The Hydrotreated Vegetable Oil (HVO) Market is entering a high-growth phase as governments, fuel producers, logistics operators, and transportation companies seek lower-emission alternatives to conventional fossil diesel. HVO, also commonly referred to as renewable diesel, is a paraffinic hydrocarbon fuel produced by hydrotreating renewable oils, fats, wastes, and residues. Unlike conventional biodiesel based on fatty-acid methyl ester chemistry, HVO can offer drop-in compatibility with suitable diesel applications and can be used either as a blend or, where approved, as HVO100.
According to the provided market assessment, the global Hydrotreated Vegetable Oil Market was valued at USD 2.281 billion in 2024 and is projected to reach USD 30.98 billion by 2035, expanding at a 26.76% CAGR from 2025 to 2035. The market is expected to benefit from the accelerating transition toward sustainable fuels, tighter emissions policies, renewable fuel mandates, and increasing interest in utilizing waste-based feedstocks. At the same time, limited feedstock availability, production economics, regulatory differences, and competition for renewable oils and fats are becoming important factors shaping the industry’s future.
The competitive landscape includes major energy, chemicals, renewable-fuel, and technology companies such as Neste (Finland), TotalEnergies (France), Renewable Energy Group (US), Cargill (US), BASF (Germany), ENI (Italy), Chevron (US), and UOP (US). Competition is centered on renewable-feedstock sourcing, refinery capacity, hydroprocessing technology, production efficiency, geographical reach, sustainability credentials, and the ability to supply fuel markets under evolving regulatory frameworks. Neste, for example, is expanding its Rotterdam renewable-products capacity, with the expansion scheduled to increase the refinery’s renewable-product capacity to 2.7 million tons annually after completion.
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Market Overview
HVO is produced by converting renewable oils and fats into hydrocarbons through hydrogen-based treatment and refining processes. The resulting fuel has chemical characteristics closer to petroleum-derived diesel than traditional biodiesel. This characteristic is important because it allows HVO to participate in existing fuel distribution and transportation ecosystems with comparatively limited infrastructure changes, subject to engine and fuel-system approvals.
The market’s growth is being supported by the broader decarbonization of road transportation, commercial fleets, marine transportation, industrial equipment, and aviation. HVO technology is also becoming strategically important because the same hydroprocessing platforms can support production of sustainable aviation fuel (SAF), allowing producers to adjust their output according to market demand. Neste has highlighted the ability to process diverse renewable feedstocks and switch between renewable diesel and SAF as an important element of operational flexibility.
HVO Market Segmentation Analysis
By Feedstock
Feedstock is one of the most important segments because the availability, quality, sustainability profile, and cost of raw materials directly affect HVO production economics. The segment includes vegetable oils, used cooking oil, animal fats, waste and residue oils, and other renewable feedstocks.
Vegetable oils can provide a consistent raw-material stream, but sustainability considerations and competition with food and other industrial applications can influence their attractiveness. Consequently, waste-based materials such as used cooking oil and animal-fat waste are becoming increasingly important. Neste states that 95% of its global renewable raw-material inputs in 2025 were waste and residues, with animal-fat waste, used cooking oil, and wastes from vegetable-oil processing among its major inputs.
However, feedstock availability is emerging as a structural constraint. Used cooking oil collection depends on actual consumption and disposal volumes, while animal-fat availability is connected to meat-processing activity rather than fuel demand. This creates competition among renewable-fuel producers for limited raw materials.
By Application
Based on application, the market can be analyzed across road transportation, aviation, marine transportation, industrial applications, and other fuel uses.
Road transportation represents a major application because HVO can provide a renewable alternative for diesel-powered passenger vehicles, trucks, buses, delivery fleets, and commercial equipment where compatible. Heavy-duty transportation is particularly relevant because electrification can be more challenging for long-distance and high-load operations.
Aviation represents another important growth avenue through the production of HEFA-based SAF. Although aviation fuel is technically distinct from conventional HVO used in road vehicles, the same renewable oils, fats, hydroprocessing capabilities, and feedstock supply chains can serve both markets. Neste’s Rotterdam refinery began SAF production in 2025, demonstrating the increasing integration between renewable diesel and aviation-fuel production.
Marine and industrial applications can also create opportunities where liquid renewable fuels provide a practical alternative for equipment requiring high energy density and long operating ranges.
By Production Process
The production-process segment includes hydrotreating, hydrogenation, deoxygenation, isomerization, and associated pretreatment and refining stages.
During production, renewable feedstocks are first treated to remove impurities that could interfere with downstream processing. Hydrogen is then used in catalytic processing to remove oxygen and convert the feedstock into hydrocarbon molecules. Additional processing can improve fuel characteristics such as cold-flow performance and stability.
Technological development is increasingly focused on processing more difficult and diverse feedstocks. Neste and Chevron Lummus Global announced work on technology designed to convert lignocellulosic waste and residues into renewable fuels, including renewable diesel and SAF, with pilot results indicating performance improvements for these challenging materials.
By End User
The end-user segment includes transportation companies, fleet operators, fuel distributors, aviation companies, marine operators, industrial users, and other commercial consumers.
Fleet operators are particularly important because centralized fueling systems can make renewable diesel adoption easier to manage. Logistics companies can also use HVO as part of broader carbon-reduction strategies, particularly for heavy-duty vehicles where rapid electrification may not always be practical.
Aviation companies represent a growing adjacent customer base because renewable feedstocks and hydroprocessing infrastructure can support SAF production. Meanwhile, fuel distributors and energy companies remain essential to market expansion by integrating HVO into regional fuel networks.
By Region
Europe remains a critical HVO market because renewable-fuel mandates, decarbonization policies, and demand for lower-carbon transportation fuels support market development. EU HVO production reached approximately 3.9 million metric tons in 2025, according to the European Biodiesel Board.
North America is another major market, supported by renewable-fuel policies, refinery conversions, and growing renewable diesel production. The US market is particularly influenced by federal and state-level incentives and the economics of domestic production.
Asia-Pacific offers substantial long-term potential because of its large transportation sector, expanding industrial base, feedstock availability, and increasing interest in renewable fuels. Countries with established vegetable-oil industries can also provide important raw-material resources.
South America has opportunities arising from its agricultural and biofuel industries, while the Middle East & Africa (MEA) can gradually develop demand through transportation decarbonization, fuel diversification, and renewable-energy strategies.
Key Market Dynamics
The primary growth driver is the rising demand for sustainable fuels. Governments and businesses are increasingly looking for fuels that can reduce lifecycle greenhouse-gas emissions while utilizing existing engines and infrastructure.
Another important factor is the development of renewable-fuel mandates and compliance mechanisms. These policies can create predictable demand, although changes in incentive structures can also affect producer margins and investment decisions. Current European market conditions illustrate the challenge: demand is rising while feedstock supply remains constrained, creating competition for used cooking oil, tallow, and other renewable inputs.
Technology innovation is therefore becoming equally important. Producers are working to broaden feedstock portfolios, improve pretreatment, increase conversion efficiency, and develop pathways for previously difficult waste streams.
Industry Developments
1. Neste advances Rotterdam renewable-fuel expansion:
Neste’s Rotterdam refinery expansion is planned to raise annual renewable-product capacity to 2.7 million tons, with completion targeted for 2027. The project is expected to strengthen the company’s ability to produce renewable diesel and SAF at large scale.
2. Neste and Chevron Lummus Global develop waste-to-fuel technology:
In 2025, the companies announced progress in developing technology capable of converting lignocellulosic biomass and difficult waste and residue streams into renewable diesel and SAF. The development highlights the industry’s shift toward diversifying feedstocks beyond conventional oils and fats.
Competitive Landscape
The competitive environment is evolving from a conventional fuel-supply model toward one centered on renewable feedstock access, advanced refining technology, capacity expansion, regulatory compliance, and integrated supply chains.
Neste maintains a strong position through renewable-fuel production capacity, proprietary processing technology, and global feedstock sourcing. TotalEnergies and ENI are leveraging their established energy infrastructure to participate in renewable fuels, while companies such as Cargill bring expertise in agricultural commodities and feedstock supply. BASF contributes chemical and process expertise, whereas Chevron and UOP provide technology and refining capabilities. Renewable Energy Group has also contributed to the development of renewable diesel production in the US market.
Future competition is likely to increasingly depend on the ability to secure sustainable feedstocks at competitive costs while maintaining flexible production systems capable of responding to changing demand between renewable diesel and SAF.
Future Outlook
The Hydrotreated Vegetable Oil Market is positioned for significant expansion during the 2025–2035 forecast period. The projected rise from USD 2.281 billion in 2024 to USD 30.98 billion by 2035, representing a 26.76% CAGR, reflects the accelerating demand for renewable liquid fuels.
Nevertheless, the market’s trajectory will depend on balancing demand growth with feedstock availability. Expanding waste and residue collection systems, improving conversion technologies, increasing refinery capacity, and establishing consistent sustainability standards will be critical. As renewable fuels become increasingly integrated into transportation and aviation strategies, HVO is likely to remain an important component of the global transition toward lower-emission energy systems.
Frequently Asked Questions
1. What is driving the growth of the Hydrotreated Vegetable Oil Market?
The market is primarily driven by increasing demand for sustainable fuels, renewable-fuel policies, transportation decarbonization, expanding renewable diesel capacity, and technological advances that enable producers to process diverse waste, residue, and renewable feedstocks.
2. What is the projected growth rate of the HVO Market through 2035?
The Hydrotreated Vegetable Oil Market is projected to grow at a 26.76% CAGR from 2025 to 2035, increasing from USD 2.892 billion in 2025 to USD 30.98 billion by 2035, according to the provided market assessment.
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