Biodiesel is biodegradable, clean, and non-toxic gas and is widely seen as an alternative to conventional fossil fuel sources. Biodiesels are free of sulfur compounds and aromatics that are known to cause air pollution. When compared to petroleum and diesel fuel, biodiesel combustion produces very few air pollutants such as hydrocarbons, sulfur dioxide, particulates, carbon monoxide, and air toxic particulates. The major benefit of biodiesel fuel is its carbon-neutral nature. Biodiesel does not produce net output in the form of CO2 or carbon dioxide gas when the combustion takes place owing to which biodiesel is seen as an effective alternative for fossil fuel-based energy sources such as coal. Vegetable oil crops absorb a large amount of carbon dioxide as they grow owing to which they can curb greenhouse emissions up to a large extent. Soybean and palm oil trees as some of the main sources that absorb carbon dioxide.

By region, Europe is the largest consumer of biodiesel owing to stringent environmental regulations. However, other regions such as North America and the Asia Pacific are also getting inclined towards increasing the adoption of biodiesel. For instance, according to US EPA, the US consumption for biodiesel in 2015 was about 2 billion gallons which considerably reduced the carbon emission. On the other hand, in 2018, Union Cabinet approved the latest edition on National Policy on Biofuels, which aims to achieve 20% blending of biofuels with fossil-based fuels by 2030 thereby diversifying the energy mix.

Based on feedstock, the global biodiesel market is categorized into vegetable oil and animal fats. The vegetable oil segment is further categorized into soybean oil, canola oil, and other edible oils whereas the animal fats segment is sub-divided into poultry, white grease, tallow, and others.

By feedstock, vegetable oils dominated the biodiesel market with more than 75% market share in 2020. The presence of a large number of manufacturers and awareness regarding production technology and yields has led to increased production as well as consumption of vegetable oils. Soyabean oil, corn oil, and canola oils are widely produced and used for producing vegetable oils. However, the availability of crops is varied with each region thereby affecting the demand.

Based on the application, the global biodiesel market is segmented fuel, power generation, and others. The fuel application segment is further categorized into automotive, marines, and other segments. By application, the fuel segment dominated the market and is projected to further maintain its dominance during the forecast period. Biodiesels are increasingly replacing fossil fuels in the commercial vehicles segment is seen as a key driver for the market. Furthermore, growing support from governments and environmental associations for biodiesels in order to reduce the greenhouse emissions is projected to propel the market growth.

On the basis of region, the global biodiesel market is categorized into key geographical regions such as Europe, North America, Asia Pacific, Latin America, and Middle East & Africa. Furthermore, the global biodiesel market is also studied for key countries such as the UK, US, China, Germany, India among others. By region, Europe dominated the global biodiesel market with more than 38% market share in 2020. Owing to stringent environmental regulations for greenhouse gas emissions, the product has been adopted at an early stage as compared with other regions. The demand for biodiesel in the region is now expected to grow at a stable pace in the near future. However, Asia Pacific is projected to witness the fastest growth in demand in the coming years owing to rapid growth in the automotive industry in the region. North America and the Middle East are also projected to witness positive growth in the biodiesel market in the coming years.

In terms of market competitiveness, the global biodiesel market is a fragmented market with a large number of suppliers and mid & small scale producers. Forming supply chain partnerships and collaborations is one of the key strategies adopted by the players in order to expand their distribution presence as well as increase their customer base. Key players operating in the global biodiesel market are Archer Daniels Midland Company (ADM), Bunge Limited, Neste Corporation, Wilmar International Limited, Cargill Inc., Renewable Energy Group Inc., Biox Corporation, Louis Dreyfus Company, Terravia Holdings Inc., Münzer Bioindustrie GmbH among others.