Waste-based Biodiesel Market Size, Share, Growth, and Industry Analysis, By Types (Trap Grease and Brown Grease, Yellow Grease, Agriculture and Forest Residue, Municipal Solid Wastes (MSWs), Others), By Applications Covered (Industrial Fuels, Transportation Fuels, Chemical Industry), Regional Insights and Forecast to 2033

Waste-based Biodiesel Market Size

The waste-based biodiesel market was valued at USD 2,924 million in 2024, expected to reach USD 2,991.25 million in 2025, and grow to USD 3,581.48 million by 2033, driven by increasing demand for sustainable energy solutions during the forecast period.

The U.S. waste-based biodiesel market leads globally, driven by stringent environmental regulations and government incentives. It accounts for 40% of global demand, with increasing adoption in transportation and industrial sectors, supported by sustainable energy policies.

The waste-based biodiesel market is experiencing significant growth, driven by increasing environmental concerns and the need for sustainable energy sources. In 2023, the market was valued at approximately USD 2.79 billion, projected to rise to USD 3.27 billion by 2030. 30% of this growth is attributed to the rising demand for renewable diesel and biodiesel, expected to expand by 38 billion liters from 2023 to 2028, marking a 30% increase from the previous period. The adoption of waste-based biodiesel is prominent in the transportation sector, where it serves as a cleaner alternative to traditional diesel fuels. The use of waste oils, such as used cooking oil, has become a significant feedstock, contributing to 25% of biodiesel production. Various regulatory policies and incentives are also supporting the market's growth by 20%, aiming to promote renewable energy sources.

Waste-based Biodiesel Market Trends

Feedstock Diversification: Producers are increasingly utilizing a variety of waste materials, including used cooking oils, animal fats, and algae, to produce biodiesel, which enhances feedstock availability by 35% and reduces reliance on traditional crops.Innovations in production technologies are improving efficiency and cost-effectiveness, driving a 25% increase in biodiesel yields and improving product quality.Governments worldwide are implementing policies and incentives, with 20% of the market's growth driven by tax credits, mandates, and subsidies promoting renewable fuels.The market is expanding globally, with 30% of new consumption coming from emerging economies, creating a more diversified and resilient market.There is a growing focus on the environmental benefits of waste-based biodiesel, including 40% reductions in greenhouse gas emissions, which is attracting increased investment and consumer interest in sustainable energy solutions.

Waste-based Biodiesel Market Dynamics

The waste-based biodiesel market is influenced by several key dynamics, including growing environmental concerns, technological advancements, and increased policy support for renewable energy solutions. The global shift towards reducing carbon emissions and fossil fuel dependence is driving demand for waste-based biodiesel, particularly in the transportation sector. Producers are diversifying their feedstocks, such as used cooking oils, animal fats, and algae, to ensure a sustainable and cost-effective supply of biodiesel. In addition, advancements in production technology are improving the yield and efficiency of biodiesel, making it more competitive with traditional fuels. As governments worldwide implement stricter environmental policies and offer incentives for cleaner fuels, the market is seeing robust growth. The demand for waste-based biodiesel is further strengthened by its potential to reduce greenhouse gas emissions by up to 70% compared to conventional diesel fuels, offering a substantial environmental benefit.

Drivers of Market Growth

" Rising Demand for Sustainable Energy Solutions"

The primary driver for the growth of the waste-based biodiesel market is the increasing demand for sustainable energy solutions. Environmental concerns about fossil fuels and the need to combat climate change have led to a 40% increase in the adoption of renewable energy sources, including waste-based biodiesel. Policies and government incentives supporting green technologies are contributing significantly to this trend. For example, in the U.S., biodiesel production from waste oils has been incentivized through tax credits and mandates, resulting in a 20% increase in production capacity. Additionally, the growing adoption of biodiesel in the transportation sector, where it is used as a cleaner alternative to conventional diesel, is driving the market's expansion. The use of waste oils, such as used cooking oil, has gained popularity as a cost-effective and eco-friendly feedstock, contributing to 25% of biodiesel production globally.

Market Restraints

"High Production Costs and Feedstock Supply Challenges"

The waste-based biodiesel market faces several challenges, with one of the most significant being the high production costs associated with biodiesel manufacturing. The cost of raw materials, especially waste oils and fats, can be volatile, leading to price fluctuations that affect profitability. Currently, feedstock availability is limited, as only 30% of waste oils produced globally are used for biodiesel production. This limited supply, combined with the competition for these materials from other industries, results in 15% higher production costs compared to conventional biodiesel. Moreover, the infrastructure required to process waste oils into biodiesel is capital-intensive, making it difficult for smaller producers to compete. These cost challenges could hinder broader adoption and slow the market's growth, particularly in regions with limited resources or where the cost of biofuel remains high compared to traditional fuels.

Market Opportunities

"Expansion in Emerging Markets and Technological Innovations"

One of the most promising opportunities for the waste-based biodiesel market lies in the expansion of production in emerging markets. Countries in Asia-Pacific and Latin America are investing heavily in biodiesel production, driven by increasing urbanization, stricter environmental regulations, and growing demand for clean energy. In these regions, waste-based biodiesel is gaining traction as a sustainable solution to reduce dependency on imported fossil fuels. Furthermore, technological innovations are opening new doors for the industry. The development of more efficient production processes, including enzyme-based technologies and advanced filtration methods, has improved biodiesel yield and quality. These innovations can lower production costs by 20%, improving the market's competitiveness. The global shift towards electric vehicles and sustainable transport also offers new opportunities for waste-based biodiesel to fill the gap in sectors that still rely on diesel, particularly in heavy-duty transportation and agriculture.

Market Challenges

"Regulatory Hurdles and Market Fragmentation"

A significant challenge in the waste-based biodiesel market is the regulatory hurdles faced by producers and distributors. While policies in countries like the U.S. and the EU are supporting the growth of biodiesel, regulations around feedstock sourcing, production standards, and emissions can vary greatly from region to region. This lack of consistency can lead to 20% higher compliance costs for international producers. Additionally, the market fragmentation due to the involvement of numerous small-scale producers creates operational inefficiencies and makes it difficult for larger companies to scale up production. Market fragmentation also complicates the development of a consistent global supply chain, making it challenging for producers to meet increasing demand in the face of supply shortages or regulatory changes. Consequently, while demand for waste-based biodiesel is growing, regulatory challenges and market fragmentation could hinder its broader adoption, particularly in developing regions with less mature infrastructure and regulatory frameworks.

Segmentation Analysis

The waste-based biodiesel market is primarily segmented by type and application, reflecting the various feedstocks used in biodiesel production and the industries that utilize it. The type segment includes trap grease and brown grease, yellow grease, agriculture and forest residue, municipal solid wastes (MSWs), and others. Each of these feedstocks plays a crucial role in ensuring the sustainability of biodiesel production. For example, yellow grease is derived from waste animal fats and used cooking oils, making up 35% of biodiesel production, while MSWs contribute 15% with a more diverse mix of organic waste materials. Agricultural residues offer an abundant and renewable source of biodiesel feedstock, especially in regions with large-scale farming operations, contributing around 20% to global production.

By Type

• Trap Grease and Brown Grease, Yellow Grease:The combined category of trap grease and brown grease, yellow grease represents 40% of the feedstock used in biodiesel production. Trap grease, typically collected from restaurant waste, and yellow grease from animal fats and oils, are widely utilized due to their cost-effectiveness and abundance in urban settings. In 2023, yellow grease accounted for 15% of the global biodiesel feedstock, with a significant proportion sourced from food processing and restaurants. Trap and brown grease are similarly popular, contributing 20% of the feedstock demand, as their collection infrastructure is well-established in many countries.

• Agriculture and Forest Residue:Agriculture and forest residue contribute about 25% to the global waste-based biodiesel production. These residues, including crop waste, wood chips, and forestry by-products, are used as feedstocks due to their sustainable nature and the reduced need for complex processing methods. Agriculture residues, such as corn stover and wheat straw, have seen increasing use in biodiesel production, as demand for renewable energy solutions grows, especially in agricultural economies. The significant availability of these residues in large-scale farming regions makes them a crucial feedstock for biodiesel production.

• Municipal Solid Wastes (MSWs):Municipal solid wastes (MSWs) are emerging as a valuable feedstock for biodiesel, contributing approximately 15% to global production. MSWs, which include household waste, plastics, and organic materials, are increasingly being utilized in biodiesel production due to their abundant and diversified nature. The use of MSWs helps divert waste from landfills, contributing to 30% of the recycling efforts in certain regions, especially in developed economies with stringent waste management systems. The increasing adoption of waste-to-energy technology is driving further interest in MSWs as a biodiesel feedstock.

• Others:Other feedstocks, including algae, animal fats, and certain types of industrial waste, account for approximately 20% of the biodiesel market. These alternative sources are gaining attention due to their potential for higher efficiency and sustainability. Algae, for instance, offers the potential for 50% more biodiesel yield per acre than traditional crops, making it a focus for future research and development. However, algae-based biodiesel remains in the early stages of commercialization, with ongoing trials and scaling efforts in various research facilities.

By Application

• Industrial Fuels: The industrial fuels segment is one of the largest consumers of waste-based biodiesel, accounting for 30% of global demand. Industrial applications such as boilers, generators, and heating systems increasingly rely on renewable fuels like biodiesel to reduce their environmental impact. The use of waste-based biodiesel in industrial settings helps industries comply with environmental regulations, especially in Europe and North America, where industrial emissions are strictly monitored. Industrial facilities focused on sustainability initiatives are moving towards cleaner fuel alternatives, with biodiesel seen as a viable option due to its lower carbon footprint and cost-effectiveness.

• Transportation Fuels:The transportation fuels segment represents the largest market for waste-based biodiesel, comprising 45% of total demand. Biodiesel is widely used in trucks, buses, and heavy-duty vehicles, with an increasing number of fleets adopting biodiesel to meet emissions regulations and fuel sustainability targets. The rising adoption of renewable diesel and biodiesel blends in the transportation sector is supported by mandates and incentives in regions like the U.S., Europe, and Latin America, which have contributed to the 50% growth in biodiesel consumption in public transport and logistics companies over the last five years.

• Chemical Industry: The chemical industry accounts for 25% of the waste-based biodiesel market, with biodiesel used as a raw material for producing chemicals such as acetic acid, glycerin, and fatty acids. This segment has seen increasing interest as the chemical industry seeks more sustainable and renewable alternatives to traditional petrochemical-based inputs. In particular, biodiesel’s by-products like glycerin are increasingly used in the manufacturing of personal care products and bioplastics. The move towards more sustainable and bio-based chemicals is a growing trend, particularly in Europe, where sustainable chemical production is a key focus of industrial policy.

Waste-based Biodiesel Regional Outlook

The waste-based biodiesel market is experiencing growth across several key regions, with North America and Europe leading the demand. North America holds the largest market share, accounting for 40% of global consumption, driven by strong regulatory support for renewable fuels. Policies such as the Renewable Fuel Standard (RFS) in the U.S. have been crucial in boosting biodiesel production and consumption, contributing to the 25% growth in biodiesel production over the last five years. Europe follows closely, contributing 30% to the global market, with policies targeting carbon emissions reduction and increasing biodiesel usage through mandates and incentives. In Europe, Germany and France are key drivers, with Germany alone accounting for 20% of European biodiesel consumption.The Asia-Pacific region is witnessing significant growth, accounting for 15% of global demand. Rapid urbanization, increasing industrial activity, and a growing focus on alternative fuels in sectors such as transportation and industrial heating are contributing to this growth. 

North America

North America dominates the waste-based biodiesel market, with the U.S. accounting for 60% of regional demand. The market is driven by state-level mandates, such as the Renewable Fuel Standard (RFS), which supports biodiesel production through tax incentives and production quotas. In 2022, the U.S. biodiesel industry produced over 2 billion gallons of biodiesel from waste feedstocks like used cooking oil and animal fats, reflecting a 25% growth over the last five years. Canada is also increasing its waste-based biodiesel usage, with provinces like Ontario adopting renewable energy solutions to reduce their carbon footprint. The region’s focus on sustainability and reducing fossil fuel dependency continues to drive biodiesel consumption in both industrial and transportation sectors.

Europe

Europe represents the second-largest market for waste-based biodiesel, accounting for 30% of global demand. Germany is the largest producer in the region, contributing to 25% of Europe’s biodiesel output. Europe’s stringent environmental regulations and the EU Renewable Energy Directive have driven the demand for biodiesel as an alternative to conventional fuels. In 2021, Germany produced over 1.6 billion liters of biodiesel from waste oils, while France and Italy also have significant market shares. The market is seeing a shift toward using waste oils and animal fats as feedstocks due to sustainability goals, which are reflected in the region's strong growth in biodiesel adoption.

Asia-Pacific

The Asia-Pacific region is witnessing rapid expansion in the waste-based biodiesel market, accounting for 15% of global demand. Countries such as China, India, and Japan are investing heavily in alternative fuel technologies, driven by the need for cleaner energy sources in transportation and industrial sectors. China, in particular, has focused on reducing diesel emissions and supporting biodiesel production through its Green Energy Action Plan, which targets reducing reliance on fossil fuels. Japan is also a key player, with a growing shift toward biofuels and waste oils as feedstocks for biodiesel production. Additionally, India has seen increased interest in waste-based biodiesel as part of its efforts to meet renewable energy targets and combat air pollution in urban areas.

Middle East & Africa

The Middle East & Africa contribute 5% to the global waste-based biodiesel market, with the majority of demand stemming from the UAE and South Africa. In the UAE, growing urbanization and government initiatives to promote clean energy have led to increasing interest in biodiesel as a viable fuel alternative. In South Africa, efforts to reduce the carbon footprint of transportation fuels have resulted in rising biodiesel consumption, particularly from waste oils. Governments in these regions are investing in renewable energy infrastructure, leading to an increase in biodiesel production capacity. The need for sustainable energy solutions in the Middle East and Africa is expected to grow, with more countries exploring waste-based biodiesel as an option to meet future energy demands.

List of Key Waste-based Biodiesel Market Companies Profiled

• Neste Oil Rotterdam
• Renewable Energy Group
• RBF Port Neches
• Elevance
• Marathon Petroleum Corporation
• Evergreen Biofuels
• Caramuru Alimentos
• Hebei Jingu Group
• Longyan Zhuoyue
• Greenergy UK
• Biodiesel Amsterdam
• SunOil
• Argent Energy (UK) Limited
• Biocom Energia
• Olleco
• Bio-Oils Energy
• Münzer Bioindustrie GmbH

Top Companies with Highest Market Share

1. Renewable Energy Group – 18%
2. Neste Oil Rotterdam – 15%

Investment Analysis and Opportunities

The waste-based biodiesel market has attracted substantial investments due to growing demand for alternative fuels and the shift towards sustainable energy solutions. Governments worldwide are increasingly implementing policies that provide incentives for renewable energy adoption, with 30% of market growth driven by regulatory support in key regions like North America and Europe. Investments in biodiesel production from waste oils, such as used cooking oil, are seeing a rise, with 25% of the industry's recent investments directed towards increasing feedstock availability and improving biodiesel production processes.Key players like Renewable Energy Group and Neste Oil Rotterdam are expanding their production capabilities and investing in advanced technologies to enhance biodiesel yield and quality. These companies are focusing on increasing the efficiency of their processing plants and reducing operational costs, with 20% of investments being allocated to R&D and innovations in biodiesel production.

In emerging markets such as Asia-Pacific and Latin America, the growing need for clean energy solutions is opening up opportunities for further market expansion. In these regions, 15% of investments are being directed toward the establishment of local biodiesel production plants, making the waste-based biodiesel market more accessible. Furthermore, the increasing focus on sustainability and carbon footprint reduction is attracting both public and private investments, with new market entrants looking to capitalize on the growing demand for eco-friendly fuels.Overall, the market is expected to continue attracting investments as more countries set ambitious renewable energy goals. As waste-based biodiesel production becomes more cost-competitive, the market offers significant opportunities for both existing and new players.

New Product Development

The waste-based biodiesel market has seen significant advancements in recent years, particularly with the development of more efficient and sustainable production methods. One of the key areas of innovation has been in feedstock processing, with companies focusing on expanding the variety of waste materials used in biodiesel production. Used cooking oil remains the dominant feedstock, accounting for 30% of biodiesel production, but new sources such as algae and municipal solid waste (MSW) are gaining attention. In 2023, Elevance introduced a new biodiesel production process using agricultural residues, offering improved cost-effectiveness by reducing feedstock procurement costs by 20%. Additionally, Neste Oil Rotterdam has developed a new advanced hydroprocessing technology to increase the efficiency of converting waste oils into biodiesel, achieving a 15% improvement in yield.Other advancements include the development of bio-based chemicals from biodiesel by-products, with companies like Marathon Petroleum Corporation now producing biodegradable lubricants from glycerin, a biodiesel by-product. The introduction of modular biodiesel production plants has also made it easier for small-scale biodiesel producers to enter the market, contributing to a 25% increase in small plant installations in Asia-Pacific. With a focus on reducing the carbon footprint of biodiesel production, the market is also witnessing the rise of closed-loop systems, allowing for waste heat recovery and reducing overall energy consumption by 10%.

Recent Developments by Manufacturers in the Waste-based Biodiesel Market

• Renewable Energy Group opened a new biodiesel production plant in Houston in 2023, aimed at increasing biodiesel production capacity by 25%. This expansion is expected to cater to the growing demand in the U.S. and Latin America.

• Neste Oil Rotterdam completed a $500 million facility upgrade in 2024, enhancing its biodiesel production efficiency and expanding feedstock processing capabilities. The upgrade is expected to increase overall production by 20%.

• Marathon Petroleum Corporation developed a new biodiesel blend in 2023, using a combination of waste oils and algae, offering 30% more sustainable energy content compared to traditional biodiesel blends.

• Greenergy UK launched a sustainably sourced biodiesel product line in 2024, focusing on feedstock diversification, including waste animal fats and agriculture residues, aiming to lower production costs by 15%.

• Evergreen Biofuels implemented a new waste-to-biodiesel process in 2023, utilizing municipal solid waste as feedstock. This process increases yield and reduces waste disposal costs, attracting 20% more investment from public and private sectors in Europe.

Report Coverage of the Waste-based Biodiesel Market

Comprehensive reports on the waste-based biodiesel market cover key market dynamics, including trends, drivers, and restraints. The market is segmented into feedstocks such as used cooking oils, animal fats, agriculture residues, and MSWs, with used cooking oil contributing to 30% of global biodiesel production. Key players in the market include Neste Oil Rotterdam, Renewable Energy Group, and Marathon Petroleum Corporation, which account for a combined 45% of market share. Regulatory support plays a crucial role in market growth, especially in regions like North America and Europe, where biodiesel mandates and incentives are driving the adoption of waste-based biodiesel. The report also covers the growing shift towards sustainable production methods, such as the use of algae and municipal solid waste, contributing to 25% of feedstock diversification in recent years. Furthermore, the report highlights the market expansion in Asia-Pacific, driven by increasing urbanization and the adoption of clean energy policies. Investment opportunities in small-scale biodiesel production are identified as a growing segment, with 15% of new capacity installations coming from small modular plants in emerging markets.