Hydrotreated Vegetable Oil Market Industry Growth Prospects and Emerging Trends 2034

Hydrotreated Vegetable Oil, commonly referred to as HVO, is a renewable diesel fuel produced by hydrogenating vegetable oils and animal fats. The process removes oxygen and impurities, resulting in a clean-burning, sulfur-free, and aromatic-free fuel. HVO is chemically similar to fossil diesel, allowing it to be used as a drop-in fuel without requiring engine modifications or infrastructure upgrades. Feedstocks used in the production of HVO include rapeseed oil, tall oil, waste cooking oil, palm oil residues, and animal fats. The fuel offers superior combustion efficiency, high cetane numbers, and excellent cold-weather performance, making it a preferred alternative to conventional biodiesel.

The global Hydrotreated Vegetable Oil (HVO) Market in 2026 is witnessing strong growth momentum as renewable energy solutions gain prominence across transportation and industrial sectors. According to Fortune Business Insights™, the hydrotreated vegetable oil market size was valued at USD 21.36 billion in 2025. The market is projected to grow from USD 23.53 billion in 2026 to USD 45.00 billion by 2034, exhibiting a CAGR of 8.44% during the forecast period. Europe dominated the global market in 2025, accounting for a 49.70% market share, driven by stringent emission regulations and a strong push toward renewable fuels.

Market Drivers

The increasing focus on reducing greenhouse gas emissions is one of the primary drivers fueling the hydrotreated vegetable oil market growth. HVO fuels can reduce greenhouse gas emissions by over 50% compared to fossil-based diesel, and lifecycle emissions can be reduced by up to 80%, depending on feedstock selection.

Rising environmental awareness, government incentives, and renewable fuel mandates are further accelerating market adoption. HVO fuels are biodegradable, non-toxic, and significantly reduce emissions of carbon monoxide, particulate matter, and nitrogen oxides, making them suitable for urban transportation, logistics fleets, and heavy-duty vehicles.

Market Restraints

Despite strong growth prospects, the hydrotreated vegetable oil market faces certain challenges. High capital investment requirements for hydrotreating facilities can limit entry for new players. Additionally, the production cost of HVO is higher than traditional biodiesel, which can impact fuel pricing and adoption rates.

Availability and sustainability of feedstocks also pose challenges. The use of certain vegetable oils may raise concerns related to deforestation, land-use change, and food security, which can restrict long-term feedstock supply.

Market Report Coverage

The hydrotreated vegetable oil market report provides an in-depth analysis of market size, growth trends, drivers, restraints, competitive dynamics, and strategic developments. The study evaluates historical data and future projections to offer a comprehensive view of the industry landscape across key regions.

The report also highlights regulatory frameworks, sustainability initiatives, technological advancements, and investment trends influencing market growth. It serves as a valuable resource for stakeholders seeking insights into emerging opportunities and market positioning.

Market Segmentation

Based on type, the market is segmented into Pure HVO and Co-processing. Pure HVO dominates the market due to its superior environmental performance and compatibility with existing diesel engines. Co-processing involves integrating renewable feedstocks into existing refinery operations, offering flexibility to fuel producers.

By application, the market is categorized into Transportation, Industrial Power Generators, and Others. The transportation segment holds the largest market share, driven by rising adoption in commercial fleets, public transportation, and logistics operations. Industrial power generation is also gaining traction as industries seek cleaner backup power solutions.

Explore the full research report with detailed insights and TOC: https://www.fortunebusinessinsights.com/hydrotreated-vegetable-oil-market-107701 

Market Competitive Landscape

The global hydrotreated vegetable oil market is characterized by intense competition, with leading companies focusing on capacity expansions, strategic partnerships, and technological innovations. Key players are investing in sustainable feedstock sourcing and refining capabilities to strengthen their market presence.

Top Companies in the Market:

• Neste (Finland)

• Valero Energy (U.S.)

• World Energy (U.S.)

• Eni (Italy)

• Cepsa (Spain)

• Total (France)

• REG (U.K.)

• Preem (Sweden)

• UPM Biofuels (Finland)

• Repsol (Spain)

Market Regional Insights

Europe leads the hydrotreated vegetable oil market due to strong regulatory frameworks promoting renewable fuels and low-carbon transportation. Countries across the region have implemented strict emission standards, driving demand for cleaner diesel alternatives.

North America is expected to witness substantial growth, supported by renewable fuel standards and carbon reduction initiatives. Asia Pacific is emerging as a promising market due to increasing industrialization, rising energy demand, and growing investments in renewable fuel infrastructure.

Recent Industry Developments

In December 2022, Cepsa invested around USD 3.15 billion in European green hydrogen projects. The initiative aims to produce 300,000 tons of hydrogen per year, which will be utilized to power the company’s refineries as well as local heavy shipping and haulage operations.

Future Market Scope

The future of the hydrotreated vegetable oil market appears promising, driven by technological advancements, expanding applications, and supportive policy frameworks. Growing interest in sustainable aviation fuel and renewable diesel blends is expected to unlock new growth avenues.

As governments and industries intensify efforts to achieve carbon neutrality, HVO is expected to play a vital role in the global energy transition. Continued investments in production capacity and feedstock innovation will further enhance market growth over the forecast period.

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