Hydrotreated Vegetable Oil (HVO) Market Size, Share, Growth, and Industry Analysis, By Type (Based on Ecofining Technology, Based on Co-Processing Technology, Other), By Application (Vehicle, Generator, Industrial Power System, Other), Regional Insights and Forecast From 2026 To 2035

Hydrotreated Vegetable Oil (HVO) Market Overview

The global hydrotreated vegetable oil (HVO) market is estimated at USD 20,439.36 million in 2026 and projected to reach USD 60,403.44 million by 2035. Market expansion is driven by increasing demand for renewable fuels, stringent emissions regulations, decarbonization initiatives, and growing adoption of sustainable alternatives to conventional diesel. Rising investments in biofuel production capacity and supportive government policies are further strengthening market development. The market is expected to register a CAGR of 12.8% during 2026–2035.

The hydrotreated vegetable oil market is expanding as transportation, aviation, marine, and industrial users seek renewable fuels compatible with existing diesel infrastructure. HVO is produced by hydrotreating renewable oils and fats, producing a paraffinic fuel that can be used as a drop-in alternative to conventional diesel. The market is increasingly shifting toward waste and residue feedstocks, including used cooking oil, animal fats, and vegetable-oil processing residues. Neste reported renewable diesel production of 3.313 million tons in 2025, demonstrating the scale of leading HVO production. The growing availability of renewable feedstocks, low-carbon fuel policies, fleet decarbonization programs, and refinery conversions is strengthening global HVO demand.

The United States market is supported by renewable diesel mandates, federal clean-fuel incentives, state-level carbon-intensity programs, and increasing production capacity. HVO is commonly marketed as renewable diesel in the United States and is increasingly used in heavy-duty transportation, commercial fleets, marine applications, generators, and industrial equipment. The country had 19 renewable diesel and related biofuel plants with combined production capacity of 4.719 billion gallons annually as of January 2025. California represents an important demand center because its low-carbon fuel policies encourage fuels with lower lifecycle emissions. Domestic feedstock availability, refinery infrastructure, and fleet demand continue to strengthen the United States HVO market.

Key Findings

• By Type: Ecofining technology leads with 56% market share, while co-processing technology represents the fastest-growing segment at 11.9% CAGR globally.
• By Application: Vehicle applications dominate with 68% market share, supported by increasing renewable diesel adoption across commercial transportation and heavy-duty fleets.
• By Geography: Europe leads with 38.1% market share, while Asia represents the fastest-growing region at 15.1% CAGR during the forecast period.

Hydrotreated Vegetable Oil (HVO) Market Latest Trends

The hydrotreated vegetable oil market is increasingly defined by feedstock diversification, refinery conversion, renewable diesel capacity expansion, and greater use of waste-derived raw materials. Producers are reducing dependence on conventional vegetable oils by increasing the use of used cooking oil, animal fats, tall oil, and residues from food and agricultural processing. This shift supports lifecycle emissions reduction and helps producers comply with sustainability requirements. Neste reported that approximately 95% of its global renewable raw material inputs were waste and residues in 2025. The development demonstrates the market's movement toward circular feedstock models and improved resource efficiency.

Another major trend is the integration of HVO production into existing petroleum refineries. Refinery conversion can provide access to established hydrogen systems, storage infrastructure, utilities, logistics networks, and fuel distribution channels. Companies are also building dedicated renewable fuel units where demand and feedstock availability justify new capacity. Neste's renewable product production capacity is approximately 5.5 million tons annually, with the Rotterdam expansion expected to increase total renewable product capacity to 6.8 million tons annually after completion. HVO is also gaining traction outside road transport, particularly in aviation through renewable jet fuel pathways, marine fuels, construction equipment, backup generators, and industrial machinery.

Hydrotreated Vegetable Oil (HVO) Market Dynamics

DRIVER

"Rising demand for low-carbon drop-in diesel alternatives"

The principal driver of the HVO market is increasing demand for renewable fuels that can reduce lifecycle greenhouse gas emissions without requiring major modifications to existing diesel infrastructure. Unlike many alternative fuels that require dedicated vehicles, HVO can be used in approved diesel engines and distributed through conventional fuel logistics. This characteristic makes HVO particularly attractive to trucking companies, construction fleets, agricultural machinery operators, municipalities, marine operators, and industrial users. Renewable diesel production capacity in the United States reached 4.719 billion gallons annually across 19 plants in January 2025, demonstrating substantial infrastructure supporting the market. Regulatory incentives, corporate decarbonization commitments, and fleet sustainability targets are reinforcing demand.

HVO also benefits from compatibility with existing storage and transportation systems. Fleet operators can transition toward renewable diesel without replacing large numbers of vehicles, provided engine manufacturers approve the fuel specification. The ability to blend or use HVO as a high-renewable-content diesel alternative expands its addressable market. Demand is especially strong in applications where electrification is difficult because of high energy requirements, long operating hours, remote operations, or payload constraints. Heavy trucks, mining equipment, construction machinery, agricultural vehicles, ships, and backup generators therefore represent important growth areas. Continued government support for renewable fuels and carbon reduction is expected to maintain strong market momentum.

RESTRAINT

"Limited availability and rising competition for sustainable feedstocks"

Feedstock availability is a significant restraint because HVO production depends on renewable oils, fats, and residues that are also demanded by biodiesel, sustainable aviation fuel, oleochemical, animal feed, and other industries. Used cooking oil and animal fats have become particularly valuable because they can provide attractive lifecycle carbon performance while supporting waste valorization. As more renewable fuel plants compete for the same materials, procurement costs and supply security become increasingly important. Neste reported that waste and residue inputs represented 95% of its renewable raw materials in 2025, illustrating the industry's heavy dependence on these resources.

Feedstock markets can also be affected by weather, agricultural production, food demand, export policies, collection infrastructure, and sustainability certification. Some regions have limited systems for collecting used cooking oil and other residues, reducing the quantity available for commercial-scale processing. Producers therefore need diversified sourcing networks and long-term supply agreements. Competition from sustainable aviation fuel adds another challenge because the same renewable feedstocks can be processed into aviation fuel. This creates strategic competition between road transport and aviation applications and can influence product economics, refinery utilization, and feedstock allocation decisions.

OPPORTUNITY

"Expansion of renewable diesel capacity and waste-based feedstock processing"

Investment in new HVO facilities and refinery conversions represents a major opportunity for market participants. Producers can use existing petroleum infrastructure as a foundation for renewable fuel production, reducing certain construction requirements while maintaining access to established logistics networks. New dedicated facilities can also be designed around optimized feedstock pretreatment, hydrogen integration, renewable power, and flexible product output. Neste currently operates renewable fuel production on three continents and has annual renewable product capacity of approximately 5.5 million tons. Its Rotterdam expansion is planned to increase capacity to 6.8 million tons annually after completion.

Additional opportunities are emerging from the development of local feedstock collection networks. Used cooking oil aggregation, animal-fat processing, agricultural residue conversion, and forestry-based residue utilization can create vertically integrated supply chains. Companies can also invest in pretreatment technologies capable of handling lower-quality or more diverse feedstocks. Digital feedstock traceability provides another opportunity because regulators and customers increasingly require evidence that renewable materials meet sustainability criteria. HVO producers with diversified feedstock portfolios, flexible processing technology, and established distribution networks are well positioned to capture demand across transportation, aviation, marine, and industrial markets.

CHALLENGE

"Regulatory uncertainty and feedstock sustainability requirements"

Regulatory uncertainty remains a major challenge because HVO economics and demand are strongly influenced by renewable fuel mandates, tax credits, carbon-intensity programs, sustainability criteria, and fuel standards. Policy changes can affect the value of environmental attributes and influence whether producers prioritize road fuels or sustainable aviation fuel. The United States experienced regulatory uncertainty during 2025 as market participants assessed changes to clean fuel production incentives and renewable fuel obligations. European producers similarly monitor implementation of renewable energy requirements that influence demand for waste-based fuels.

Sustainability certification adds another layer of complexity. Producers must demonstrate feedstock origin, traceability, greenhouse gas performance, and compliance with applicable sustainability criteria. Increased scrutiny of indirect land-use impacts and questionable feedstock sourcing can affect market acceptance. Companies therefore need sophisticated procurement, certification, auditing, and supply-chain management systems. Another challenge is hydrogen availability because hydrotreatment requires hydrogen to remove oxygen and convert renewable oils into high-quality hydrocarbons. Producers are increasingly exploring low-carbon hydrogen sources to further reduce lifecycle emissions associated with HVO production.

Hydrotreated Vegetable Oil (HVO) Market Segmentation

The HVO market can be segmented by production technology and application. Ecofining technology is widely deployed because it efficiently converts renewable oils and fats into paraffinic renewable diesel. Co-processing technology uses existing refinery infrastructure to process renewable feedstocks alongside petroleum streams. Other technologies include proprietary hydrotreatment processes and emerging integrated pathways. By application, vehicles represent the largest demand category because HVO provides a practical diesel replacement for approved engines. Generators, industrial power systems, marine equipment, construction machinery, and other applications are also gaining attention as organizations pursue lower-carbon fuel alternatives without immediate equipment replacement.

By Type

Based on Type the global market can be categorized in to “Based on Ecofining Technology, Based on Co-Processing Technology, Other”.

• Based on Ecofining Technology: Ecofining technology accounts for an estimated 56% share of HVO production technology because it has been deployed extensively for dedicated renewable diesel manufacturing. The process uses hydrogen to remove oxygen from renewable oils and fats, producing hydrocarbons with properties similar to conventional diesel. Ecofining systems can process multiple renewable feedstocks following appropriate pretreatment, providing producers with greater feedstock flexibility. The technology is particularly attractive for large-scale renewable fuel facilities designed to maximize conversion efficiency and product quality. Dedicated Ecofining facilities can also produce renewable diesel suitable for road transportation and other applications while integrating hydrogen, heat recovery, storage, and fuel finishing systems into one production platform.

• Based on Co-Processing Technology: Co-processing technology represents an estimated 29% share of the HVO production technology segment and offers refiners an efficient pathway for introducing renewable feedstocks into existing petroleum infrastructure. Renewable oils can be processed with conventional refinery streams in selected units, depending on equipment configuration, feedstock quality, product specifications, and regulatory requirements. Co-processing reduces the need for completely new refinery infrastructure and can allow companies to use existing hydrogen, utilities, storage, and distribution systems. The approach is particularly attractive to established petroleum companies transitioning toward renewable fuels. However, co-processing requires careful feedstock pretreatment, process optimization, mass-balance accounting, and regulatory certification.

• Other: Other technologies account for an estimated 15% share and include proprietary hydrotreatment configurations, advanced feedstock pretreatment, integrated renewable fuel platforms, and emerging processes designed to improve feedstock flexibility. These technologies are important because future HVO production is expected to rely on increasingly diverse waste and residue materials. Advanced pretreatment can remove contaminants, metals, phosphorus, and other compounds that may affect catalysts or plant performance. Producers are also developing systems capable of integrating renewable hydrogen, improved heat recovery, and flexible product routing. The segment provides opportunities for technology companies developing solutions that increase conversion efficiency and enable lower-quality renewable feedstocks to become commercially useful.

By Application

Based on Application the global market can be categorized in to “Vehicle, Generator, Industrial Power System, Other”.

• Vehicle: Vehicle applications represent an estimated 68% share of the HVO market because renewable diesel provides a direct pathway for reducing emissions from existing diesel-powered transportation. Heavy-duty trucks, buses, delivery fleets, agricultural machinery, construction vehicles, municipal vehicles, and passenger cars can use HVO where manufacturers approve the fuel. The segment benefits from the difficulty of electrifying high-mileage and high-load vehicles in certain operating environments. HVO can be transported through established fuel logistics and used without requiring dedicated fueling infrastructure in many applications. Fleet operators are increasingly evaluating HVO as part of broader decarbonization strategies, especially where immediate fleet replacement is impractical.

• Generator: Generator applications account for an estimated 11% share of the HVO market and include backup power systems, temporary power equipment, telecommunications infrastructure, construction sites, hospitals, data centers, and remote facilities. Diesel generators are widely used where reliable electricity is essential, but organizations are increasingly seeking lower-carbon alternatives. HVO can provide a renewable replacement for conventional diesel in compatible generator engines without requiring major equipment modifications. Demand is particularly relevant for companies with corporate emissions targets and facilities operating in jurisdictions with renewable fuel incentives. Fuel storage stability, supplier availability, engine certification, and local regulations remain important purchasing considerations.

• Industrial Power System: Industrial power systems represent approximately 13% of the HVO application market and include manufacturing facilities, mining operations, processing plants, agricultural installations, and distributed energy systems. These users often operate diesel-powered equipment for extended periods and therefore have significant fuel consumption. HVO provides a pathway to reduce lifecycle emissions while retaining existing engines and fuel systems. Mining and construction companies are particularly interested because heavy equipment can be difficult to electrify due to operating conditions, mobility requirements, and power demand. Industrial users are also evaluating HVO for emergency power, mobile equipment, and hybrid energy systems where renewable electricity alone cannot provide sufficient reliability.

• Other: Other applications account for approximately 8% of the HVO market and include marine vessels, heating systems, rail equipment, agricultural machinery, and specialized mobile power equipment. Marine use is gaining attention because shipping operators are seeking practical alternatives for reducing fuel-related emissions while maintaining existing propulsion systems. HVO can also support temporary power and off-grid applications where electrification is difficult. Demand in this segment is influenced by fuel certification, engine manufacturer approvals, availability of sustainable feedstocks, and local carbon-reduction policies. The broad compatibility of HVO provides opportunities across specialized applications that require high-energy-density liquid fuels.

Hydrotreated Vegetable Oil (HVO) Market Regional Outlook

• North America

North America represents an estimated 42% share of the global HVO market and maintains the largest regional position because of substantial renewable diesel infrastructure in the United States. The United States had 19 renewable diesel and related biofuel plants with total production capacity of approximately 4.719 billion gallons annually as of January 2025. California had five facilities with combined capacity of approximately 1.684 billion gallons annually, making it a particularly important production and consumption center.

The regional market is strongly influenced by federal clean-fuel incentives, renewable fuel obligations, and state-level low-carbon fuel policies. California's low-carbon fuel market encourages fuels with lower lifecycle emissions and provides a strong demand signal for renewable diesel. North American producers are also developing integrated feedstock networks using used cooking oil, animal fats, agricultural residues, and other renewable materials. The region's large trucking, logistics, construction, agricultural, and mining industries provide a substantial addressable market. Renewable diesel is particularly attractive for heavy-duty fleets because HVO can provide lower-carbon fuel without requiring immediate vehicle replacement.

• Europe

Europe holds an estimated 38% share of the global HVO market and remains a major demand center because renewable transport policies encourage the replacement of fossil diesel with lower-carbon fuels. Germany, Italy, Spain, the Netherlands, Sweden, Finland, and other markets have developed strong renewable diesel ecosystems. European demand is supported by commercial fleets, trucking companies, municipal transport, marine applications, and industrial users seeking immediate emissions reductions.

European HVO production is increasingly based on waste and residue feedstocks, while refinery conversions and dedicated renewable fuel facilities are expanding. Neste reported that 72% of its renewable diesel and sustainable aviation fuel sales volumes were directed to Europe in 2025, compared with 28% to North America. European market conditions also tightened during the second half of 2025 as regulatory implementation strengthened demand.

• Asia

Asia accounts for an estimated 12% share of the global HVO market and represents an emerging production and consumption region. Japan, Singapore, China, South Korea, Malaysia, and Indonesia are important markets because of their refining infrastructure, large transportation sectors, and access to renewable oils and residues. Singapore has become particularly significant as a renewable fuel production and trading center because of its strategic position in global fuel logistics and access to Asian feedstock markets.

Asian producers benefit from proximity to palm-oil processing, used cooking oil collection networks, animal fats, and other renewable materials. However, sustainability concerns surrounding certain feedstocks are encouraging producers to prioritize waste and residue inputs. The region is also becoming increasingly important for sustainable aviation fuel production, which competes with HVO for renewable feedstocks and processing capacity. Asian governments are developing renewable fuel policies that can strengthen demand for low-carbon diesel alternatives.

• Middle East & Africa

The Middle East and Africa account for an estimated 4% share of the global HVO market. Market development is influenced by transportation demand, refinery modernization, renewable energy strategies, and interest in reducing carbon intensity in sectors that remain dependent on liquid fuels. Gulf countries have advanced refining infrastructure that can potentially support renewable feedstock processing, while several African markets have significant agricultural and waste-resource potential.

Feedstock availability is an important regional opportunity. Used cooking oil, animal fats, agricultural residues, and vegetable-oil processing waste can provide raw materials for renewable fuel production when appropriate collection and certification systems are established. The region can also benefit from its strategic position between Europe, Asia, and Africa, supporting renewable fuel exports where infrastructure and policy conditions are favorable.

• Rest of the World

The rest of the world represents an estimated 4% share of the global HVO market and includes Latin America, Oceania, and other emerging renewable fuel markets. Brazil is particularly important because of its large agricultural sector, extensive biofuel infrastructure, and growing interest in advanced renewable diesel. The country's agricultural resources provide potential feedstocks for renewable fuel production, although sustainability certification and competition with existing biofuel pathways remain important considerations.

Australia is another emerging market because of its large transportation distances, mining industry, agricultural equipment demand, and interest in lower-carbon fuels. HVO can provide a practical option for mining trucks, agricultural machinery, construction equipment, and backup generators where battery electrification may be difficult. Latin American countries can also develop HVO production using used cooking oil, animal fats, and agricultural residues.

KEY INDUSTRY PLAYERS

The HVO market includes established renewable fuel producers, petroleum companies converting refineries, technology providers, feedstock specialists, and emerging renewable energy developers. Neste maintains a leading global position through large-scale renewable diesel and sustainable aviation fuel production, while Diamond Green Diesel operates major renewable diesel infrastructure in the United States. UPM Biofuels differentiates itself through wood-based feedstocks, while Eni, Repsol, TotalEnergies, Preem, Cepsa, BP, and World Energy are expanding renewable fuel capabilities. Technology companies including Axens and NextChem support production projects through process technologies and engineering capabilities. Competition increasingly centers on feedstock security, carbon intensity, refinery integration, production scale, logistics, and long-term customer agreements.

List of Top Hydrotreated Vegetable Oil (HVO) Companies

• Neste
• Diamond Green Diesel
• UPM Biofuels
• Renewable Energy Group
• Eni
• World Energy
• TotalEnergies
• Preem
• Repsol
• Cepsa
• NextChem (Maire Tecnimont)
• Axens
• BP
• Certas Energy

List of Top 2 Companies Market Share

• Neste: Estimated 19.4% share, supported by renewable fuel production capacity across Europe, Asia, and North America.
• Diamond Green Diesel: Estimated 13.8% share, supported by large-scale United States renewable diesel production infrastructure.

Investment Analysis and Opportunities

Investment opportunities in the HVO market are concentrated in refinery conversions, dedicated renewable fuel plants, feedstock collection networks, hydrogen integration, pretreatment systems, and renewable fuel distribution. Neste's Rotterdam expansion is expected to increase the company's renewable product capacity to 6.8 million tons annually after completion, demonstrating the scale of investment occurring in the sector.  New projects are also targeting waste-based feedstocks to improve lifecycle carbon performance. Investors can pursue opportunities across renewable diesel, sustainable aviation fuel, renewable marine fuel, and industrial applications. Feedstock aggregation and traceability systems provide additional opportunities as sustainability requirements become increasingly important.

New Product Development

New product development in the HVO market is focused on higher-quality renewable diesel, improved cold-weather performance, broader feedstock flexibility, lower carbon intensity, and optimized fuel formulations. Producers are increasingly developing fuels from waste and residue feedstocks, including used cooking oil and animal fats. Neste's renewable diesel uses its proprietary NEXBTL technology to convert diverse renewable raw materials into hydrocarbons suitable for diesel applications. Repsol and Bunge announced development of intermediate crops such as camelina and safflower as lower-carbon feedstocks for renewable diesel and sustainable aviation fuel. These developments demonstrate the industry's effort to expand sustainable feedstock availability while maintaining fuel quality and compatibility.

Hydrotreated Vegetable Oil (HVO) Five Recent Developments (2025–2026)

• February 2025 — OMV Petrom Construction begins on major renewable diesel and sustainable aviation fuel production facility.

  OMV Petrom started construction at Petrobrazi, integrating HVO, sustainable aviation fuel, and green hydrogen facilities to establish Southeast Europe's first major sustainable-fuels production hub.

• April 2025 — Repsol Partnership expands innovative crop feedstocks for lower-carbon renewable diesel production.

  Repsol and Bunge agreed to process camelina and safflower into low-carbon oils, expanding sustainable feedstock options for HVO and aviation fuel production.

• March 2026 — Neste Green financing supports Rotterdam renewable fuels capacity expansion and future SAF flexibility.

  Neste allocated green financing toward Rotterdam expansion, supporting increased renewable product capacity and additional sustainable aviation fuel production flexibility through refinery modernization.

• May 2026 — Repsol Puertollano begins large-scale production of fully renewable fuels for multiple transport applications.

  Repsol started production at Puertollano, adding renewable diesel capacity for cars, trucks, and ships while reducing lifecycle emissions through renewable feedstocks.

• 2025 — Neste Renewable fuel production increases while waste-based feedstocks strengthen circular sourcing strategy.

  Neste produced 3.313 million tons of renewable diesel during 2025, increasing production while maintaining a strong focus on waste and residue feedstocks. 

Hydrotreated Vegetable Oil (HVO) Market Report Coverage

The HVO market report covers production technologies, renewable feedstocks, applications, regional markets, competitive positioning, investment opportunities, and product development. The study examines Ecofining technology, co-processing technology, and other hydrotreatment pathways across vehicles, generators, industrial power systems, and specialized applications. Regional analysis covers North America, Europe, Asia, the Middle East and Africa, and the rest of the world. The report evaluates market drivers, restraints, opportunities, challenges, feedstock availability, refinery conversions, sustainability requirements, and emerging renewable fuel technologies. North America represents an estimated 42% market share, while Europe accounts for approximately 38%, reflecting the concentration of renewable diesel production and consumption infrastructure in these regions.