Europe Biodiesel Market Overview - 2032
The Europe biodiesel market size was valued at $25.1 billion in 2022 and is estimated to reach $34.0 billion by 2032, exhibiting a CAGR of 3.1% from 2023 to 2032.
The global Europe biodiesel market is experiencing growth due to several factors such as the rise in energy security concerns, environmental regulation, and developments in renewable fuel standards. However, engine and fuel economy, as well as early infrastructure expenses, limit market expansion to some extent. Furthermore, an upward trend in subsidies and incentives provides lucrative opportunities for expanding the European biodiesel industry.
Introduction
Biodiesel is a sustainable biofuel used to power vehicles to reduce the carbon footprint from the transportation sector government institutions such as the Environmental Protection Agency have set various regulations for the application of biofuels.
Biodiesel also known as biofuel can be produced from plant sources such as algae, waste oils, palm oil, and camelina; from solid biomass using a chemical process called transesterification which converts natural fats and oils into fatty acid methyl esters or biodiesel. High-quality biodiesel is produced from rapeseed, however, most of the biodiesel is produced from waste vegetable oils obtained from chip shops, restaurants, and industrial food producers.
Key Takeaways
The Europe biodiesel market analysis is highly fragmented, with several players including Cargill Incorporated, Eni S.p.A., Bunge, Kolmar, Ital Bi Oil S.R.L., Bp Oil International Ltd., Tamoil Italia S.P.A., Italiana Petroli S.P.A., Esso Italiana S.R.L., Masol Continental Biofuel Srl, and Saras S.P.A.
More than 6,765 product literatures, industry releases, annual reports, and other such documents of major industry participants along with authentic industry journals, trade associations' releases, and government websites have been reviewed for generating high-value industry insights.
- The study covers Europe in terms of value and volume during the forecast period 2022-2032 is covered in the Europe biodiesel market report.
Market Dynamics
The cost of biodiesel production in Europe exhibits significant variability, influenced by factors such as raw materials, production scale, and geographical location. Notably, biodiesel prices experienced a notable drop in the European market, reaching $2,583/ton FD Hamburg in April during the second quarter of 2023. According to the International Energy Agency (IEA), biodiesel prices in Europe have displayed fluctuations over the years. Additionally, biodiesel production costs vary across different feedstocks, with estimated costs ranging from $0.53 to $11.13 per gallon for palm oil, soybean oil, and algae, depending on specific production circumstances.
It is crucial to acknowledge that the cost of biodiesel production generally surpasses that of conventional diesel, with a differential of about 25 to 27 cents per liter, factoring in a 6% increase in fuel consumption with biodiesel. However, ongoing investments in research and development, along with increased experience in commercial-scale projects, hold the potential to mitigate these costs in the future. In summary, despite the current cost differentials, ongoing advancements in the biodiesel industry are anticipated to contribute to cost reduction, making biodiesel an increasingly viable and environmentally beneficial alternative to conventional fuels in Europe. It is crucial to note that these costs are subject to fluctuations influenced by raw material prices, technological advancements, and other dynamic factors. These insights underscore the multifaceted nature of biodiesel production economics and the need for adaptability within the industry.
The future of biodiesel market holds promising prospects as it is poised to play a significant role in the global energy landscape. The anticipated increase in global biofuel demand, particularly driven by higher blending targets in developing countries, signals a positive trajectory for biodiesel. Governments worldwide are actively supporting biofuels through strategic policies, exemplified by initiatives like India's National Bioenergy Program, which is set to continue until 2025–2026.
Biodiesel's potential contribution to reducing air pollution, carbon emissions, and dependence on fossil fuels aligns with broader environmental goals. However, the industry faces challenges, including conversion efficiency and yield issues, impacting commercial feasibility and competitiveness. The ongoing pursuit of innovative process intensification alternatives aims to address these challenges and enhance biodiesel's viability. It's important to note that the realization of these projections depends on various factors, including technological advancements, policy changes, and market dynamics. As the biofuel landscape evolves, these dynamic influences are expected to shape biodiesel's role in the energy mix.
Biodiesel stands out as a versatile and accessible alternative fuel for diesel engines, offering compatibility with minimal or no modifications required for existing diesel vehicles. This adaptability is a key advantage, allowing biodiesel to be seamlessly integrated into conventional diesel engines without compromising performance. The flexibility extends to blending ratios, with biodiesel capable of being mixed with diesel fuel in any proportion or used as a pure fuel (B100). Common blends like B20 (6% to 20% biodiesel) and B5 (5% biodiesel, 95% diesel) are widely used in fleet vehicles without necessitating engine modifications. However, biodiesel's higher viscosity poses challenges to fuel filters and injectors, as well as potential issues in cold temperatures. While a standard diesel engine runs on pure biodiesel with modifications, it's advisable to consult engine manufacturers' guidelines to ensure compatibility and warranty compliance.
Segments Overview
The Europe biodiesel market report is segmented into feedstock, application, and country. By feedstock, the market is divided into recycled cooking oil, animal fats, cashew nutshell liquid (CNSL), distillation residues, fatty acids, palm oil mill effluent (POME), spent bleaching earth oil (SBEO), and others. By application, it is segregated into automotive, aviation, marine, power generation, and others. On the basis of country, the Europe biodiesel market trends is analyzed across Germany, France, UK, Spain, Italy, and Rest of Europe.
On the basis of feedstock, the recycled cooking oil segment held the highest market share in 2022, accounting for more than two-fifths of the Europe biodiesel market revenue, and is estimated to maintain its leadership status throughout the forecast period. The global push for renewable energy sources and the circular agriculture paradigm offer opportunities for market expansion. As investments grow, the Europe biodiesel market is poised to capitalize on recycled cooking oil for environmental and economic benefits.
By Feedstock
Recycled Cooking Oil is projected as the most lucrative segment.
On the basis of application, the automotive segment held the highest market share in 2022, accounting for more than two-fifths of the Europe biodiesel market revenue and is estimated to dominate during the forecast period. Automotive engine manufacturers are incorporating biodiesel blends into their engines due to their higher cetane number, which enhances ignition quality and combustion efficiency. However, others segment is projected to manifest the highest CAGR of 3.8% from 2023 to 2032. Biodiesel is gaining interest in military applications, residential heating, and industrial heating due to its efficiency and environmental benefits. Biodiesel is also used in residential heating systems, providing cleaner indoor air quality and reducing environmental impact. It is also used in industrial applications for process heat and steam generation. Biodiesel is compatible with existing heating systems, making it a practical and accessible option for residential heating.
By Application
Automotive is projected as the most lucrative segment.
On the basis of country, Rest of Europe, followed by Germany dominated the Europe biodiesel market share. Germany's wholesale biodiesel price decreased by over 20 cents in January 2024, reaching 161.11-euro cents per metric ton. The market value of biodiesel reached $3,396.6 million in 2021, with a market volume of 1,081.2 million gallons. Germany's biofuel production increased by 1.3% between 2012 and 2022, reaching 62,000 barrels of oil equivalent per day in 2022.
In 2022, Germany was the largest biodiesel producer in Europe, with a production volume of 3.4 million tons, primarily using rapeseed oil as its feedstock. France followed as the second-largest producer, producing 2.2 million tons, also relying on rapeseed oil. The UK made a smaller but significant contribution to the Europe’s overall biodiesel output, though its exact production volume was less prominently reported. Spain produced 1.6 million tons of biodiesel, using a mix of soybean oil and waste oils. Italy produced 1.3 million tons, with rapeseed oil and other vegetable oils as the primary feedstocks.
In the first nine months of 2023, Germany delivered 9% more biodiesel to other EU member states, ranking third among the biggest biodiesel exporters in the European Union.
By Country
Rest of Europe is projected as the most lucrative segment.
Competitive Analysis
The major players operating in the Europe biodiesel industry include Cargill Incorporated, Eni S.p.A., Bunge, Kolmar, Ital Bi Oil S.R.L., Bp Oil International Ltd., Tamoil Italia S.P.A., Italiana Petroli S.P.A., Esso Italiana S.R.L., Masol Continental Biofuel Srl, and Saras S.P.A.
Recent Developments from Major Players:
BP and Bunge Joint Venture: BP acquired Bunge’s 50% stake in their joint biofuel venture, bp Bunge Bioenergia, which is one of Brazil's largest biofuel producers. This acquisition allows BP to fully control biofuel production, signaling its commitment to expanding in the biofuels market, particularly in South America.
Cargill Inc.: Cargill continues to expand its footprint in biofuel production, particularly in biodiesel derived from vegetable oils. The company focuses on increasing production capacity and developing sustainable biofuel solutions for the Europe market.
Eni S.p.A.: Eni invested in new bio-refineries across Europe, converting traditional oil refineries into green energy production hubs. Eni focuses on expanding its production of HVO biofuels (hydrotreated vegetable oil).
Bunge: Along with the BP joint venture, Bunge has been working on expanding its biofuel capabilities through joint projects and investments, focusing on agricultural feedstock for biodiesel production.
Kolmar: Kolmar is expanding its sustainable biofuel production facilities across Europe, with a focus on biodiesel, as part of its effort to cater to increasing demand for renewable fuels.
IEA Future Outlook: The IEA projects significant growth in the biofuel industry in Europe, driven by policies aimed at reducing carbon emissions and increasing energy security.
Key trends include:
Biofuel Demand Growth: Demand for biofuel is set to increase by 30% from 2023-2028 globally, with Europe playing a significant role in this growth. This increase is supported by policies targeting transport decarbonization and sustainability goals.
Contribution to Road Transport: By 2030, biofuels are expected to account for 6% of road transport energy in Europe, bolstered by large-scale projects and enhanced regulatory frameworks.
- Advanced Biofuels: A European Commission report indicates that advanced biofuels will play a critical role, with production capacity expected to expand significantly by 2030. The EU’s biofuel demand is expected to rise by 2.5 times as compared to 2021 levels.
Key Market Trends
- On the basis of feedstock, recycled vegetable oil registered the highest market share accounting for more than two-fifths of the market share.
- Based on application, other segments which include military and industrial heating applications are expected to grow at a CAGR of 4.2% from 2023 to 2032.
- On the basis of country, Germany dominates the highest market share accounting for nearly one-fifth of the market share.
Europe Biodiesel Market Report Highlights
| Aspects | Details |
 By Feedstock |
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 By Application |
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 By Country |
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 Key Market Players | Saras S.P.A, Tamoil Italia S.P.A., Italiana Petroli S.P.A., Bp Oil International Ltd., Bunge, Kolmar, Masol Continental Biofuel Srl, Esso Italiana S.R.L., Eni S.p.A., Ital Bi Oil S.R.L., Cargill Incorporated |
Analyst Review
The Europe biodiesel market stands at the forefront of a green energy revolution. Industry leaders and CXOs emphasize its transformative potential, offering a cleaner, more sustainable alternative to traditional fossil fuels. With continuous innovation, strategic investments, and a commitment to environmental responsibility, the Europe biodiesel market is poised to play a significant role in shaping the future of the global energy landscape.
The Europe biodiesel market is undergoing a transformative phase, driven by insights from industry leaders and key stakeholders. Recognized as a crucial player in the renewable energy sector, biodiesel offers a sustainable alternative to traditional fossil fuels. Industry experts and CXOs emphasize the pivotal role that biodiesel plays in meeting the world's growing energy demands while addressing environmental concerns.
Biodiesel, derived from renewable resources such as vegetable oils and animal fats, serves as a cleaner and greener substitute for conventional diesel. As per industry leaders, biodiesel contributes significantly in reducing greenhouse gas emissions, while fostering a more sustainable and eco-friendly energy landscape.
Tailored solutions and technological advancements are key drivers of growth in the Europe biodiesel market. Advanced production techniques, efficient feedstock utilization, and continuous research and development are integral components shaping the industry's trajectory. The adaptability of biodiesel solutions further boosts their significance in meeting diverse energy needs and contributing to a more sustainable future.
Despite the presence of environmental benefits, challenges persist in the Europe biodiesel market. Economic factors, regulatory frameworks, and the need for continuous innovation limit its widespread adoption. However, the long-term advantages, including reduced dependence on finite fossil fuels and lower carbon footprints, positioned biodiesel as a key player in the transition towards cleaner energy solutions.
Investment remains a critical aspect of the biodiesel sector. While there may be initial costs associated with the adoption of biodiesel technologies, industry leaders support the market due to enduring benefits that outweigh these upfront expenditures. The Europe biodiesel market potential to streamline operations, enhance energy security, and promote environmental stewardship makes it an attractive proposition for investors looking to contribute to a sustainable and resilient energy future.
Technical proficiency and customer support play a pivotal role in overcoming challenges in the Europe biodiesel market. Robust training initiatives are essential to equip stakeholders with the knowledge and skills required for seamless operations, ensuring the effective integration of biodiesel into existing energy infrastructures.
Rise in energy security concerns, environment regulations, and development in renewable fuel standards drives the growth of Europe Biodiesel Market.
The Europe Biodiesel Market was valued at $ 25.1 billion in 2022 and is estimated to reach $ 34.0 billion by 2032, exhibiting a CAGR of 3.1% from 2023 to 2032.
The major players operating in the Europe Biodiesel Market include Cargill Incorporated, Eni S.p.A., Bunge, Kolmar, Ital Bi Oil S.R.L., Bp Oil International Ltd., Tamoil Italia S.P.A., Italiana Petroli S.P.A., Esso Italiana S.R.L., Masol Continental Biofuel Srl, and Saras S.P.A.
Surge in government support and incentives are the opportunities for the Europe Biodiesel Market.
The Europe biodiesel market is segmented into feedstock, application, and country. By feedstock, the market is divided into recycled cooking oil, animal fats, cashew nutshell liquid (CNSL), distillation residues, fatty acids, palm oil mill effluent (POME), spent bleaching earth oil (SBEO), and others. By application, it is segregated into automotive, aviation, marine, power generation, and others.
Initial infrastructure cost and engine & fuel efficiency restrains the growth of Europe Biodiesel Market
Automotive segment dominated based by application in the market.
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