Chicago, July 16, 2025 (GLOBE NEWSWIRE) -- The global green diesel market was valued at US$ 38.66 billion in 2024 and is anticipated to reach US$ 94.96 billion by 2033 at a CAGR of 10.50% during the forecast period 2025–2033.
The global energy landscape is undergoing a monumental shift, and at the forefront of this transformation is the burgeoning green diesel market. As nations and corporations race to meet stringent decarbonization goals, this renewable, drop-in fuel is emerging as a critical component in the transition away from fossil fuels. Chemically identical to petroleum diesel, green diesel offers a powerful combination of reduced emissions and compatibility with existing infrastructure, making it an immediately viable solution for heavy-duty transport, aviation, and power generation.
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This market article delves into the dynamic world of green diesel, exploring the key players, technological breakthroughs, and investment tidal waves that are defining its trajectory in 2024 and into 2025. We will examine the intricate web of feedstock supply chains, the global production surge, and the critical policy frameworks propelling its widespread adoption.
Key Findings in Green Diesel Market
| Market Forecast (2033) | US$ 94.96 billion |
| CAGR | 10.50% |
| Largest Region (2024) | North America (35%) |
| By Feedstock Type | Vegetable Oils (32%) |
| By Production Technology | Catalytic Hydrothermolysis (68%) |
| By End Use Application | Transportation (62%) |
| By Distribution Channel | Direct (65%) |
| Top Drivers |
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| Top Trends |
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| Top Challenges |
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The Dawn of a New Fuel: Green Diesel's Ascendant Market
The green diesel market is experiencing a period of unprecedented expansion, driven by a global imperative to mitigate climate change and enhance energy security. Unlike traditional biodiesel, green diesel is a hydrocarbon produced through advanced hydrotreating processes, making it a "drop-in" fuel that requires no engine or infrastructure modifications. This critical advantage is fueling its rapid adoption across the transportation sector. The primary impetus for this growth stems from robust government policies, such as the Renewable Fuel Standard (RFS) in the United States and the European Union's Renewable Energy Directive II (RED II), which mandate the blending of renewable fuels. The increasing shift toward sustainable energy is a core driver for the market's future. Corporate sustainability pledges and the financial incentives created by Low Carbon Fuel Standards (LCFS) and carbon credit programs are further accelerating market penetration, creating a powerful economic case for both producers and consumers of this cleaner alternative fuel. This confluence of regulatory pressure, corporate responsibility, and technological readiness has set the stage for a significant scaling of the green diesel industry through 2025 and beyond.
Titans of the Tank: Profiling Green Diesel's Production Heavyweights
The green diesel market is led by a cadre of established energy giants and specialized biofuel producers who are aggressively expanding their production capabilities. Neste Oyj, a Finnish company, stands as a global leader, reporting substantial revenues of USD 21,601.1 million in 2024. In the United States, Diamond Green Diesel (DGD), a joint venture between Valero Energy and Darling Ingredients, is a dominant force with a total annual production capacity of 1.2 billion gallons across its two facilities. The DGD plant in Norco, Louisiana, alone boasts a capacity of 982 million gallons per year. In the first quarter of 2024, DGD's sales volumes averaged 3.7 million gallons per day, generating an operating income of $190 million. Phillips 66 is another key U.S. player, having expanded its Rodeo, California, plant to a capacity of 800 million gallons in 2024, making it the second-largest facility of its kind in the country. Chevron Corporation also remains a leading producer, with its renewables division contributing to the company's strong Q4 2024 earnings of $3.2 billion. Meanwhile, Repsol of Spain made waves in October 2024 by launching "Nexa," its brand of 100% renewable diesel, directly at its service stations.
Unveiling 2025's Most Promising Startup Ventures
Beyond the established players, a new wave of innovative startups and targeted investment is broadening the horizons of the green diesel market. In Nebraska, the Love's Heartwell Renewables plant is on schedule to commence operations in 2025, adding 80 million gallons of annual capacity to the U.S. supply. Demonstrating the rapid pace of development, New Rise Renewables began its sustainable aviation fuel (SAF) production in Reno, Nevada, in February 2025, with a capacity to produce up to 3,000 barrels per day. In a significant technological adoption, Acelen Renewables announced in 2024 its use of Honeywell's advanced Ecofining technology, targeting a production of 20,000 barrels per day of both renewable diesel and SAF. A notable investment in Canada's growing market comes from Imperial Oil, an ExxonMobil affiliate, which is investing around $560 million to construct the nation's largest renewable diesel facility; this plant is expected to start producing 20,000 barrels per day in 2025. Highlighting the emergence of novel production pathways, Swiss cleantech firm Synhelion, which creates fuel from solar energy, is poised to enter the market, backed by key offtake agreements.
Charting Worldwide Green Diesel Production Volumes
Global production in the green diesel market is surging, with the United States taking a decisive lead in capacity expansion. U.S. renewable diesel production capacity was forecast to hit an impressive 5.1 billion gallons per year by the end of 2024. The U.S. Energy Information Administration (EIA) projected that daily production would average 209,000 barrels per day (bpd) in 2024, with a forecast to rise to an average of 234,000 bpd in 2025. This forms part of a larger trend that saw total U.S. biofuels production, including ethanol and other biofuels, reach a record 1.39 million barrels per day in 2024. The expansion in renewable diesel was a significant contributor to this record. Despite the strong annual growth, the market experienced some short-term headwinds, with U.S. production dipping to an average of 170,000 bpd in the first quarter of 2025, a 12% decrease from the same quarter in the previous year, partly due to profitability challenges. Meanwhile, in Europe, which holds a significant share of the global market, local demand remains robust, with the region consuming more than 95% of its own green diesel production in 2025.
From Farm to Fuel Tank: The Diverse Feedstocks Powering Green Diesel
The viability and sustainability of the green diesel market hinge on a diverse and resilient feedstock supply chain. Currently, the industry relies heavily on readily available fats, oils, and greases. The most common inputs include recycled animal fats (tallow), used cooking oil, inedible corn oil, and various vegetable oils. These materials are processed to create high-quality fuel that is chemically similar to petroleum diesel. Looking ahead, the industry is actively expanding its feedstock options to enhance supply chain resilience and reduce competition with food production. Significant research and development efforts are focused on so-called second and third-generation feedstocks. These include lignocellulosic biomass, such as wood, agricultural grasses, and crop residues, which are abundant and do not impact the food supply. Other promising future sources include municipal solid waste and forest residues, which support the principles of a circular economy by valorizing waste streams. Feedstock certification frameworks like the International Sustainability and Carbon Certification (ISCC) are becoming crucial for ensuring transparency and traceability.
Tapping into Third-Generation Biofuel Potential in 2025
Among the next wave of feedstocks, algae is generating significant excitement as a potential game-changer for the green diesel market. Considered a third-generation feedstock, algae can be cultivated on non-arable land and can utilize wastewater or saltwater, minimizing competition for land and freshwater resources. Many species of microalgae are particularly promising due to their high lipid oil content, which can range from 20% to as high as 50% of their biomass, making them an ideal raw material for biofuel production. The global market for algae-based green diesel is already gaining traction, reflecting the growing investment in this area. However, scaling up production to commercial levels faces hurdles. Techno-economic analyses conducted in 2025, based on future productivity targets, indicate a high minimum fuel selling price, estimated at 2.2 €/L for fuels produced via lipid extraction and 3.4 €/L for those produced via hydrothermal liquefaction (HTL). Overcoming these cost barriers through continued research and technological advances in cultivation, harvesting, and processing will be key to unlocking algae's full potential.
Nations Leading the Green Diesel Charge
A handful of nations are at the forefront of the green diesel market revolution, driven by ambitious climate policies and strategic investments. The United States currently leads the world in production capacity, with 22 operational renewable diesel plants as of January 2024 and a projected capacity of 5.1 billion gallons per year by the year's end. In Europe, which collectively accounts for a major share of the global market, countries like Germany, France, and the Netherlands are notable leaders. Their progress is underpinned by strong policy frameworks, particularly the EU's Renewable Energy Directive, which mandates a greater share of renewables in transport. Finland is also a key player, home to the pioneering global producer Neste. To the north, Canada is making significant strides, highlighted by Imperial Oil's $507 million investment in a renewable diesel facility in Alberta, set to come online in 2025. Brazil is another nation showing increasing interest, with a focus on developing its capacity through the adoption of advanced hydrotreating technology to leverage its vast agricultural resources for fuel production.
The Technological Vanguard, Innovations Driving Green Diesel Production Forward
Technological advancement is the engine powering the scalability and cost-competitiveness of the green diesel market. The dominant production method is hydrotreating, also known as Hydroprocessed Vegetable Oil (HVO), a process where renewable feedstocks react with hydrogen under high temperature and pressure. This technology creates a "drop-in" fuel that is chemically indistinguishable from petroleum diesel. Leading technology providers like Honeywell offer specialized solutions, such as their Ecofining™ process, which was adopted by Acelen Renewables in 2024 for a large-scale project. Following the core hydrotreating step, additional processes like hydrocracking and isomerization are often employed. Hydrocracking breaks down larger molecules to improve fuel efficiency, while isomerization rearranges molecular structures to enhance performance in cold weather. Beyond HVO, researchers and companies are developing other pathways, including catalytic fast pyrolysis (CFP), which shows great promise for converting solid lignocellulosic biomass into refinable bio-oil, a key focus of research in 2024.
Sealing the Deal: Key Distribution Pacts and Offtake Agreements of 2024
The growing acceptance of green diesel market is clearly reflected in the increasing number of significant distribution and offtake agreements announced in 2024. These deals are crucial for guaranteeing demand for producers and securing a stable supply of low-carbon fuel for end-users. In a landmark deal for the aviation sector announced in July 2024, Diamond Green Diesel committed to supplying an initial 1 million gallons of neat sustainable aviation fuel (SAF) to World Fuel Services for use by JetBlue at New York's JFK Airport, with an option for 4 million additional gallons. In ground transport, Colonial Oil partnered with Neste in February 2024 to significantly boost the availability of renewable diesel in Savannah, Georgia, and the wider southeastern U.S. European aviation is also advancing, with low-cost carrier easyJet signing a memorandum of understanding with Spanish energy company Moeve in late 2024 for SAF supply on key Spanish routes from 2025 through 2030. Highlighting innovation, Zurich Airport Ltd. signed a pioneering offtake agreement in December 2024 with Synhelion to purchase 30,000 liters of solar-generated diesel annually starting in 2027 for use in its ground vehicle fleet.
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The Road Ahead: How 2025 Policies are Shaping Market Acceptance
The trajectory of the green diesel market into 2025 and beyond is intrinsically linked to the strength and stability of government policies and corporate commitments. Regulatory frameworks like the U.S. Renewable Fuel Standard (RFS) and California’s Low Carbon Fuel Standard (LCFS) have been instrumental in creating the initial demand and investment security for the industry. Similarly, in Europe, the Renewable Energy Directive (RED II) has accelerated the adoption of green diesel by mandating its inclusion in the transport fuel mix. The growing demand is not purely policy-driven; corporations are increasingly adopting green diesel to meet their own sustainability targets and reduce their carbon footprint. This is especially true for hard-to-abate sectors like heavy-duty trucking and aviation, which see green diesel and SAF as one of the most viable, immediate pathways to decarbonization. As of 2025, the synergy between robust regulatory mandates, financial incentives from carbon markets, and a proactive corporate sector has created a fertile ground for the continued, rapid expansion of the green diesel market.
Global Green Diesel Market Major Players:
- Neste
- Diamond Green Diesel
- Chevron Renewable Energy Group
- Eni S.p.A
- TotalEnergies
- BP
- Phillips 66
- Gevo Inc.
- Universal Biofuels Private Limited
- Other Prominent Players
Key Market Segmentation:
By Feedstock Type
- Used Cooking Oil
- Animal Fats
- Vegetable Oils
- Palm Oil
- Rapeseed Oil
- Soybean Oil
- Sunflower Oil
- Algae Oil
- Others
By Production Technology
- Fischer–Tropsch Synthesis
- Biomass Fermentation
- Alcohols Oligomerization
- Catalytic Hydrothermolysis
- Catalytic Hydrotreating
By End-Use Application
- Transportation
- Road
- Rail
- Marine
- Aviation (SAF)
- Power Generation
- On-grid
- Off-grid
- Industrial Equipment
- Construction
- Mining
- Agriculture
By Distribution Channel
- Direct Sales
- Fuel Stations
By Region
- North America
- Europe
- Asia Pacific
- Middle East
- Africa
- South America
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