Bio-based Naphtha Market Size – By Source, Application, Downstream Application Analysis, Share, Growth Forecast, 2025 - 2034

Bio-based Naphtha Market Size

The global bio-based naphtha market size was valued at USD 902.5 million in 2024 and is estimated to grow at a CAGR of over 13.5% from 2025 to 2034, due to the increasing demand of sustainable fuels. Renewable diesel is produced from oils and fats, like canola oil, soybean oil, and is then processed to be chemically equal to petroleum diesel. As per the estimates of International Energy Agency (IEA), by 2027, the demand for biofuels globally is expected to grow by around 20% a year. In compliance with Renewable Transport Fuel Obligation (RTFO), ethanol consumption in the UK is expected to increase by 50%.
 

The demand for biofuel is expected to rise by 38 billion litres between 2023 and 2028, which is about 30% more than it was during the previous five years. In fact, by 2028, the demand for biofuels will be increased by 23% to 200 billion litres, with two-thirds of this growth coming from renewable diesel and ethanol, while the remaining portion coming from biodiesel and biojet fuel.
 

According to U.S. Energy Information Administration, the United States' sustainable aviation fuel (SAF) production capacity rose from around 2,000 barrels per day (b/d) to about 30,000 b/d in 2024. Developers anticipate that Diamond Green Diesel's Port Arthur SAF project will generate around 15,000 b/d of SAF by the end of the year 2024, while Phillips 66's Rodeo Renewed project will start producing up to 10,000 b/d of SAF in 2024.
 

Increasing environmental concerns, strict government regulations to minimize carbon emissions and increased focus on renewable sources of energy are the main factors driving the demand for sustainable fuel which will in turn drive the demand for bio-based naphtha.
 

Bio-based Naphtha Market Trends

Increasing adoption of renewable feedstock- With focus on sustainability is increasing bio-based naphtha is gaining popularity as apt alternative for petroleum derived naphtha. Manufacturers are actively looking for renewable feedstocks like agricultural residue, vegetables oils to produce bio-based naphtha. This initiative is supported by government incentives, carbon reduction policy and rising popularity of sustainable raw materials in fuel and chemical industries.
 

Expansion of biorefinery capacities- UPM who is a leading global player in bio-based industries, announced that they are moving forward with their biofuels growth plan and have started the basin engineering phase of advanced biorefinery. This biorefinery will have 50,000 tons annual capacity of top-quality renewable fuels which includes sustainable jet fuels. This product will significantly reduce the carbon footprints in aviation and road transport and will replace fossil raw materials with sustainable alternatives in bioplastics.
 

Increasing Interest from the Petrochemical Sector- Petrochemicals sector have started to use bio-naphtha as a feedstock with the goal of producing bio-based plastics, synthetic rubbers, and other chemicals. The promising players in polymers manufacturing have started substituting conventional raw materials with bio-based ones in order to minimize their carbon emissions and meet sustainability targets. This is becoming more prevalent in Western Europe and North America where regulations and customer expectations are becoming more demanding.
 

Strategic partnerships- Businesses operating in the bio-based naphtha market are developing strategic collaborations with feedstock suppliers, technology developers, and end users to gain the competitive advantage in the market. The collaboration among biorefinery operators and petrochemical companies is helping produce premium bio-naphtha with varied applications. Cooperation agreements and industrial R&D are also directed towards increasing productivity and reducing expenses.
 

Technological advancements in bio-naphtha production- Technological advancements in the market are enhancing scalability and efficiency of manufacturers for example Honeywell introduced new technology to make kay feedstock for plastic. Honeywell in UPO Ecofining process produced bio-based naphtha will lesser CO2 footprint compared to petroleum-based feedstock.
 

Bio-based Naphtha Market Analysis

In terms of source, the market is segmented into vegetables oil and biomass. The vegetable oil segment is estimated to be valued at USD 2.4 billion by 2034.
 

Vegetable oil is bio-based naphtha industry is comparatively popular source owing to many reasons including, wide availability, sustainable sourcing which makes it environmentally friendly and practical option versus other biomass sources. Vegetable oils offer renewable feedstock with lower carbon footprint when it is used to product naphtha for plastic and other chemical applications.
 

The US Department of Agriculture estimated that global production of vegetable oils in the ongoing crop year will hit a record level at 224.2 million tons. Which essentially means a 2.7 million ton rise year-on-year. Consumption is calculated at 221.7 million tons, up 5.3 million tons on the previous year. This ample availability of vegetable oil makes it popular source in bio-based naphthaindustry.
 

With respect to application, the petrochemicals segment is expected to expand at more than 12% CAGR between 2025 and 2034, with an estimated target valuation exceeding USD 2.6 billion by 2034.
 

This popularity of petrochemicals in bio-based naphtha market is due to many reasons. Bio-based naphtha offers environmentally friendly alternative to conventional fossil fuel derived naphtha, which allows manufacturers to produce petrochemical products and plastic with reduced carbon footprint while still using existing petrochemical manufacturing facilities. Hence manufacturer become able to meet growing environmentally friendly product demand of the consumers and comply with strict government regulations.
 

Demand for petrochemicals in developing countries like India is expected to rise significantly. According to Ministry of Petroleum and Natural Gas Indian chemicals and petrochemicals market size is estimated to grow to around USD 300 billion by the end of 2025 up from its current market size USD 220 Billion. Also, petrochemicals industry in India is expected to reach USD 1 trillion by 2040.
 

Petrochemical consumption in India is between 25 to 20 million tons. India is the third largest economy in Asia Pacific, still its per capita consumption is significantly lower than developed nations. This gap represents ample opportunities and scope for growth in new future. This rise in petrochemical consumption will in turn increase demand for bio-based naphtha market.
 

The U.S. bio-based naphtha industry is anticipated to depict a CAGR of more than 12% from 2025 to 2034. The U.S. may account for over USD 381 million worth of revenue share by 2034.
 

U.S. manufactures and consumes renewable energy fuels from forest lands on a commercial scale which impacts energy markets. This includes biofuels which have an important share in fuel consumption of the U.S. transport sector. Major biofuels include Ethanol (predominantly produced from corn) and biodiesel along with renewable diesel (which are produced from vegetable oils and animal fats, waste oils, and greases).
 

In 2022, the United States ethanol production amount reached about 15.4 billion gallons whereas the total production of biodiesel and renewable diesel reached about 3.1 billion gallons. Considering bio-based naphtha’s important role in manufacturing biodiesels the demand for bio-based naphtha in U.S. is expected to grow significantly in forecasted period.
 

Also government initiatives in US helping country to ramp up its renewable fuels production, for example Diamond Green Diesel (DGD), who is a major producer of renewable diesel (and bio-naphtha) in U.S., received approval to start construction of its planned 470 million gals/year production facility at Port Arthur, Texas, refinery, which started its operations in the second half of 2023.
 

Bio-based Naphtha Market Share

The top 5 companies in the bio-based naphtha industry includes Neste, Diamond Green Diesel, UPM Biofuels, Shell, and Eni. To gain competitive advantage manufactures are going through various mergers and acquisitions for example In September 2023, Suntory Holdings and ENEOS Corporation decided to come together for the collection of used cooking oil in Japan.
 

Suntory Group is also planning to take advantage of this collaboration to produce bio-based PET bottles by using bio-naphtha locally produced at ENEOS Corporation's SAF plant which is scheduled to start its operations after 2027. In July 2024, Japanese manufacturers Mitsubishi and Finnish refiner Neste planned to increase sales of Neste's bio-based naphtha by enhancing their collaboration in Japan.
 

The companies signed a partnership agreement, with an aim to co-operate on pushing a switch from traditional petroleum naphtha to Neste's bio-naphtha. They plan to push Japanese downstream companies or users of petrochemical plastics and goods, for example food and beverage suppliers, apparel manufacturers and electric appliance manufacturers, to introduce bio-naphtha into their supply chains. Mitsubishi and Neste have already collaborated on supplying bio-naphtha to produce renewable paraxylene for Japanese customer Goldwin and Suntory.
 

Indorama Ventures Public Company Limited, who is well known a sustainable chemical producer worldwide, as part of a collaboration with Suntory, Mitsubishi Corporation, ENEOS Corporation, Iwatani and Neste, will introduce the first ever bio-PET bottle for commercial scale, manufactured from ISCC+ certified bio-paraxylene2. This collaboration underlines an important milestone in the journey toward environmentally friendly packaging, launching PET bottles made from used cooking oil. PET bottle produces from this technology can reduce CO2 emissions of products significantly.
 

The Suntory Group subsequently introduced these bio-PET bottles for products in Japan. The partnership will see the launch of around 45 million bottles of PET beverages made with this technology with further introduction for Suntory products to be considered soon. By adding the expertise and resources of main players along the value chain, this initiative underlines the power of partnership in addressing global sustainability issues.
 

Bio-based Naphtha Market Companies

Major players operating in the bio-based naphtha industry are: 

• Diamond Green Diesel
• Eni
• Euglena
• Gevo
• Kaidi Finland
• Neste
• Phillips 66
• Repsol
• Shell
• UPM Biofuels
   

Bio-based Naphtha Industry News

• In May 2023, Finland based beauty brand LUMENE launched a sustainable packaging application with jar and label made with UPM’s unique wood-based material, additionally processed by SABIC.
   
• LUMENE’s new jar and the self-adhesive label is made from renewable UPM BioVerno naphtha, manufactured by UPM in Finland. The naphtha is further processed into certified renewable polypropylene by SABIC, who is a global leader in the chemical sector, and then converted both in recyclable cosmetics containers and product labels printed on UPM Raflatac Forest Film label material.
   
• Dow in collaboration with UPM Biofuels, who is a producer of advanced biofuels, announced the commercialization of a plastics products for packaging industry made of a bio-based feedstock.
   
• Dow is using UPM BioVerno renewable wood-based naphtha which is a key raw material used to develop plastics, creating a second source for plastics production. Dow is using this feedstock to make bio-based polyethylene (PE) at its manufacturing facility in Terneuzen, The Netherlands, for use in packaging applications like food packaging to reduce food waste. After a successful 12 months-long trial program, Dow is planning to ramp up production and address the rising global demand for renewable plastics.
   
• In March 2024, HD Hyundai Chemical Co. of South Korea declared that it will work with CJ CheilJedang Corp. to manufacture environmentally friendly bio-naphtha and plastic goods made from it. In order to create an environmentally friendly bio-circular system at HD Hyundai Chemical's headquarters in Daesan, South Chungcheong Province, the two businesses inked a commercial arrangement.
   
• As per the agreement, CJ CheilJedang will provide HD Hyundai Chemical with a consistent supply of bio-raw materials, including soybean oil and leftover cooking oil. HD Hyundai Chemical will manufacture bio-naphtha from bio-raw materials and return the environmentally friendly plastic to CJ CheilJedang. Convenient home meal containers and packaging materials from CJ CheilJedang will be made of environmentally friendly plastic.
   

The bio-based naphtha market research report includes in-depth coverage of the industry, with estimates & forecast in terms of revenue (USD Billion) & volume (Kilo Tons) from 2021 to 2034, for the following segments:

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Market, By Source

• Vegetable oils
• Biomass

Market, By Application

• Petrochemicals
• Gasoline
• Bio benzene
• Bio phenol
• Others

Market, By Downstream Application

• Bio polyethylene (Bio-PE)
• Bio polypropylene (Bio-PP)
• Bio polyvinyl chloride (Bio-PVC)
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • Australia 
• Latin America
  • Brazil
  • Mexico
• MEA
  • UAE
  • Saudi Arabia
  • South Africa