Global Hydrotreated Vegetable Oil Market 2024-2031

Global Hydrotreated Vegetable Oil Market 2024-2031

Global Hydrotreated Vegetable Oil Market Size, Share & Trends Analysis Report by Type (Pure HVO and Co-Processing), and by Application (Transportation, Industrial Power Generators and Others) Forecast Period (2024-2031)

The hydrotreated vegetable oil market is anticipated to grow at a significant CAGR of 12.4% during the forecast period (2024-2031). Hydrotreated vegetable oil, which comes from plant-based sources like vegetable oils or animal fats, is a sustainable and renewable substitute for conventional diesel fuel. It goes through a hydrotreatment procedure that takes out impurities and lowers the oxygen level, making it a high-grade, low-emission diesel replacement that works with current diesel engines.

Market Dynamics

Growing demand for cleaner fuels

These fuels are cleaner as when compared to conventional diesel fuels it emits less carbon dioxide and particulate matter, which lowers greenhouse gas emissions. It is also a feasible and environmentally suitable substitute in the shift to more environmentally friendly transportation options because of its exceptional cold-weather performance and ability to run without the need for engine modifications. Therefore, the growing demand for cleaner fuels globally is a key factor driving the growth of the global market.

The rising popularity of sustainable and renewable fuels

Hydrotreated vegetable oil is becoming increasingly popular as a result of industries' increased need for sustainable and renewable fuels to cut carbon emissions and achieve environmental sustainability. This is propelling the market's expansion. Hydrotreated vegetable oil (HVO) is a low-carbon fuel that produces a cleaner burning fuel with a considerable reduction in greenhouse gas emissions. It is an environmentally acceptable substitute for conventional diesel and fossil fuels.

Market Segmentation

Our in-depth analysis of the global hydrotreated vegetable oil market includes the following segments by type and application:

• Based on type, the market is sub-segmented into pure HVO and co-processing.

• Based on application, the market is segmented into transportation, industrial power generators and others.

Pure HVO is Projected to Emerge as the Largest Segment

Pure HVO is a highly used HVO form, the lower environmental effect of pure HVO compared to traditional fuels is driving the growth of this market segment. The raw materials used to make pure HVO are renewable and do not release any additional carbon dioxide (CO2) into the atmosphere.

Transportation Sub-segment to Hold a Considerable Market Share

HVO is widely utilized in the transportation industry. The increasing popularity of emissions-free automobiles has an impact on the widespread use of HVO in the transportation industry. With the introduction of stricter emissions rules, road transport companies expect HVO to lead the way toward a more environmentally friendly future.

Regional Outlook

The global hydrotreated vegetable oil market is further segmented based on geography including North America (the US, and Canada), Europe (UK, Italy, Spain, Germany, France, and the Rest of Europe), Asia-Pacific (India, China, Japan, South Korea, and Rest of Asia-Pacific), and the Rest of the World (the Middle East & Africa, and Latin America).

Asia-Pacific countries have new plants to meet the rising demand

• The number of plants producing HVO is growing in the Asia-Pacific, which is expanding the HVO production capacity.

• Growing demand for renewable fuel in place of petroleum-based diesel, which offers better performance in cold climates and requires less maintenance results in greater market demand.

North America Holds Major Market Share

In the US, there is an increasing need for vegetable oil that has been hydrotreated. The HVO sector is expanding due to growing concerns about lowering carbon emissions and the continuous switch to renewable energy sources. With HVO fuel, achieving a net zero goal without the requirement for CAPEX is easy and rapid, resulting in a 10.0% reduction in greenhouse gas emissions. Due to this, the fuel can sustainably replace fossil diesel. The growing use of this oil in aviation as a sustainable fuel. Its acceptance is also turning into a crucial trend for market expansion. The regional industry is growing as a result of the automobile sector's explosive demand for HVO.

Market Players Outlook

The major companies serving the global hydrotreated vegetable oil market include Neste, Valero Energy, Repsol, UPM Biofuels and Preem AB, among others. The market players are increasingly focusing on business expansion and product development by applying strategies such as collaborations, mergers, and acquisitions to stay competitive in the market. For instance, in January 2023, Neste acquired the used cooking oil collection and aggregation business from Crimson Renewable Energy in the United States. The acquisition includes shares in SeQuential Environmental Services, LLC, and Pure, LLC, as well as a UCO processing plant in Salem, Oregon. Neste acquired a leading UCO collection and recycling business on the US West Coast, covering the collection, logistics, and storage of UCO in California, Oregon, and Washington.