The global biodiesel market size was estimated at USD 36.48 billion in 2022 and it is expected to hit around USD 79.12 billion by 2032, expanding at a notable CAGR of 8.1% from 2023 to 2032.
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It is a renewable and clean-burning diesel alternative that may be utilized in current diesel engines that too without requiring any alterations. It usually includes recycled oils for cooking, feedstock, and animal fats. The market is anticipated to expand as demand for biodiesel to replace conventional fossil fuels in the transportation and power generation sectors rises. The market is quite fragmented since there are so many different suppliers and dealers.
On the other hand, the lack of production capacity and the high potential for R&D in the choice of feedstock for product manufacturing are likely to create chances for new market competitors. An important aspect driving the sector is the increased need for clean fuels that permit complete combustion while reducing Greenhouse Gas (GHG) emissions. Another factor boosting demand is biodiesel's excellent compatibility with modern diesel engines. The demand for biodiesel is anticipated to increase as a result of the growing population, an increase in the number of biodiesel-using automobiles, and other factors. In the automobile sector, biodiesel is highly sought after since it produces less GHGs. As a result, demand inside the United States is anticipated to rise during the course of the projection period.
A rising preference for biofuel, which is renewable and biodegradable, over fossil fuels, which are associated with higher GHG emissions are influencing the market demand. COVID-19 has an impact on biodiesel usage in the first half of 2020. Furthermore, increased demand for ecologically friendly and GHG emission-reducing gas is likely to drive market growth. Furthermore, government help such as subsidies and mandates suggest that the industry will continue to flourish.
Report Scope of the Biodiesel Market
|Market Size in 2023||
USD 39.25 Billion
|Market Size by 2032||
USD 79.12 Billion
|Growth Rate from 2023 to 2032||CAGR of 8.1%|
|Forecast Period||2023 to 2032|
|Segments Covered||Feedstock, Application, Production Process, and Geography|
|Companies Mentioned||FutureFuel Corp, Ecodiesel Colombia S.A., Manuelita S.A., TerraVia Holdings, Inc.,Renewable Biofuels, Inc., Ag Processing, Inc., Archer Daniels Midland Company (ADM), Wilmar International Ltd, Bunge Ltd., Cargill, Inc., Louis Dreyfus Company; Biox Corp, Munzer Bioindustrie GmbH, Neste Oyj, Renewable Energy Group, Inc.|
Key Market Drivers
Increasing demand for cleaner fuels to stimulate the global biodiesel market
Growing demand by the automotive sector
Key Market Challenges
Key Market Opportunities
Environmental concerns as well as depleting conventional energy sources
The feedstock segment for vegetable oils is further subdivided into soybean oil, canola oil, palm oil, corn oil, etc. Concurrently, animal fats section is divided into tallow, poultry, white grease, etc. The vegetable oil category accounted 96.4% of global revenue in 2022. But selection of raw materials usually varies by area, depending on feedstock availability and cost. The palm oil, which has been widely utilised in the manufacturing of biodiesel in nations such as Thailand, Germany, Indonesia, France is likely to be a key feedstock for the industry.
Indonesia & Thailand dominate production of palm oil, contributing for more than 79% of global output, along with a significant amount of the commodity utilised to produce biofuel. Whereas Europe was relying on feedstock imports from these Asian countries for biofuel manufacturing.
Based on application the fuel application sector accounted highest revenue share in 2022. In 2022, the automobile gasoline industry dominated product demand. Because it emits less Volatile Organic Compounds (VOCs) than traditional fuels such as diesel, the sector is projected to gain from rising demand for fuel in commercial automobiles as a substitute for crude oil.
The product is used in the marine industry and is anticipated to grow at a sizable CAGR throughout the course of the forecast period due to its biodegradability, lack of aromatics and sulphur, and lack of hazardous properties. Additionally, during the projection period, product sales in agricultural applications are projected to be driven by the development of the agricultural sector and increased automation. Governments all over the globe are constantly working to reduce GHG emissions by generating power from renewable sources. The demand for the product in power producing applications is therefore anticipated to grow at a high CAGR between 2023 and 2032.
Biodiesel Market Share, By Region, 2022 (%)
|Regions||Revenue Share in 2022 (%)|
The Europe region has captured highest market share in 2022. It has traditionally been the major market for the product due to early acceptance of the product in the region and government focus on switching to bio-based sources from carbon-emitting ones. In Europe, urea-coated oil, palm oil, animal fats, rapeseed oil, soybean oil, and sunflower oil are the most often utilised feedstocks for the production of biodiesel. Germany, the European country with the highest percentage of feedstock production, is the main driver of the region's product demand.
The less interest rate for procuring raw materials is predicted to increase consumption, accelerating market growth throughout the projection period in the region. Asia Pacific is similarly expected to grow at a rapid pace between 2023 and 2032.
It is anticipated that production would rise, which will probably fuel market expansion throughout the course of the projection year. However, market growth is anticipated to be constrained because palm oil is also used in the food industry. In order to reduce pollution and dependence on crude oil, the government's drive to promote green fuels is expected to spur market development throughout the anticipated timeframe. Additionally, by 2022, the Indian government plans to blend more than 5% biodiesel, which is anticipated to spur development during the course of the projection period. South and Central America will generate 10,960.1 million liters in 2022. The rise was attributed to higher domestic consumption as a result of higher levels of blending to use up extra palm oil production.
Segments Covered in the Report
By Production Process
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