United States Biodiesel Market Trends Forecast 2025-2033

United States Biodiesel Market Size and Share Analysis – Growth Trends and Forecast Report 2025–2033

Published by Renub Research

Market Summary

The United States biodiesel market is projected to grow significantly, reaching US$ 20.29 billion by 2033, up from US$ 12.23 billion in 2024, growing at a CAGR of 5.79% during the forecast period of 2025 to 2033. This strong growth trajectory is fueled by an increasing push towards renewable energy adoption, robust federal and state-level incentives, and surging awareness about sustainable fuel alternatives. The U.S. biodiesel market is a cornerstone of the nation’s energy transformation strategy and is anticipated to play a critical role in decarbonizing key sectors.

What is Biodiesel and Why It Matters?

Biodiesel is a biodegradable, renewable fuel derived from vegetable oils, animal fats, or recycled grease. It is an eco-friendly alternative to petroleum-based diesel and can be used directly (B100) or blended in various proportions like B5 or B20 with conventional diesel. It fits seamlessly into existing diesel engines and infrastructure, making it an appealing solution for reducing greenhouse gas emissions.

Market Dynamics: Growth Drivers

1. Supportive Government Regulations & Renewable Fuel Standards (RFS)

The U.S. government plays a pivotal role in accelerating biodiesel adoption through mandates like the Renewable Fuel Standard (RFS), which obliges refiners to blend renewable fuels into the national fuel mix. Incentives like the Biodiesel Tax Credit (BTC) further enhance market affordability and encourage investment.

2. Rising Demand for Clean, Low-Carbon Fuels

With increasing concern over climate change, both public and private sectors are embracing low-emission fuels. States such as California, New York, and Washington have implemented aggressive carbon reduction targets, making biodiesel a critical tool for achieving those objectives.

3. Advances in Biodiesel Production Technology

Technological breakthroughs, such as hydrotreated vegetable oil (HVO) and transesterification processes, have made production more cost-efficient and scalable. Furthermore, research into algae-based and waste-derived biodiesel is expanding the feedstock base, improving sustainability and reducing feedstock competition.

Key Market Challenges

1. Volatility in Feedstock Prices

The cost of raw materials like soybean oil and animal fats is influenced by global supply chains, weather, and agricultural policies. Price instability can affect profit margins and slow down production scalability.

2. Competition from Other Green Alternatives

Biodiesel faces increasing competition from renewable diesel, electric vehicles (EVs), and hydrogen fuel. Renewable diesel, in particular, is gaining traction as it is chemically similar to petroleum diesel, allowing seamless integration into existing engines and fueling infrastructure.

Market Segmentation Analysis

By Application:

• Fuel: Dominates usage, especially in transport and municipal fleets.
• Power Generation: Used in decentralized renewable energy generation.
• Others: Includes industrial heating and residential heating (Bioheat®).

By Feedstock:

• Vegetable Oils: Soybean, canola, and corn oil.
• Animal Fats: Tallow, poultry fats, and used cooking oils.

State-wise Market Insights

1. California

Leading the market with its Low Carbon Fuel Standard (LCFS) and major use of biodiesel in transportation and agriculture. Home to major innovations and production facilities, such as the one recently opened in Bakersfield by BDI-BioEnergy.

2. New York

Mandates biodiesel blending in home heating oil (Bioheat®) and uses biodiesel in city fleets and public transportation. State-level climate action plans continue to fuel demand.

3. Washington

With a strong Clean Fuel Standard, this state encourages biodiesel adoption in both agriculture and logistics. Local feedstock availability strengthens supply chains.

4. New Jersey

Utilizes biodiesel across municipal services, transport, and heating, boosted by its proximity to major ports and distribution hubs.

Related Report

India Biodiesel Market

Europe Biodiesel Market

Biodiesel Market

Key Companies in the Market

• Archer Daniels Midland Company
• FutureFuel
• Neste’s
• Renewable Energy Group, Inc.
• Bunge Global SA
• Wilmar
• Shell

These players are involved in developing advanced technologies, expanding feedstock capabilities, and increasing production efficiency. Neste and REG are leading in sustainable aviation fuel (SAF) and HVO investments, pushing the boundaries of bio-based fuels.

10 Critical Questions Answered in This Report:

1. What is the projected market size of the U.S. biodiesel industry by 2033?
2. What is the expected compound annual growth rate (CAGR) of the market from 2025 to 2033?
3. Which feedstocks are most prominently used in biodiesel production in the United States?
4. How do federal mandates like the Renewable Fuel Standard (RFS) influence market development?
5. What key trends are driving the rise in biodiesel consumption nationwide?
6. What are the major hurdles faced by biodiesel producers regarding feedstock sourcing and price stability?
7. Which U.S. states are at the forefront of biodiesel adoption, and why?
8. How does biodiesel stand against competing energy alternatives like renewable diesel and EVs?
9. What role does technological innovation play in reducing biodiesel production costs?
10. Who are the key players in the U.S. biodiesel market, and how are they shaping industry dynamics?

Customization and Analyst Support

Renub Research offers 20% free customization, along with 52-week post-sale analyst support. Our customized services include:

• State-level and region-specific market forecasts
• Expanded company profiles
• Strategic market entry consulting
• Feedstock price trend analysis
• Competitor benchmarking and trade insights

Report Deliverables

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