India Biodiesel Market Size and Share Analysis - Growth Trends and Forecast Report 2025-2033

India Biodiesel Market Trends & Summary

The size of the India biodiesel market is expected to reach around US$ 0.69 billion by 2033. However, in 2024, it was valued at US$ 0.37 billion, and from 2025 to 2033, the CAGR is likely to be around 7.05%. It is driven by increasing adoption of sustainable fuels, government initiatives for renewable energy, and a rising focus on reducing carbon emissions in the transportation and industrial sectors.

The report India Biodiesel Market & Forecast covers by Application (Fuel, Power Generation, Others), Feedstock (Vegetable Oil, Animal Fats), and Company Analysis 2025-2033.

India Biodiesel Market Outlooks

Biodiesel is a renewable, eco-friendly fuel derived from natural sources such as vegetable oils, animal fats, and used cooking oils. It is produced through a chemical process called transesterification, which converts oils into fatty acid methyl esters (FAME), making them suitable for use in diesel engines. In India, biodiesel is gaining popularity as a sustainable alternative to conventional diesel due to its lower carbon emissions and reduced environmental impact.

In India, biodiesel finds extensive use in various sectors, including transportation, power generation, and industrial applications. It is blended with traditional diesel in different ratios, such as B5 (5% biodiesel and 95% diesel), to enhance fuel efficiency and reduce harmful emissions. Biodiesel-powered vehicles, including buses and trucks, are becoming more prevalent, especially in urban and rural areas, contributing to a cleaner environment. Biodiesel is also being used in power plants and generators to produce electricity, thus assisting the renewable energy projects across India. It supports the circular economy by using waste cooking oil and agriculture by-products in the country that is aligned with the sustainability objective of India while reducing the usage of fossil fuel.

Growth Drivers in the India Biodiesel Market

Government Initiatives and Policies

The Indian government has launched a range of initiatives and policies aimed at promoting the production and utilization of biodiesel, one of the key components of sustainable energy. Among these efforts is the National Bio-Energy Mission, which serves as a cornerstone for the country's commitment to increasing the use of renewable fuels. This mission is not only giving a framework for the development of biodiesel projects but also offers various incentives and subsidies to encourage investment and participation in this eco-friendly sector. By fostering a supportive environment for sustainable fuels, these policies are significantly contributing to the growth of the biodiesel market and paving the way for a greener future. In 2018 India issued its National Policy on Biofuels, which provided for targets of 20% ethanol blending by 2030 and 5% biodiesel blending by 2030, specified feedstock requirements for various fuels, and outlined the responsibilities of 11 ministries to coordinate government actions.

Increasing Environmental Consciousness

As worries about air pollution and the emissions of greenhouse gases continue to rise, the need for cleaner and more sustainable fuel alternatives, such as biodiesel, has become increasingly urgent. Public awareness regarding the detrimental effects of fossil fuels on the environment, coupled with a significant commitment from governments to prioritize environmental protection, has catalyzed the adoption of biodiesel across various sectors. This growing momentum reflects a collective effort to transition towards energy sources that not only reduce harmful emissions but also contribute to a more sustainable and eco-friendly future. The Ministry of Environment, Forest and Climate Change (MoEF&CC), Government of India envisages to celebrate the World Environment Day 2023 with a thrust on the Mission LiFE. The concept of LiFE, introduced by the Hon'ble Prime Minister of India, aims to promote sustainable living by encouraging individuals to make changes in their lifestyles and emphasizes responsible and conscious use of resources to safeguard and conserve the environment.

Availability of Feedstocks

The supply of raw materials essential for biodiesel production in India has experienced significant growth, encompassing sources like used cooking oil, waste biomass, and oilseeds. This rich and varied array of feedstocks not only guarantees a consistent and reliable influx of raw materials but also helps drive down production costs. As a result, this abundance of resources is crucial in fostering the expansion of the biodiesel market, paving the way for a more sustainable energy landscape in the country. According to a ScienceDirect article, India is expected to have 411.8 million vehicles in operation by 2030, with 260.1 million and 34.6 million being gasoline- and diesel-powered cars, respectively. The demand for gasoline and diesel fuels will rise dramatically from the current level by 2030, and India will have to deal with the ensuing problems. India must use biofuels, including biodiesel, in the transportation sector to reduce the impact of these fuels.

Challenges in the India Biodiesel Market

High Production Costs

The production of biodiesel continues to be hindered by high expenses, primarily stemming from the cost of feedstocks and the sophisticated technology necessary for its efficient manufacturing. These factors contribute to a limited cost competitiveness when compared to conventional diesel fuel, creating significant barriers to its widespread adoption. As a result, the growth of the biodiesel market faces considerable challenges, making it difficult for this renewable energy source to gain traction in the broader fuel landscape.

Supply Chain and Distribution Issues

India faces tremendous barriers in developing an efficient and effective supply chain for the production of biodiesel. India suffers from less efficient networks that are also more prone to logistics bottlenecks, which result in delays and ultimately affect the biodiesel availability within the expected timelines. This causes a major problem in the extensive use of this fuel source and limits the maximum benefits from this source of energy for the sake of sustainability. It still persists with fossil fuel-based sources.

India Biodiesel Fuel Market

The India biodiesel fuel market is expanding as the country focuses on sustainable and renewable energy solutions. Biodiesel, derived from feedstocks such as used cooking oil, jatropha, and palm oil, is increasingly adopted to reduce carbon emissions and enhance energy security. With government initiatives like the National Bio-Energy Mission and incentives for biodiesel production, the market is growing. Additionally, biodiesel blends such as B5 and B20 are being utilized in transportation and industrial sectors, supporting India's transition to greener fuels and reducing dependence on fossil fuels. February 2024, Over the next five years biofuel demand is set to expand 38 billion litres, a near 30% increase from the last five-year period. In fact, total biofuel demand rises 23% to 200 billion litres by 2028, with renewable diesel and biojet accounting for almost half of this growth with the remainder coming from ethanol and biodiesel.

India Biodiesel Power Generation Market

The biodiesel power generation market in India is experiencing significant growth, propelled by a surge in renewable energy initiatives. This shift is increasingly seeing biodiesel being utilized in power plants and generators for electricity production, playing a crucial role in India's transition towards cleaner energy sources. By embracing biodiesel, the country aims to decrease its dependence on fossil fuels, thereby contributing to a more sustainable and environmentally friendly energy landscape. This transition not only supports national energy security but also aligns with global efforts to combat climate change and promote renewable technologies.

India Vegetable Oil Biodiesel Market

The vegetable oil biodiesel market in India is experiencing robust growth, driven by the utilization of various feedstocks such as rapeseed, palm oil, and other oilseeds. This sustainable method of biodiesel production not only promotes the efficient use of natural resources but also plays a significant role in mitigating environmental impact. It aligns seamlessly with India's broader renewable energy objectives, reflecting the country's commitment to cleaner energy solutions and reducing its carbon footprint. By harnessing these local agricultural products, the market not only supports rural economies but also contributes to a more sustainable energy landscape in India.

West India Biodiesel Market

The biodiesel market in West India is experiencing consistent growth, significantly influenced by agricultural-based production methods and a rising demand for cleaner, more sustainable fuel alternatives, particularly in states such as Maharashtra and Gujarat. This upward trend is largely supported by governmental policies that actively promote renewable energy initiatives in the region, creating a favorable environment for market expansion and innovation in biodiesel technologies. As consumer awareness of environmental issues increases, the push for eco-friendly fuel options is expected to further bolster this burgeoning sector.

East India Biodiesel Market

The biodiesel market in East India is undergoing significant expansion, driven by a commitment to harness local feedstocks like rice bran oil and jatropha for biodiesel production. This shift not only aims to satisfy the region's growing energy demands but also emphasizes sustainability by utilizing resources readily available in the area. As East India aligns its initiatives with national renewable energy objectives, it is fostering a path of sustainable growth that benefits both the economy and the environment. By focusing on these indigenous resources, the region is poised to play a vital role in the larger narrative of sustainable energy development.

South India Biodiesel Market

The biodiesel market in South India is witnessing a dynamic expansion, driven by the rich availability of various feedstocks such as coconut and palm oil. These local resources are not only plentiful but also contribute to the region's unique agricultural landscape. As governments and organizations introduce initiatives focused on lowering carbon emissions, biodiesel is increasingly recognized as a vital component of South India's renewable energy strategy. This shift towards biodiesel is not only promoting sustainability but also fostering a greener future for the region by integrating eco-friendly practices into everyday energy consumption.

North India Biodiesel Market

The biodiesel market in North India is experiencing notable growth, particularly in states such as Punjab and Haryana, where innovative biodiesel solutions are being embraced for both agricultural and industrial purposes. This surge in adoption is largely motivated by a commitment to combat pollution and promote sustainable practices. As farmers and industries seek to reduce their carbon footprint, the demand for biodiesel has intensified, leading to a vibrant market landscape. The shift towards renewable energy sources reflects a broader trend of environmental consciousness that is reshaping the region's economic and ecological future.

India Biodiesel Market Segments

Application - Market breakup in 3 viewpoints:

1. Fuel

2. Power Generation

3. Others

Feedstock - Market breakup in 2 viewpoints:

1. Vegetable Oil

2. Animal Fats

All the Key players have been covered from 3 Viewpoints:

• Overview
• Recent Development
• Revenue Analysis

Company Analysis:

1. Archer Daniels Midland Company

2. FutureFuel

3. Neste's

4. Renewable Energy Group, Inc.

5. Bunge Global SA

6. Wilmar

7. Shell