regions like the U.S., Brazil, and Indonesia. Reduced reliance on imported petroleum enhances energy security, stabilizing economies in countries like India and Indonesia with high blending mandates. Government subsidies and tax incentives, such as the U.S. biodiesel blending credit, stimulate investment, boosting GDP.

However, challenges like feedstock shortages and competition with food crops can increase prices, affecting consumers. In developing nations, biodiesel fosters rural development by utilizing agricultural waste, promoting a circular economy. Despite higher production costs, the shift to cleaner fuels aligns with climate goals, attracting green investments and fostering long-term economic resilience.

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Strategies for Businesses

Businesses in the biodiesel market should invest in R&D to optimize production using diverse feedstocks like used cooking oil and algae, reducing costs and enhancing scalability. Strategic partnerships with agricultural sectors ensure a steady feedstock supply. Adopting advanced technologies, such as alcohol trans-esterification, improves efficiency. Companies must align with government policies, leveraging subsidies and mandates. Expanding into high-growth regions like Asia-Pacific, particularly Indonesia and Thailand, taps into rising demand. Marketing biodiesel’s environmental benefits can attract eco-conscious consumers. Lastly, diversifying into biojet fuels and renewable diesel ensures resilience against market fluctuations.

Report Scope

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Key Market Segments

By Blend

• B100 led the global market in 2024, securing a 39.7% share of biodiesel fuel by blend. Its dominance stems from the push for fully renewable fuels, especially in transportation fleets, heavy machinery, and agriculture, where carbon reduction is critical without engine modifications. B100’s 100% biodiesel composition delivers superior environmental benefits compared to lower blends like B20 or B5.
• National policies and public sector procurement programs in 2024 heavily favored B100 for government and transit applications, driving its widespread adoption. Increased availability of biodiesel from used cooking oil, animal fats, and non-edible oilseeds further fueled B100’s growth. In 2025, stricter emissions rules and heightened focus on lifecycle carbon reductions are set to sustain B100’s market lead.

By Production Technology

• Conventional Alcohol Trans-esterification dominated in 2024, commanding a 74.8% share of the biodiesel market by production technology. Its cost-effectiveness, scalability, and straightforward process of reacting oils or fats with methanol or ethanol using a catalyst make it the industry standard. This method’s high yield and feedstock versatility support its use across small and large-scale biodiesel plants. Major producers like the U.S., Brazil, and Argentina relied heavily on this technology in 2024, benefiting from established infrastructure and regulatory clarity.

By Feedstock

• Vegetable oil dominated the biodiesel feedstock market in 2024, holding a 67.5% share. Soybean, canola, palm, and sunflower oils remain key due to their availability, scalability, and supportive infrastructure in countries like the U.S. and Indonesia. Vegetable oil-based biodiesel consistently met stringent quality standards, outpacing alternatives like animal fats or used cooking oil. Policies promoting farm-to-fuel initiatives further cemented its role.

By Application

• In 2024, the Fuel Application segment dominated the biodiesel market, holding a 69.1% share. This prominence is driven by increasing demand for biodiesel as a direct substitute or additive for traditional diesel in transportation, logistics, and industrial sectors. Governments worldwide have strengthened blending mandates, particularly for public buses, freight transport, and municipal fleets, which heavily rely on diesel engines.

• Countries like Germany, the U.S., and Indonesia expanded their use of biodiesel blends, such as B20 and B100, in 2024, supported by existing infrastructure for bulk fuel distribution. The compatibility of biodiesel with current diesel engines, requiring no modifications, has significantly boosted its adoption. National clean energy policies and emissions reduction goals further promote biodiesel as a low-carbon fuel alternative.

Regional Analysis

• In 2024, Europe strengthened its dominance in the global biodiesel market, securing a 42.7% share valued at approximately USD 18.6 billion. This leadership is driven by the European Union’s stringent renewable energy policies, notably the Renewable Energy Directive (RED III), which requires at least 14.5% renewable energy in transport. 

• Germany leads Europe’s biodiesel production, accounting for roughly 45% of the region’s total output in 2024. Its focus on sustainable energy and cutting-edge production facilities has solidified its top position. France and Spain also contribute significantly, with France emphasizing diverse feedstocks and Spain utilizing its agricultural resources for biodiesel production. 

• Biodiesel consumption in the EU reached 7.2% of diesel use by energy in 2022, with B7 blends widely adopted as standard diesel fuel. The EU’s dedication to lowering greenhouse gas emissions and reducing reliance on fossil fuels continues to propel the biodiesel industry forward.

Recent Developments

1. Ag Processing, Inc. (AGP)

• AGP has expanded its biodiesel production capacity to meet growing demand for renewable fuels. The company focuses on sourcing sustainable soybean oil and has invested in new refining technologies to improve fuel quality. AGP also collaborates with farmers to ensure a steady supply of feedstocks. Their biodiesel is widely used in transportation and industrial applications.

2. Archer Daniels Midland Company (ADM)

• ADM has been scaling up biodiesel production, leveraging its global supply chain for vegetable oils and animal fats. The company recently partnered with Clean Fuels Alliance America to promote biodiesel adoption. ADM also invests in low-carbon fuel projects, including renewable diesel and sustainable aviation fuel (SAF).

3. BP p.l.c.

• BP is increasing its biofuel investments, aiming for a larger share in the biodiesel market. The company plans to produce more biodiesel from waste oils and agricultural residues. BP has also partnered with Neste to expand renewable fuel supplies in Europe and North America.

4. Bunge Ltd.

• Bunge has expanded its biodiesel operations in South America and Europe, focusing on sustainable soybean and canola oil feedstocks. The company recently acquired a biofuels plant in the U.S. to boost production capacity. Bunge also works on reducing carbon emissions across its supply chain.

5. Cargill Incorporated

• Cargill is investing in biodiesel production facilities to support renewable fuel demand. The company has partnered with downstream energy firms to distribute biodiesel globally. Cargill also emphasizes sustainable sourcing, using waste oils and non-food-grade feedstocks to minimize environmental impact.

Conclusion

The Biodiesel Fuel Market is set for strong growth, driven by rising demand for clean energy and supportive government policies. Key factors like stricter emission rules, higher fossil fuel prices, and the push for energy independence are boosting biodiesel adoption. Companies like ADM, BP, and Cargill are investing heavily in production and sustainable feedstocks, ensuring a steady supply. Emerging markets in Asia and Latin America offer new opportunities, while technological advancements improve fuel efficiency.

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