Hydrotreated Vegetable Oil Market - Global Forecast 2026-2032

The Hydrotreated Vegetable Oil Market size was estimated at USD 26.10 billion in 2025 and expected to reach USD 27.57 billion in 2026, at a CAGR of 6.76% to reach USD 41.27 billion by 2032.

Hydrotreated vegetable oil (HVO) emerges as a transformative renewable diesel, leveraging hydrotreatment and isomerization to convert a diverse range of lipid-based feedstocks into a paraffinic fuel that seamlessly integrates with existing diesel engines and infrastructure. Unlike conventional biodiesels, which rely on fatty acid methyl esters and face blending limitations, HVO matches the chemical composition of fossil diesel, enabling unlimited blending ratios under EN 590 standards and eliminating the need for engine modifications. Its high cetane number, negligible aromatics, and stable cold flow properties position HVO as an optimal drop-in solution for decarbonizing heavy-duty transport and stationary power applications. Early commercial HVO units, dating back to 2010 in the United States, demonstrated the viability of hydrotreating vegetable oils and rendered fats at scale, laying the foundation for subsequent capacity expansions and refinery conversions worldwide. This introduction underscores HVO’s strategic importance in achieving mid-term greenhouse gas targets and facilitating a resilient transition away from petroleum-derived diesel by harnessing established process technology and existing logistics chains

Technological breakthroughs in hydrotreating catalysts and reactor designs have significantly enhanced HVO production efficiencies, enabling refineries to retrofit existing hydroskimming units and co-process vegetable oils alongside fossil feedstocks. This co-processing capability reduces capital expenditure and accelerates project timelines, while proprietary isomerization steps ensure cold flow performance meets or exceeds diesel specifications. Simultaneously, policy frameworks such as the U.S. Inflation Reduction Act, which allocates approximately $9.4 billion in biofuel tax credits for low-carbon intensity fuels, and the European Union’s Recast Renewable Energy Directive (RED II) have created powerful incentives for HVO deployment and secured long-term feedstock off-take agreements. In advanced economies, low-carbon fuel standards and renewable fuel obligations are driving HVO’s share in diesel pools, fostering investment by major refiners and integrated energy players. Together, these technological and policy shifts are reshaping the competitive landscape by lowering production costs, diversifying feedstock portfolios, and aligning supply chains with stringent sustainability criteria, ultimately positioning HVO as a pivotal pillar in global decarbonization strategies

Throughout 2025, evolving U.S. tariff measures have cumulatively altered the cost structure of HVO feedstocks and import dynamics. The implementation of broad-spectrum duties averaging 10 percent on global biodiesel inputs, combined with targeted surcharges of up to 54 percent on specific countries’ exports, has diminished the competitiveness of imported used cooking oil and animal-derived fats. This protectionist stance, announced under a national economic emergency declaration, aims to shield domestic crushing and renewable diesel facilities but introduces feedstock shortages and price volatility for producers reliant on global supply. Concurrently, the Energy Information Administration forecasts that the transition from a per-gallon blender’s credit to the carbon-intensity-based Section 45Z tax credit will disadvantage imported renewable diesel volumes, leading to a sharp decline in biodiesel and HVO net imports. Trade investigations launched by Canada’s CBSA and the U.K.’s Trade Remedies Authority into alleged dumping and subsidies further heighten uncertainty, potentially triggering provisional duties on U.S. renewables abroad. These intertwined tariff and subsidy shifts underscore the need for adaptive sourcing strategies, as industry players grapple with reconfiguring supply chains and optimizing domestic feedstock streams to mitigate the impact of evolving trade barriers

In application segmentation, commercial and private aviation operators increasingly embrace HVO for its performance parity with jet-grade paraffinic kerosene, while narrow-body and wide-body fleets deploy renewable blends to meet voluntary carbon reduction commitments. Business jets and turboprop services leverage neat HVO for enhanced reliability in remote routes, capitalizing on its cold flow advantages. Maritime users of HVO span bulk carriers using high-blend diesel alternatives and yachting vessels seeking ultra-low sulfur fuels; motorboats and recreational craft particularly value HVO’s zero-aromatic profile and emission benefits. In power generation, stationary plants and backup generators in both residential settings and critical infrastructure depend on HVO blends to secure energy resilience and meet portfolio sustainability targets. Rail corridors utilize intercity freight and long-haul passenger trains running high-blend HVO to reduce lifecycle emissions, whereas urban commuter services integrate lower-blend turbines to comply with local air quality standards. Road transport relies on heavy-duty commercial fleets for long-distance haulage, applying B70 and B90 blends to fulfill decarbonization mandates, while light commercial and passenger vehicles adopt lower ratios such as B10 and B20 to navigate regulatory frameworks without operational disruptions. Across feedstocks, animal fats, used cooking oil, and vegetable oils-particularly palm, rapeseed, and soybean-provide versatile inputs, with refiners optimizing yield, carbon scoring, and supply reliability. Blend type insights reveal that neat HVO commands a premium for sectors prioritizing maximum emissions reduction, whereas above-50 blends strike a balance between cost efficiency and regulatory compliance. Distribution channels fluctuate between direct OEM partnerships securing dedicated contracts and vast retailer networks supplied via national and regional distributors, highlighting the strategic interplay of vertical integration, service reach, and inventory management in delivering tailored HVO solutions to end-markets

In the Americas, the United States leads with significant expansions in renewable diesel capacity driven by supportive federal incentives and state-level low-carbon fuel standards. Canada mirrors this growth through policy alignment with the U.S. and recent investigations into import practices that protect domestic producers, enhancing local feedstock development and refining capabilities. Mexico’s emerging biofuels regulations are fostering consortiums to explore HVO for power stability and heavy-duty transport corridors. Across Europe, the Middle East, and Africa, the EU’s RED II targets and regional carbon markets are propelling HVO uptake, particularly in Germany, France, and the Nordics, where advanced biofuel mandates surpass the 14.5 percent reduction threshold. The United Kingdom’s post-Brexit trade regime and investigations into U.S. HVO imports reflect a strategic recalibration of domestic energy security and industrial decarbonization. Meanwhile, Gulf Cooperation Council states are initiating pilot HVO projects for maritime bunkering and stationary power to diversify hydrocarbon economies. In the Asia-Pacific, rapid growth centers on Southeast Asian palm oil feedstocks and China’s five-year plan endorsements for low-carbon fuels, complemented by Japan’s demonstration programs for heavy-duty HVO blends and Australia’s state-driven trials in remote mining and agricultural sectors. These regional trajectories underscore the diverse policy frameworks and strategic partnerships catalyzing HVO’s global diffusion, highlighting the importance of tailored approaches to regulatory compliance, feedstock sourcing, and infrastructure adaptation

Key players in the HVO arena are pursuing both greenfield projects and collaborative ventures to secure leadership across feedstock, technology, and distribution. Neste consolidates its position with a multi-billion-dollar Rotterdam expansion and strategic offtakes, while the Marathon-Neste joint venture in California exemplifies cross-border investments under the U.S. low-carbon fuel standard. Renewable Energy Group-now operating under Chevron-leverages historical refinery assets and regional feedstock networks to optimize co-processing yields. TotalEnergies and Preem integrate proprietary hydrotreating technologies to repurpose existing hydrocracking units in Europe, aligning with RED II sustainability criteria. Diamond Green Diesel’s capacity ramp-up in Louisiana demonstrates the scalability of U.S. projects benefiting from favorable tax incentives, while BP’s partnership with DGD emphasizes delivery synergies to major fleet operators. Shell’s foray into HVO through terminal upgrades and direct sales contracts ensures feedstock traceability and logistics resilience. ENI and Bharat Petroleum explore joint HVO initiatives in India to meet aggressive national biofuel blending targets, supported by long-term offtake agreements. Across Asia-Pacific, regional refiners form consortia with technology licensors to pilot feedstock diversification, while distributors expand national and regional channels to streamline supply to end users. The confluence of these strategic maneuvers illustrates a sector-wide shift toward integrated value chains, risk-mitigated supply contracts, and technology partnerships to navigate volatile feedstock markets and evolving policy landscapes

To navigate the complex interplay of technology, policy, and trade in the HVO landscape, industry leaders should prioritize feedstock portfolio diversification by incorporating higher-resilience sources such as municipal waste oils and advanced non-food lipids. Strengthening partnerships with agricultural cooperatives and waste management firms can secure stable input streams and improve carbon-intensity scores. Embracing modular hydrotreating units and co-processing models reduces capital risk and accelerates deployment timelines, enabling incremental capacity additions aligned with policy milestones. Engaging proactively with regulatory bodies to shape evolving sustainability frameworks, particularly around ILUC risk and carbon accounting methodologies, will ensure compliance and unlock financial incentives. Companies should also invest in digital solutions to enhance fuel traceability from farm to fleet, leveraging blockchain and IoT monitoring to substantiate low-carbon credentials and mitigate supply chain disruptions. Finally, aligning commercial offering with bespoke distribution strategies-from OEM contracts for direct fleet supply to strategic alliances with national and regional distributors-will maximize market reach and customer retention, allowing stakeholders to capitalize on the full spectrum of HVO applications and regulatory support mechanisms

This research integrates primary qualitative insights from in-depth interviews with C-suite executives, technology licensors, refinery engineers, and policy advisors across North America, Europe, and Asia-Pacific. Secondary data sources encompass peer-reviewed journals, government publications, and bespoke datasets from the International Energy Agency, U.S. Energy Information Administration, and European Commission archives. Policy and tariff analyses draw upon official communications from the U.S. Treasury, Canada Border Services Agency, and the U.K. Trade Remedies Authority. Market trend validation involved cross referencing Argus Media commodity assessments and S&P Global trade intelligence to ensure consistency with real-time price and volume indicators. Processes for data triangulation include correlating feedstock flows with customs records, reconciling production capacity build-outs with environmental permitting logs, and juxtaposing policy timelines with announced tax credit modifications. Methodological rigor is maintained through iterative expert reviews, statistical checks on supply-demand correlations, and scenario stress-testing to address potential regulatory or trade policy shifts

The hydrotreated vegetable oil industry stands at a pivotal juncture, driven by technological maturity in hydrotreating processes, robust policy incentives, and evolving trade landscapes. Stakeholders who harness feedstock diversification, modular capacity expansion, and digital traceability will emerge as frontrunners in a market defined by stringent sustainability criteria and competitive trade dynamics. While U.S. and European directives continue to favor domestic production, emerging economies in Asia-Pacific are equally poised to accelerate HVO adoption through targeted pilot programs and national blending mandates. Strategic collaborations among refiners, feedstock suppliers, and policy makers will be instrumental in navigating tariff uncertainties and maximizing incentive structures. By embracing integrated value chain approaches, companies can optimize cost efficiencies, mitigate supply risks, and deliver high-value decarbonization solutions across diverse end-use sectors. This synthesis of insights underscores the critical path forward for decision makers aiming to capitalize on HVO’s role in the global transition to low-carbon liquid fuels

To gain unparalleled access to comprehensive market intelligence on hydrotreated vegetable oil, reach out to Ketan Rohom, Associate Director of Sales & Marketing at 360iResearch. Ketan combines deep industry knowledge with a consultative approach to help stakeholders navigate complex market dynamics and capitalize on new opportunities. Engaging with Ketan ensures you receive tailored insights, roundtables, and dedicated support to align strategic objectives with the latest trends in applications, feedstock innovations, and policy developments. Whether you represent an OEM looking to integrate advanced low-carbon fuels or an investor seeking high-growth ventures in renewable diesel, Ketan will guide you through our full report’s findings and methodologies to facilitate data-driven decision making. Don’t miss this chance to secure a competitive edge in the rapidly evolving hydrotreated vegetable oil ecosystem-connect with Ketan Rohom today to unlock the complete market research report and embark on a path to sustainable growth.