Europe Biodiesel Market: Market Size & Forecast 2026

Biodiesel in Europe is predominantly produced as FAME (Fatty Acid Methyl Ester), with the industry structured around feedstocks such as rapeseed oil, used cooking oil (UCO), soybean oil, palm oil, and animal fats. The EBB's member base collectively accounts for a substantial share of European production capacity, with member countries spanning key producing nations across the EU. Volume-wise, the European market approaches or exceeds 20 million tonnes of annual demand, making it one of the largest biodiesel consuming regions globally.

• •European Biodiesel Board established January 1997, representing 35+ member companies and 8 National Associations across 21 countries
• •Rapeseed oil and used cooking oil (UCO) are the dominant feedstocks for FAME biodiesel production
• •Germany, France, Spain, and the Netherlands are among the leading biodiesel consuming and producing countries in the region

The primary engine of market growth is the EU's regulatory framework, including the Renewable Energy Directive (RED III) which mandates a minimum 29% share of renewables in transport energy consumption by 2030. Carbon pricing through the EU Emissions Trading System and the Energy Taxation Directive further improve the economic competitiveness of biodiesel over fossil diesel. Additionally, national mandates and blend requirements in individual member states create consistent structural demand across the bloc.

• •RED III mandates 5.5% advanced biofuels (from UCO, animal fats, etc.) in transport by 2030, up from 1.7% in 2022
• •EU ETS carbon pricing and fuel quality directives increase the cost-competitiveness of renewable fuels versus fossil diesel
• •De-fossilization commitments under the European Green Deal and Fit for 55 package sustain long-term policy support

The European biodiesel market is segmented by feedstock type, with conventional feedstocks (primarily rapeseed oil) historically dominant but gradually ceding share to waste-based feedstocks like UCO driven by sustainability criteria. The market also encompasses the growing Hydrotreated Vegetable Oil (HVO) and renewable diesel segment, which is expanding alongside traditional FAME production. Geographically, production and consumption are concentrated in Western and Central Europe, with Germany, France, Spain, Italy, Poland, and the Netherlands representing the largest national markets.

• •Rapeseed oil-based biodiesel dominates conventional production, while UCO-based volumes are growing fastest due to double-counting incentives under RED
• •Germany is Europe's largest biodiesel consumer by volume, followed by France, Spain, and Italy
• •The HVO and renewable diesel segment is emerging as a growth area, with new capacity planned across Northern and Western Europe

What are the recent trends and outlook?

The market is seeing a structural shift from conventional crop-based biodiesel toward waste and residue feedstocks, driven by sustainability criteria that limit the role of food-crop biofuels under RED III. Aviation biofuel (Sustainable Aviation Fuel or SAF) production is emerging as a significant demand vector, with several European biodiesel producers adding HVO capacity capable of supplying the SAF market. Feedstock supply constraints and the need for new collection infrastructure for UCO and animal fats are recognized as key bottlenecks to sector growth through the 2030 horizon.

• •UCO-based biodiesel is the fastest-growing feedstock segment due to higher greenhouse gas savings and regulatory double-counting
• •SAF demand from European airlines under ReFuelEU Aviation regulation is expected to drive new HVO production capacity from the late 2020s onward
• •The European biodiesel market is forecast to reach approximately $26.9 billion by 2035, supported by decarbonization policy momentum