Hydrotreated Vegetable Oil Market (2025 - 2035)

Hydrotreated Vegetable Oil Market Size and Forecast Outlook (2025 to 2035)

The Hydrotreated Vegetable Oil (HVO) market is witnessing a dynamic transformation as the call for sustainable and cleaner fuel alternatives mounting. The HVO market value was roughly USD 19 billion in 2023 and grew sharply in 2024 with a year-on-year growth of 11.4% to USD 21.2 billion.

Forecasted to expand to USD 23.8 billion by 2025. In the forecast period of 2025 to 2035, the global HVO market is expected to maintain a CAGR of 12.7%, which results in a market value of about USD 78.5 billion by the end of 2035.

HVO is now being established in the market as an advanced biofuel that can cut greenhouse gas emissions, increase engine performance and assist in achieving circular economy objectives. In contrast to conventional biodiesel, HVO is generated through hydroprocessing, which removes oxygen and contaminants, resulting in a more efficient, stable and well burning fuel. Europe and North America are also reasons why governments around the world promote HVO with blending mandates, tax incentives and renewable energy targets.

The growing use of renewable diesel for transportation, especially in heavy-duty vehicles, aviation, and marine sectors, is one of the leading factors behind market growth. Furthermore, the global awareness of climate change and urgency for decarbonisation of the entire fuel supply chain is driving both public and private actors to invest in large-scale HVO production plants.

The European Union has previously legislated for strict HVO consumption, with emissions regulations and government incentives evidenced through commitment to initiatives such as the Renewable Energy Directive (RED II.) Top contributors include Sweden,Finland, the Netherlands and Germany.

North America is also climbing rapidly up the ranks; the USA is experiencing high growth of HVO uptake due to such things as California’s Low Carbon Fuel Standard (LCFS) and other state-level policies. Renewable diesel solutions also garnering interest in the Asia Pacific; especially in countries like Japan and South Korea.

Some of the major players in the HVO market are: Neste Corporation, TotalEnergies, ENI, Diamond Green Diesel, Preem. These businesses are increasing their refinery capacities while also requiring strategic collaboration with feedstock suppliers to ensure a sustainable pipeline of used cooking oil, tallow and other waste fats. Technological advances and the diversification of feedstock help these businesses to scale and reduce cost.

With rising demand from aviation, logistics, and public transportation, the potential application range of HVO is extending beyond the current industrial usage. HVO blending with fossil diesel is considered an interim measure to reach carbon neutrality.

Semi-Annual Market Update on Hydrotreated Vegetable Oil Industry Trends

This semi-annual market breakdown highlights the pace of growth across overlapping forecast cycles, informing regional momentum, policy impacts, and infrastructure readiness.

The 2024 to 2034 cycle saw incremental market growth, moving from 11.9% in H1 to 12.3% in H2, driven by increased output from refineries as well as more favorable regulatory frameworks. As the market entered the 2025 to 2035 cycle, growth of the market accelerated again with H1 at 12.5% and H2 peaking at 12.7%, fuelled by widespread commercial uptake and international decarbonization commitments.

The hydrotreated vegetable oil has high growth potential in the market. The intersection of favorable government policies, technological innovation, and increasing environmental awareness highlights the urgent significance of HVO in shaping the future of sustainable energy.

Market Concentration

In Tier 1, the HVO market is structured with international energy conglomerates and biofuel specialists leading the market, with a firm grip on production, technological capabilities, and global supply chains. These companies have made major investments in both advanced infrastructure and proprietary hydrotreatment processes and feedstock flexibility.

Neste, a Finland-based leader, has a stronghold on the renewable diesel and sustainable aviation fuel (SAF) industry from HVO, utilizing a broad range of waste and residue oils. ENI (Italy) and TotalEnergies (France) are also in this tier, repurposing regular refineries to process HVO fuels to meet growing EU decarbonization targets.

These Tier 1 players by virtue of economies of scale, long-term feedstock contracts and government-backed sustainability initiatives (heavily in Europe and North America) get to enjoy these benefits for now.

Tier 2 includes mid-caps energy and regional refiners that are expanding the production of biofuels to satisfy demand for low-carbon fuels. Other companies, such as Preem (SWE) and Diamond Green Diesel (Valero and Darling Ingredients, USA a joint venture) are taking market share by starting HVO production from animal fats, used cooking oil and other second-generation feedstocks.

These firms are developing renewable diesel for heavy-duty transport and SAF for aviation and working with governments and logistics firms to bolster regional supply chains. These Tier 2 players are essential to meeting national biofuel blending mandates, substituting for fossil fuel use.

Tier 3 consists of emerging biofuel companies, independent refiners, and agri-tech startups focused on niche feedstocks such as algae oil, tall oil, or camelina. Others are concentrating on creating next-gen HVO or allowing modular refining plants to smaller geographies.

Possibilities are from startups taking long positions on decentralized HVO production or looking to build export-oriented biofuel hubs in Southeast Asia and Latin America. These companies are also often dependent on partnerships, technology transfer and pilot operations in their efforts to demonstrate feasibility, attract green investors.

Understanding Shift in Hydrotreated Vegetable Oil Demand Trends and How Key Brands Are Addressing To This

Accelerated Demand for Renewable Diesel Alternatives

Shift: Key HVO markets are racing toward net-zero targets, and demand for HVO as a renewable diesel option has surged. Low carbon fuel standards are being mandated by governments across the EU, USA and parts of Asia, opening new opportunities for bio-based diesel fuels.

Strategic Response: HVO went to scale Broadcast Report: Energy Giants From Neste to Total Energies to ENI, etc, have built HVO capacity by making dogs out of cats - refineries into Bio-refineries. Neste has also increased production in both the Netherlands and Singapore, and ENI’s Venice plant produces HVO only. Such efforts are serving to satisfy renewable fuel blending requirements.

Movement Towards Waste-Based Feedstocks and Circular Economy Models

Shift: An increasing shift away from virgin vegetable oils toward waste-based feedstocks, including used cooking oil (UCO), animal fats, and tallow, is being adopted to boost sustainability metrics and drive down lifecycle emissions.

Strategic Response: Companies such as Renewable Energy Group (Chevron), Valero, and Cargill have begun investing in UCO collection and pre-treatment infrastructure. The second helps support their HVO production pipelines and ESG commitments. Getting feedstock secure-Call on USA Restaurant & Foodservice chains partnerships

Interest in Sustainable Aviation Fuel (SAF) by the Aviation Industry

Shift:Hydroprocessed esters and fatty acids-derived (HVO) synthetic paraffinic kerosene (SPK) is becoming a new frontier in sustainable aviation fuel. To help achieve net-zero emission targets, airlines and governments are dubbing for greater use of SAF.

Strategic Response: Next-gen reFuels™: These sustainable fuels (derived from HVO) are gradually being introduced to clients being served by companies like KLM, Lufthansa, SkyNRG, World Energy and Neste. They are spurred on by USA initiatives such as the USA Blender’s Tax Credit and EU initiatives like EU Fit for 55.

A Distinct Advantage at Play in Colder Conditions

Shift: Meanwhile, HVO has excellent cold flow properties and high cetane numbers compared with FAME biodiesel, which means these fuels will be appealing to transport fleets operating in cold climates, e.g., Scandinavia, Canada, and Northern USA.

Strategic Response: HVO100 has been certified for engines supplied by Volvo Trucks, Scania, and Mercedes-Benz Trucks. Because of its drop-in fuel compatibility and proven performance in cold weather, public transportation fleets in Sweden and Finland are steadily moving over to HVO.

Continued Expansion of HVO Retail Distribution Networks

Shift: HVO100 is expanding from use in industry to automotive fuel dispensers, notably in Europe. Consumers and small businesses are looking for cleaner choices when it comes to light-duty vehicles.

Strategic Response: HVO100 is already being sold at retail by gas station chains such as Preem (Sweden), Shell (Netherlands), and Q8 (Belgium). This focus on being a premium green diesel has helped uptake with environmentally conscious drivers.

Co-Processing and Refinery Flexibility Investments

Shift: In the move toward lower capital costs and faster renewable diesel deployment, refiners are diversifying into co-processing, blending vegetable oils into existing hydrocrackers alongside fossil feedstocks.

Strategic Response: ExxonMobil and Shell introduced co-processing capabilities at specific refineries. This enables an easy transition without full-scale retrofitting and speeds up the availability of renewable diesel in the market.

Regulatory Certainty and Carbon Intensity Scoring

Shift: More and more governments implement carbon scoring systems and traceability frameworks for biofuels that will impact feedstocks selection and market eligibility.

Strategic Response: HVO producers are implementing blockchain-based traceability and carbon lifecycle systems There is a growing emphasis on certifications such as ISCC and RSB to show compliance and access to the market.

Cost Competitiveness and Feedstock Volatility Issues

Shift: Cost and availability of feedstock affects pricing of HVO The fluctuations in vegetable oil prices and constrained waste oil supply are volatility factors for long-term contracts.

Strategic Response: To mitigate risk, players like Diamond Green Diesel and TotalEnergies are vertical integration, diversifying feedstock sources and pursuing hedging strategies. Governments are also providing subsidisation to cover the cost difference with fossil diesel.

Infrastructure Development through Public-Private Partnerships

Shift: HVO production and utilization will require infrastructure development and cooperation across sectors (governments, energy companies and logistics providers) and this will happen organically.

Strategic Response: The TotalEnergies-Veolia project, and Neste’s partnership with Rotterdam Port, are schemes to shore up supply chain resilience. Investor-owned public sector investment in HVO pipelines and storage terminals is also increasing in places like California and the Nordics.

Branding and Consumer Education of Renewable Diesel

Shift: In turn, as HVO goes into mainstream fuel channels, end-user awareness and trust in the benefits of renewable diesel is becoming critical to drive uptake.

Strategic Response:Neste’s marketing campaigns (“Drop-In. Drive On.”) and Preem are promoting reduced CO2 emissions, engine compatibility and optimal fuel performance. To increase transparency for consumers, eco-labeling and QR-code based traceability at fuel pumps is being pilot tested.

Country-wise Insights

The following table provides projected growth rates for the top five countries in the Hydrotreated Vegetable Oil (HVO) Market between 2025 and 2035:

United States: Strong Policy Support and Renewable Energy Targets Drive HVO Growth

After months of scrutiny on new diesel engines, domestic HVO markets in the USA remain robust and there are strong national and state-level push on new renewable fuel standards. Hydrotreated vegetable oil has become a checklist play option in the transition to sustainable aviation fuel (SAF) and cleaner diesels as the world increasingly scratches its head about carbon in transportation and logistics.

Several USA refineries have been repurposed or newly built to turn renewable feedstocks such as used cooking oil, tallow, and plant-based oils into HVO. So too are the regulatory support of the Environmental Protection Agency (EPA), the Low Carbon Fuel Standard (LCFS) in California, and SAF Grand Challenge efforts.

To guarantee a secure feedstock source, big oil companies and biofuel manufacturers are forging new partnerships with agricultural providers and waste oil recyclers. Moreover, the push towards fleet decarbonization targets in commercial transport, freight and aviation have increased the demand for drop-in HVO fuels.

Germany: Decarbonization of Transport Sector Fuels HVO Demand

Germany is at the forefront of the European market for HVO, backed by ambitious climate goals and a strong drive toward alternative fuels. These are the main reasons this biofuel is in demand, and becoming an integral part of the biofuel policies of the country, thanks to the Renewable Energy Directive (RED II) and the upcoming greenhouse gas quota regulations.

Opportunities for the HVO suppliers are vast after the German government has been working on reducing transport emissions, especially in heavy-duty logistics, public buses, and railways. In addition, due to bans on palm oil-based fuels, investments in feed stocks from domestic and waste sources are being made, which are in line with sustainability goals.

German consumers, businesses, and policymakers all place a high value on low-carbon and circular economy principles and are stimulating innovation in feedstock traceability, lifecycle assessments (LCA), and eco-label certifications. Numerous HVO blended or HVO Pure fueling stations are available-diesel users are increasingly turning to this alternative, from logistics operators to agricultural machinery fleets.

Urbanization and biofuel push continue to drive market growth in India

Owing to rising energy demands, swift urbanization, and push by the government to significantly reduce oil imports and eliminate emissions, the market is projected to grow at a significant pace. As a result of the Country’s National Bio-Energy Mission and Biofuel Policy initiatives, advanced biofuels such as HVO are now getting noticed by both public and private stakeholders.

The large availability of feedstock in India, including non-edible oils, agricultural waste, and used cooking oil, makes a case for decentralized HVO production to cater to domestic fuel demands. The country is also developing new refineries with next-gen technology and working with overseas partners for technology transfer and investment in HVO processing capabilities.

With government requirements to produce cleaner fuels for transportation and power generation, and more aggressive climate action plans set by cities, demand for scalable, low-carbon fuel solutions such as HVO is only expected to grow. HVO is for example also being researched as part of a sustainable way to fuel aircraft and marine vehicles, focusing on export-driven fuel strategies.

Startups and renewable energy companies in India are coordinating with municipalities, restaurant chains, and biodiesel aggregators to collect feedstock, further bundling the HVO ecosystem.

Category-Wise Insights

Pure HVO Emerges as a Key Driver in Clean Fuel Transition

This renewable diesel product (pure Hydrotreated Vegetable Oil (HVO)), which consists solely of waste oils and fats with no fossil fuel blend, is now central to decarbonization strategy in the transportation and logistics process.

In Europe and North America, governments are backing HVO as a drop-in fuel that delivers low emissions while still being able to be used in existing diesel engines making it very appealing to fleet operators and public transport agencies because of its high cetane number, lower sulfur and a substantial reduction in lifecycle greenhouse gas emissions.

Increasing pressure for energy independence and net-zero commitments is driving investments into both big scale HVO production facilities. A strategic expansion by key refiners and biofuel innovators (infrastructure) will lead to a global expansion, with a lot of projects in Sweden, Finland, Singapore, and the USA.

Further, Pure HVO has this additional advantage of not requiring any modification in the complete engine, which makes it a more acceptable option than biodiesel blends, thus broadening its market reach in commercial segments in both on-road and off-road applications.

Transportation Sector Dominates Demand for Renewable Diesel Applications

Hydrotreated Vegetable Oil consumption is dominated by the transportation sector, experiencing notable adoption among heavy-duty fleets, marine vessels, and ground support equipment in the aviation sectorin order to reduce their reliance on fossil diesel.

The fact that HVO can be used as a direct replacement for fossil-based diesel fuel without requiring any changes in engine performance or modifications to the fuel system has made it a no-brainer solution for the large-scale logistics provider, long-haul trucking and urban transit system companies who are moving towards renewable energy sources.

In addition to all of the above, the European Union's Renewable Energy Directive II (RED II), and California's Low Carbon Fuel Standard (LCFS) regulatory mandates are still promoting the uptake of HVO in transportation applications.

There are more accessible HVO fueling networks due to partnerships between fuel distributors and logistics providers. As consumer brands and supply chain operators strive to reduce their Scope 3 emissions, the use of HVO in transportation is expected to increase, reinforcing its widespread use in the renewable fuel sector.

Competition Outlook

The emergence of hydrotreated vegetable oil (HVO) in particular has witnessed very early on a really massive amount of competition and technological innovations as worldwide power corporations and biofuel producers drive the marketplace.

Leading heavyweights in the sector such as Neste, Valero Energy and Repsol are well entrenched to dominate the space by deploying advanced fuels refining technologies, broad feedstocks supply chains and enhanced investments in renewable fuel operations.

These companies are ramping up production capacities alongside boosting the sustainability credentials and geographic scope to benefit from the runaway demand for low-carbon fuels from the aviation, transport and industrial sectors.

For instance:

• Neste, based in Finland, is globally recognized as the largest producer of renewable diesel and sustainable aviation fuel (SAF) from waste and residue raw materials. Its innovative feedstock flexibility and continued investment in global expansion activity place it at the forefront of its market.
• In North America, Valero Energy is already a major producer of HVO through its joint venture Diamond Green Diesel. Combining renewable fuel production with legacy refinery intangible provides cost efficiencies and speeds up scaling, according to the company.
• In particular, Repsol, Total, and Cepsa are on an aggressive crowd for biofuels in Europe, and have multiple HVO facilities either being developed or online, all aligned with EU decarbonization targets and mandates for renewable energy.

Other firms such as UPM Biofuels and Preem are helping to enhance bio-refinery capacities based on forest-based residues and other sustainable feedstocks as well as creativity in procurements, contributing to the availability of domestic lignocellulosicfeedstocks.

Vertical integration is also a strategy being utilized by REG (Renewable Energy Group), which became part of Chevron in 2022, who is also cementing their national presence in the USA renewable diesel market through technology adoption and investment.

Eni and World Energy are also partnering and investing into renewable diesel and SAF production to target both the commercial transport and aviation sectors, further establishing cooperation.

With global carbon neutrality targets heating up, competition in the HVO market will depend on feedstock diversification, lifespan emissions reduction, government policy support, and improvements in refining technology (HVO). Players with the ability to align technological innovation with global sustainability commitments are well-positioned to lead the rapidly evolving low-carbon fuel landscape.

Leading Brands

• Neste
• Valero Energy
• Repsol
• UPM Biofuels
• Preem
• REG
• Total
• Cepsa
• Eni
• World Energy
• Others

Segmentation of the Hydrotreated Vegetable Oil Market by Feedstock, Application, Production Method, and Region

By Type:

Based on type, the renewable diesel industry is bifurcated into pure HVO (Hydrotreated Vegetable Oil) and co-processing methods.

By Application:

Renewable diesel is used across various applications, including transportation, industrial power generators, and other niche uses.

By Region:

Regionally, the market is segmented into North America, Europe, Asia Pacific, the Middle East and Africa, and Latin America.