Global Hydrotreated Vegetable Oil Market Size, Share, Trends & Growth Analysis Report Segmented By Feedstock (Palm Oil, Soybean Oil, Rapeseed Oil, Sunflower Oil, Others), Application, End-User And Regions (North America, Europe, Asia-Pacific, Latin America, Middle East and Africa), 2026-2034

Hydrotreated Vegetable Oil Market Size Overview

The Hydrotreated Vegetable Oil Market size was valued at USD 11.47 Billion in 2025 and is projected to grow from USD 12.97 Billion in 2026 to USD 34.67 Billion by 2034, at a CAGR of 13.08% during the forecast period.

The Hydrotreated Vegetable Oil (HVO) market pertains to the production and utilization of HVO, a renewable biofuel derived from vegetable oils through the process of hydrotreatment. This process involves the treatment of vegetable oils with hydrogen, effectively converting triglycerides into a high-quality fuel. HVO is used primarily as an alternative to fossil fuels in transportation, industrial applications, and power generation. Its key advantage lies in its chemical similarity to petroleum diesel, making it compatible with existing infrastructure and engine technologies without the need for significant modifications. HVO is considered an environmentally sustainable alternative due to its reduced carbon emissions and its ability to be produced from various feedstocks such as palm oil, soybean oil, and waste cooking oil.

The hydrotreated vegetable oil market is experiencing significant growth, driven by increasing global demand for sustainable and clean energy solutions. Governments worldwide are implementing stringent regulations to curb greenhouse gas emissions, with policies encouraging the use of renewable fuels, including HVO. According to the European Commission, HVO is recognized as a crucial element in achieving the EU’s renewable energy targets. Additionally, the rising demand for environmentally friendly transportation fuels presents ample opportunities for HVO producers, as its use in the automotive industry is becoming more prevalent. Furthermore, technological advancements in HVO production processes are improving yield and reducing costs, making it a more economically viable option for large-scale production.

Market Dynamics

Hydrotreated Vegetable Oil Market Drivers

• Government Regulations and Policies: The increasing stringency of government regulations aimed at reducing carbon emissions is a key driver for the Hydrotreated Vegetable Oil (HVO) market. Governments are incentivizing the use of renewable biofuels like HVO through subsidies, tax exemptions, and regulatory mandates. For instance, the European Union has set a target to reduce greenhouse gas emissions by 55% by 2030 compared to 1990 levels, with biofuels such as HVO playing a significant role in this goal. According to the European Commission, HVO is a critical component in meeting the EU Renewable Energy Directive’s targets.
• Rising Demand for Sustainable Fuels: As the global emphasis on sustainability intensifies, demand for clean and renewable fuel alternatives like Hydrotreated Vegetable Oil has surged. The shift towards greener alternatives is supported by rising consumer awareness and regulatory mandates for reduced emissions in transportation and industrial sectors. According to the International Energy Agency (IEA), renewable fuels, including HVO, have the potential to significantly lower transportation sector emissions. In 2020, HVO production accounted for nearly 25% of Europe’s total biofuels output, highlighting its growing importance in the energy mix.
• Advancements in HVO Production Technology: Technological innovations in the production of HVO are significantly improving efficiency and cost-effectiveness. Advancements in hydrotreatment technology have led to higher yields and better fuel quality, which in turn lowers production costs and enhances the commercial viability of HVO. As per the U.S. Department of Energy, these advancements have allowed producers to convert various feedstocks, such as waste oils, into HVO, expanding the supply base and reducing dependence on conventional vegetable oils. This technological progress is key to meeting increasing market demand and reducing fuel production costs.
• Increasing Global Transportation Sector Shift to Low Carbon Fuels: The transportation sector’s gradual transition to low-carbon fuels is a significant driver of HVO adoption. As the largest global emitter of carbon dioxide, the transportation industry is under pressure to decarbonize, with biofuels like HVO emerging as a practical solution. According to the U.S. Environmental Protection Agency (EPA), biofuels including HVO are expected to account for 30% of the global transportation fuel mix by 2040, driven by their ability to be used in existing infrastructure without engine modifications, making them a convenient low-carbon alternative.

Hydrotreated Vegetable Oil Market Opportunities

• Growing Use of HVO in Aviation Sector: The aviation industry’s increasing focus on reducing carbon emissions presents a significant opportunity for Hydrotreated Vegetable Oil. HVO can be used as a sustainable aviation fuel (SAF), offering a drop-in solution compatible with existing aircraft engines and infrastructure. The International Air Transport Association (IATA) aims to achieve net-zero carbon emissions by 2050, with SAFs like HVO playing a crucial role in this transition. According to the U.S. Department of Energy, the global demand for SAF is expected to grow significantly, reaching up to 10 billion gallons annually by 2030, presenting a key opportunity for HVO producers to expand their market share in the aviation sector.
• Rising Adoption of Circular Economy Practices: The increasing emphasis on a circular economy, particularly in waste management and recycling, provides a substantial opportunity for HVO production from waste feedstocks such as used cooking oils and animal fats. By converting waste materials into high-quality fuel, the HVO market aligns with global efforts to reduce landfill waste and promote sustainability. According to the European Commission, the circular economy contributes nearly 8% of EU GDP, and the shift toward renewable biofuels further accelerates this trend by utilizing waste feedstocks, thus opening new avenues for HVO producers.
• Expansion in Emerging Economies: As emerging economies in Asia and Latin America continue to industrialize, the demand for cleaner and more sustainable energy solutions, including HVO, is rising. These regions are adopting renewable energy policies to mitigate the environmental impact of rapid industrialization. According to the International Renewable Energy Agency (IRENA), renewable energy accounted for 28% of total energy consumption in Latin America by 2020, with biofuels such as HVO seen as a key component in reducing carbon footprints. These markets present significant opportunities for HVO production and distribution expansion in the coming years.
• Technological Innovation in Feedstock Utilization: The development of new technologies to use a broader range of feedstocks for HVO production, such as algae, non-food crops, and agricultural residues, offers a substantial opportunity for market growth. Innovations in feedstock conversion processes are improving the sustainability and economic feasibility of HVO production. The U.S. Department of Energy reports that algae-based biofuels alone could provide up to 5 billion gallons of biofuel annually by 2030, further expanding the feedstock base and enhancing the potential for HVO market growth.

Hydrotreated Vegetable Oil Market Restrain & Challenges

• High Production Costs: The production costs associated with Hydrotreated Vegetable Oil remain a significant challenge for widespread adoption. The hydrotreatment process requires substantial energy input, which increases operational expenses. According to the U.S. Department of Energy, the cost of producing HVO is higher compared to conventional diesel, primarily due to the hydrogenation process and the specialized infrastructure needed. This high cost limits the economic viability of HVO in regions where cost-effectiveness is a critical factor, making it less competitive against cheaper fossil fuels, especially in emerging markets where budget constraints are more prominent.
• Limited Feedstock Availability: A major challenge for the HVO market is the limited availability of feedstocks, which can result in feedstock price volatility and competition with food industries. The production of HVO from vegetable oils, such as palm oil and soybean oil, competes with food production, leading to concerns about food security. According to the Food and Agriculture Organization (FAO), the growing demand for biofuels like HVO could exacerbate pressures on agricultural land and resources, making it increasingly difficult to meet both food and fuel needs without causing environmental harm.
• Lack of Consumer Awareness: Despite its environmental benefits, the HVO market faces challenges related to consumer awareness and acceptance. Many consumers are still unfamiliar with the advantages of HVO as a sustainable fuel alternative compared to conventional biofuels or electric vehicles. The U.S. Department of Energy reports that consumer awareness campaigns and education about the environmental benefits of HVO are crucial to drive its adoption. The lack of awareness, especially in regions outside of Europe, limits the market potential and slows the transition toward renewable fuels in several sectors, including transportation and aviation.
• Infrastructure and Distribution Limitations: Another key challenge facing the Hydrotreated Vegetable Oil market is the lack of adequate infrastructure for distribution and storage. While HVO can be used in existing diesel engines, the lack of widespread fueling stations and logistical infrastructure for its distribution limits its market reach. According to the European Commission, while the adoption of HVO is accelerating in Europe, other regions still lack the necessary infrastructure to support large-scale production and distribution of HVO, thus hindering its global growth potential.

Current Trends in the Hydrotreated Vegetable Oil Market

• Increased Adoption of HVO in Heavy-Duty Transport: One of the emerging trends in the Hydrotreated Vegetable Oil market is the growing adoption of HVO in heavy-duty transportation, including trucks, buses, and maritime transport. HVO is gaining traction due to its compatibility with existing diesel engines and infrastructure, making it an easy transition for fleets aiming to reduce their carbon footprint. According to the U.S. Environmental Protection Agency (EPA), renewable fuels like HVO are expected to reduce transportation sector emissions by up to 20% by 2030. This trend is supported by governments worldwide, offering incentives and mandates for cleaner fuels to curb pollution in high-emission industries.
• Advanced Feedstock Utilization Technologies: Technological advancements in feedstock utilization are shaping the future of the Hydrotreated Vegetable Oil market. New innovations are focused on expanding the variety of feedstocks that can be converted into HVO, including algae, agricultural residues, and waste oils. The U.S. Department of Energy highlights that algae-based biofuels could provide up to 5 billion gallons annually by 2030. These developments in feedstock flexibility are critical for improving the sustainability of HVO production and lowering costs, thus increasing market adoption globally, particularly in areas with limited access to traditional feedstocks like palm or soybean oil.
• Integration of HVO with Renewable Energy Systems: Another key trend in the HVO market is its integration with renewable energy systems, particularly in combination with solar and wind power. This trend is driven by the need for storage solutions for intermittent renewable energy sources. HVO can be used as a backup fuel for power generation systems that rely on renewable sources, providing grid stability. According to the International Renewable Energy Agency (IRENA), renewable energy systems combined with biofuels like HVO will play a crucial role in decarbonizing electricity generation and ensuring energy security, especially in regions with limited access to grid-connected power systems.
• Investment in Next-Generation HVO Production Technologies: The market for Hydrotreated Vegetable Oil is benefiting from increased investment in next-generation production technologies aimed at improving efficiency and scalability. Advances in catalytic processes and the development of more efficient reactors are expected to reduce the cost of HVO production significantly. According to the U.S. Department of Energy, next-generation production technologies have the potential to lower costs by up to 20%, making HVO more competitive with traditional fossil fuels. This trend is supported by both public and private sector investments, reflecting a growing focus on achieving global sustainability targets through affordable biofuels.

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Segmentation Insights

Hydrotreated Vegetable Oil Market Analysis, By Feedstock
By Feedstock, the market is divided into Palm Oil, Soybean Oil, Rapeseed Oil, Sunflower Oil, and Others.

• Palm oil is the largest segment in the Hydrotreated Vegetable Oil market due to its wide availability and relatively low cost compared to other feedstocks. Palm oil’s dominance is primarily driven by its efficiency in large-scale production, making it the preferred choice for HVO production, particularly in Southeast Asia. According to the Food and Agriculture Organization (FAO), palm oil accounts for nearly 40% of global vegetable oil production. This significant share is fueled by its high yield per hectare, making it a cost-effective option for biofuel production, and its importance is underscored by the EU’s Renewable Energy Directive, which identifies palm oil as a critical feedstock for renewable fuels.
• Soybean oil is the fastest-growing feedstock segment in the Hydrotreated Vegetable Oil market. Its rapid growth is attributed to the increasing focus on using domestically sourced feedstocks, especially in North America and South America, where soybean production is abundant. According to the U.S. Department of Agriculture (USDA), the U.S. produces over 120 million metric tons of soybeans annually, a significant portion of which is used for biofuel production. Soybean oil’s growing importance is further driven by its relatively high oil yield and its ability to meet environmental and sustainability goals. As global demand for sustainable fuels rises, soybean oil continues to emerge as a key feedstock, fueling its accelerated adoption in HVO production.

Hydrotreated Vegetable Oil Market Analysis, By Application
By Application Type, the market is categorized into Transportation Fuel, Industrial Power Generation, and Others.

• Transportation fuel is the largest segment in the Hydrotreated Vegetable Oil market due to the growing demand for cleaner fuels in the automotive and aviation industries. HVO is used as a direct replacement for diesel in vehicles, offering significant reductions in greenhouse gas emissions. According to the International Energy Agency (IEA), the transportation sector accounts for nearly 30% of global energy-related carbon dioxide emissions, and HVO is seen as a critical component of strategies to reduce these emissions. The high energy density and drop-in capability of HVO make it particularly attractive for large-scale adoption in diesel engines.
• Industrial power generation is the fastest-growing application segment in the Hydrotreated Vegetable Oil market. HVO’s ability to be used in existing diesel generators without modifications has made it an attractive option for industries seeking to reduce their carbon footprint. According to the U.S. Department of Energy, the demand for biofuels in power generation is growing as industries aim for cleaner energy alternatives. The global transition toward renewable energy sources and the increased focus on reducing the carbon intensity of power generation is driving the rise of HVO in this sector.

Hydrotreated Vegetable Oil Market Analysis, By End-User
By End-User Type, the market is categorized into Automotive, Aviation, Marine, and Others.

• The automotive sector is the largest end-user segment for Hydrotreated Vegetable Oil due to the widespread adoption of HVO as an alternative fuel to conventional diesel. HVO is compatible with existing diesel engines, making it a practical solution for reducing carbon emissions in the transportation sector. According to the European Commission, the transportation sector is responsible for a significant portion of global carbon emissions, and HVO’s ability to reduce particulate matter and nitrogen oxides has made it an attractive alternative. Its role in helping achieve decarbonization goals has increased its importance in automotive applications.
• Aviation is the fastest-growing segment for Hydrotreated Vegetable Oil, driven by the aviation industry's commitment to reducing carbon emissions. Airlines are increasingly exploring sustainable aviation fuels (SAFs), including HVO, as part of their strategies to meet global emissions reduction targets. According to the International Air Transport Association (IATA), the aviation sector accounts for around 2-3% of global CO2 emissions, and SAFs, including HVO, are expected to play a critical role in reducing this footprint. The push for more sustainable aviation fuels, backed by regulatory support, is contributing to the rapid growth of HVO adoption in the sector.

Hydrotreated Vegetable Oil Market Regional Insights

The market has been geographically analysed across five regions, Europe, North America, Asia Pacific, Latin America, and the Middle East & Africa.

• Asia-Pacific stands as both the largest and fastest-growing region in the global Hydrotreated Vegetable Oil (HVO) market. This leadership is driven by the region’s abundant availability of key feedstocks such as palm oil, used cooking oil, and other vegetable oils, which makes HVO production highly cost-effective. Countries like Indonesia, China, India, and Malaysia are investing heavily in renewable fuel infrastructure to reduce dependency on fossil fuels and address rising environmental concerns. Government-led initiatives—such as blending mandates, emissions reduction targets, and subsidies for biofuel production—are significantly accelerating HVO adoption across transportation, aviation, and industrial sectors. Additionally, rapid urbanization, a growing logistics industry, and increased demand for sustainable energy sources are fueling further expansion. Asia-Pacific’s dual role as a major consumer and exporter of renewable fuels, combined with supportive regulatory frameworks and strong economic growth, positions it firmly as the dominant force in the global HVO market.

Hydrotreated Vegetable Oil Market Competitive Overview

The Hydrotreated Vegetable Oil (HVO) market is highly competitive, with a mix of established players and emerging companies striving to capture market share through technological innovations and strategic partnerships. Key players in the market include global biofuel producers, oil companies, and renewable energy firms, such as Neste Corporation, Renewable Energy Group (REG), and TotalEnergies. These companies are investing heavily in expanding their production capabilities and enhancing their HVO production processes to cater to the growing demand for cleaner fuels. For instance, Neste is a leader in the HVO market, with its state-of-the-art facilities in Europe, and has been expanding into North America and Asia to meet the increasing need for sustainable fuels.

Additionally, several companies are focusing on improving feedstock efficiency and reducing production costs to make HVO more competitive with conventional fuels. Strategic collaborations and joint ventures are common in this market, with companies seeking to strengthen their market presence across various regions. As regulations become more stringent regarding carbon emissions and sustainability, players in the HVO market are also innovating to align with government policies and contribute to global carbon reduction goals. This competitive landscape is expected to drive further advancements in HVO technology and fuel production.

Leading Market Players in the Hydrotreated Vegetable Oil Market

• Neste Corporation: Neste Corporation is a global leader in the production of renewable diesel and sustainable aviation fuel derived from Hydrotreated Vegetable Oil (HVO). The company has a strong commitment to sustainability and reducing greenhouse gas emissions. Neste’s cutting-edge technology enables the production of high-quality renewable diesel that is used extensively in various industries, including transportation and heavy machinery. The company has expanded its operations worldwide, with a significant presence in Europe, North America, and Asia, and continues to lead the market by investing in the development of sustainable and low-carbon solutions for a cleaner future.
• TotalEnergies: TotalEnergies is a multinational energy company with a robust presence in the Hydrotreated Vegetable Oil market. It focuses on producing renewable diesel through HVO technology, which is integrated into its larger renewable energy strategy. TotalEnergies aims to lead the energy transition by producing cleaner fuels to replace conventional fossil fuels. The company’s commitment to sustainability is reflected in its ongoing investments in biofuel technologies, alongside its growing portfolio of low-carbon solutions. TotalEnergies is actively expanding its renewable diesel production capacity to meet the rising global demand for sustainable fuels across various industries.
• Renewable Energy Group (REG): Renewable Energy Group (REG) is one of the largest producers of renewable fuels in North America, specializing in HVO production. The company is committed to offering cleaner alternatives to conventional fuels, with a strong focus on reducing carbon emissions through its advanced biofuel solutions. REG operates a number of production facilities across the United States and has expanded its presence into Europe. The company focuses on the production of high-quality renewable diesel and sustainable aviation fuels, leveraging its expertise in HVO technology to provide innovative solutions for both the transportation and industrial sectors.

Top Strategies Followed by Players

• Expansion of Production Capacity: Leading players in the Hydrotreated Vegetable Oil (HVO) market, such as Neste and TotalEnergies, are focusing on expanding their production capacity to meet the growing global demand for renewable fuels. Neste, for instance, has significantly increased its HVO production in Europe and North America through strategic investments in new refineries. This expansion is critical in meeting stringent emissions regulations and supporting the transition to renewable fuels. According to the International Energy Agency (IEA), global demand for biofuels is expected to grow, which further highlights the importance of ramping up production capacity to ensure supply meets future demand.
• Strategic Partnerships and Acquisitions: Several market leaders are forming strategic partnerships and acquisitions to strengthen their position in the HVO market. Renewable Energy Group (REG), for instance, has partnered with Phillips 66 to expand renewable diesel production capabilities in the U.S. These collaborations provide companies access to new technologies, feedstock supplies, and regional markets. Partnerships allow for the sharing of research and development efforts, enhancing innovation and facilitating the scaling up of production. Such strategies are particularly essential in navigating the competitive landscape and aligning with the global energy transition goals of reducing carbon footprints.
• Investment in Research and Development (R&D): Investing in R&D is a key strategy adopted by companies like Shell and Preem AB to stay ahead in the HVO market. By advancing the technological efficiency of HVO production, these companies aim to reduce feedstock costs, improve yield, and lower the carbon intensity of biofuels. Shell, for instance, has committed to further advancing its biofuel technologies, including HVO, as part of its broader sustainability agenda. Innovations in feedstock processing and catalyst optimization are key to making HVO more cost-competitive with conventional fuels, helping drive its adoption across industries globally.

List of Companies Profiled in the Report are

• Neste Corporation
• TotalEnergies
• ENI S.p.A.
• Preem AB
• REG (Renewable Energy Group Inc.)
• UPM Biofuels
• Phillips 66
• Diamond Green Diesel
• Repsol S.A.
• Cepsa
• Galp Energia
• Neste MY Renewable Diesel
• Marathon Petroleum Corporation
• Valero Energy Corporation
• Shell plc.

Global Hydrotreated Vegetable Oil Market Report Scope and Key Segmentation

List of Segments Covered

This section of the Hydrotreated Vegetable Oil market report provides detailed data on the segments at country and regional level, thereby assisting the strategist in identifying the target demographics for the respective product or services with the upcoming opportunities.

By Feedstock

• Palm Oil
• Soybean Oil
• Rapeseed Oil
• Sunflower Oil
• Others

By Application

• Transportation Fuel
• Industrial Power Generation
• Others

By End-User

• Automotive
• Aviation
• Marine
• Others