The Hydrotreated Vegetable Oil (HVO) market is undergoing rapid expansion driven by global climate goals and the transition toward cleaner fuels. Valued at USD 21.2 billion in 2024, the market is expected to reach USD 23.8 billion in 2025 and surge to USD 78.5 billion by 2035 at a projected CAGR of 12.7%. HVO’s superior performance, low emissions, and compatibility with existing engines are propelling its demand across transportation, aviation, and marine sectors.

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Market Trends Highlighted

• Surging Demand for Drop-in Renewable Fuels: HVO's ability to seamlessly replace fossil diesel in existing engines without modification is fueling demand, especially in freight, aviation, and public transit.
• Feedstock Innovation & Circular Economy Integration: Used cooking oil, tallow, and agricultural residues are being utilized as feedstock, aligning HVO with circular economy principles and sustainability standards.
• Decentralized Production Expansion: Nations with vast agricultural or waste-based feedstock are establishing decentralized HVO facilities to ensure energy security and reduce imports.
• Policy-Driven Market Expansion: Government mandates, tax incentives, and renewable energy targets are accelerating HVO adoption, particularly in the U.S., Europe, and India.
• Transition to Sustainable Aviation Fuel (SAF): HVO is emerging as a key component of sustainable aviation strategies, offering a lower-emission path for the airline industry.

Key Takeaways of the Report

• The global HVO market is projected to grow from USD 23.8 billion in 2025 to USD 78.5 billion by 2035, registering a CAGR of 12.7%.
• HVO is outperforming traditional biodiesel in terms of engine compatibility, fuel stability, and emissions reduction.
• Key growth drivers include regulatory mandates (RED II, LCFS, SAF Grand Challenge), increasing investments in renewable infrastructure, and global decarbonization commitments.
• Countries like India (14.0%), China (13.4%), and Germany (12.8%) are leading the demand curve through strategic investments and policy frameworks.
• The emergence of HVO as a drop-in SAF solution is unlocking long-term potential in aviation and maritime sectors.

Regional Market Outlook

United States
CAGR: 12.1%
The U.S. market is being reshaped by strong federal and state mandates, with initiatives like the SAF Grand Challenge and Low Carbon Fuel Standard (LCFS) pushing HVO adoption. Major refineries are transitioning to renewable feedstock like used cooking oil, tallow, and soy-based oils to meet growing demand from commercial fleets and aviation.

Germany
CAGR: 12.8%
Germany leads the EU HVO landscape with robust decarbonization policies and strict feedstock sustainability requirements. Blending mandates, bans on palm oil, and investments in traceable, non-food feedstocks are fueling innovation and adoption across heavy-duty transport and logistics.

India
CAGR: 14.0%
India is the fastest-growing HVO market, driven by urbanization, energy diversification goals, and abundant availability of waste and non-edible feedstocks. Public-private partnerships are fostering domestic refinery growth and clean fuel production for both transportation and export.

China
CAGR: 13.4%
China's growing commitment to carbon neutrality, industrial modernization, and energy security is driving heavy investments in advanced biofuel capacity. HVO is gaining momentum as an alternative to fossil diesel and a potential contributor to China's sustainable aviation roadmap.

Japan
CAGR: 11.6%
Japan’s mature energy market is gradually integrating HVO into marine and freight applications. Regulatory pressure, coupled with industry demand for lower-carbon fuels, is stimulating investments in both domestic production and international sourcing of sustainable feedstocks.

Competition Outlook

The Hydrotreated Vegetable Oil market is becoming a focal point of innovation and collaboration across energy, agriculture, and waste management sectors. The competitive landscape is characterized by:

Leading Brands

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

Others