Hydrotreated Vegetable Oil Market - By Source of Feedstock (Food and Feed Crops, Animal Fats, Used Cooking Oils, Palm Oil Mill Effluent), By Grade, By Technology Type, By Application & Forecast, 2024 – 2032

Hydrotreated Vegetable Oil Market Size

Hydrotreated Vegetable Oil Market was valued at around USD 24.2 billion in 2023 and is expected to register a CAGR of over 13.3% between 2024 and 2032. Hydrotreated vegetable oil (HVO), a renewable fuel sourced from vegetable oils and animal fats, is produced through cutting-edge hydrogenation processes.
 

The automotive industry is increasingly embracing HVO as a direct substitute for traditional diesel, capitalizing on its seamless compatibility with current engines and infrastructure. This shift not only supports the industry's sustainability objectives but also responds to regulatory mandates aimed at curbing emissions. With ongoing advancements in HVO production technology enhancing its performance and viability, and with the global appetite for renewable energy solutions on the rise, HVO is poised to play a pivotal role in addressing the world's environmental and energy challenges.
 

The hydrotreated vegetable oil (HVO) market faces challenges due to high production costs and strong competition from other renewable fuels. Producing HVO requires advanced technology and large investments in infrastructure, making it more expensive than traditional fossil fuels. These high costs can prevent widespread use, especially in markets sensitive to price changes. Additionally, HVO competes with other renewable fuels like biodiesel and ethanol, which also aim to capture market share in the shift to sustainable energy. These alternative fuels may have lower production costs or established supply chains, increasing competition and affecting HVO’s market growth. Therefore, managing production costs and standing out from competing renewable options are crucial for HVO to expand its market presence and gain broader acceptance in various sectors.
 

Hydrotreated Vegetable Oil Market Trends

The hydrotreated vegetable oil (HVO) market has evolved significantly in recent years. Currently, there is a growing focus on using HVO in various sectors beyond transportation, such as aviation and marine fuels, highlighting its versatility and sustainability benefits. In the past, HVO was used mainly in niche applications due to high production costs, but advancements in technology have gradually reduced these costs. Looking ahead, the market is expected to grow faster due to increasing regulatory pressures on carbon emissions and rising corporate investments in green technologies. This trend will likely expand HVO's application scope and enhance its market appeal.
 

Hydrotreated Vegetable Oil Market Analysis

Based on source of feedstock, the market is segmented into food and feed crops, animal fats, used cooking oils, palm oil mill effluent and others. Food and feed crops held the dominant market share of USD 16.7 billion in 2023 and are expected to grow significantly with CAGR of 12.7% till 2032. Food and feed crops are the main feedstock because they are widely available and suitable for large-scale production. This segment mainly uses crops like soybeans and canola, which are common and cost-effective. Animal fats and used cooking oils also play a big role, offering sustainable options and reducing waste. Palm oil mill effluent and other sources, such as non-edible vegetable oils, algae oils, and refining byproducts, are becoming more popular. However, these emerging sources currently make up a smaller part of the market.
 

Based on grade, the hydrotreated vegetable oil market is segmented into Class 1: premium grade HVO, Class 2: standard grade HVO, Class 3: basic grade HVO and Class 4: specialty grade HVO. Class 2: Standard Grade HVO accounted for major market share in 2023 is projected to grow through 2032 at a CAGR of 13%. Class 2: standard grade HVO leads because it balances performance and cost. This makes it ideal for transportation and industrial uses. Standard Grade HVO meets key quality standards and is more affordable than Class 1: premium grade HVO, which is more expensive for specialized uses. The wide use of Standard Grade HVO shows it is suitable for general use and meets industry needs for a reliable and affordable renewable fuel.
 

Based on technology type, the market is segmented into standalone hydrotreating technology and co-processing technology. Standalone hydrotreating technology is the leading method because it is efficient and can produce high-quality HVO from various feedstocks. This technology works independently, allowing for production facilities that focus on optimizing output and quality. In contrast, co-processing technology combines HVO production with existing refining processes but is less common. The standalone method's better control over the hydrotreatment process makes it the market leader and widely used.
 

Based on application, the hydrotreated vegetable oil market is segmented into sustainable aviation fuel, automotive fuel, marine fuel, industrial power generation, heating fuel, agricultural equipment fuel and lubricants. Automotive fuel is the main use of HVO because it works well with diesel engines and helps reduce emissions. HVO can replace regular diesel, making it very attractive for the transportation sector, which needs cleaner fuels. This common use in vehicles drives most of the market demand, showing HVO's role in supporting sustainable transportation and meeting environmental standards.
 

Europe stands out as the leading region in the, propelled by rigorous environmental regulations and robust backing for renewable fuels. The European Union's bold sustainability objectives, coupled with incentives for cleaner energy, have markedly accelerated HVO adoption throughout the continent. According to the European Environment Agency (EEA), the EU aims to reduce greenhouse gas emissions by at least 55% by 2030. Furthermore, Europe's advanced production facilities and established market infrastructure solidify its leadership. This preeminence underscores Europe's dedication to curbing carbon emissions and championing renewable energy innovations.
 

Hydrotreated Vegetable Oil Market Share

The global hydrotreated vegetable oil market is highly competitive, with top companies like Neste, TotalEnergies, and Valero Energy leading the way. Each playing a pivotal role in the sector's evolution. Neste, with its vast experience and state-of-the-art technology in HVO production, has cemented its status as a global frontrunner in renewable diesel. Through continuous investments in R&D and strategic expansions, Neste not only fortifies its market position but also spearheads innovation.
 

TotalEnergies bolsters this dominance with a strong commitment to weaving HVO into its renewable energy blueprint. Utilizing its expansive global infrastructure and technological prowess, the company adeptly navigates stringent environmental regulations, solidifying its stature in the shift towards cleaner fuels.
 

Hydrotreated Vegetable Oil Market Companies

Major players operating in the industry include:

• ALFA LAVAL
• Cepsa
• Desmet
• DIAMOND GREEN DIESEL
• Neste
• Preem
• Repsol
• Shell
• TotalEnergies
• UPM Biofuels
• Valero Energy
• World Energy
   

Hydrotreated Vegetable Oil Industry News

• In July 2024, In October 2023, Neste welcomed the French government’s approval for selling transport fuels made from 100% renewable raw materials in France. This decision supports Neste’s HVO and renewable diesel offerings, aligning with their commitment to sustainable energy solutions and expanding their market presence in Europe
   
• In April 2024, Repsol launched large-scale production of renewable fuels at its Cartagena facility, the first of its kind on the Iberian Peninsula. This state-of-the-art plant will primarily produce renewable diesel and other sustainable fuels, underscoring Repsol's dedication to environmental sustainability and bolstering its presence in the renewable energy sector. The move is designed to strengthen the company's position in the shift towards cleaner fuels.
   
• In November 2023, Cepsa began selling renewable diesel, including Hydrotreated Vegetable Oil (HVO), from its new production facilities. This launch marks a significant milestone in Cepsa's strategy to expand its renewable energy offerings, aiming to meet growing market demand for sustainable fuels and support the transition to cleaner energy solutions
   

The hydrotreated vegetable oil market research report includes in-depth coverage of the industry, with estimates & forecast in terms of revenue and volume (USD Billion) (Kilo Tons) from 2021 to 2032, for the following segments:

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Market, By Source of Feedstock

• Food and feed crops 
  • Soybean oil
  • Canola oil
  • Sunflower oil
  • Palm oil
  • Others
• Animal fats 
  • Tallow
  • Lard
  • Used cooking oils
  • Palm oil mill effluent
• Others (non-edible vegetable oil, algae oils, and refining byproducts)

Market, By Grade

• Class 1: premium grade HVO
• Class 2: standard grade HVO
• Class 3: basic grade HVO
• Class 4: specialty grade HVO

Market, By Technology Type

• Standalone hydrotreating technology
• Co-processing technology

Market, By Application

• Sustainable aviation fuel
• Automotive fuel
• Marine fuel
• Industrial power generation
• Heating fuel
• Agricultural equipment fuel
• Lubricants

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

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