Advertise
The global renewable diesel market is projected to hit USD 64.1 billion by 2036, growing at a compound annual growth rate (CAGR) of 8.4% from 2026 to 2036. According to data from Future Market Insights, the market is estimated to reach USD 28.6 billion in 2026, up from USD 26.4 billion in 2025. This growth trajectory is closely linked to regulatory support, such as the Environmental Protection Agency's announcement on March 27, 2026, setting final Renewable Fuel Standard volumes for biomass-based diesel at 8,860 million RINs for 2026 and 8,950 million for 2027.
Leading industry players are reporting robust financial outcomes. Neste achieved record sales volumes of 1.29 million tons in the third quarter of 2026, with margins soaring to USD 1,068 per ton from USD 480 a year earlier. Valero's renewable diesel segment turned a prior year loss into USD 353 million in operating income for Q3 2026, supported by margins of USD 1.62 per gallon. Meanwhile, Darling Ingredients reported that its Diamond Green Diesel venture sold 314.9 million gallons in the same quarter, achieving an adjusted EBITDA of USD 1.30 per gallon.
Soybean oil remains the dominant feedstock, accounting for approximately 38% of the market in 2026. The USDA projects soybean oil usage for biofuels to rise significantly to 17,800 million pounds in 2026/27, while domestic exports are expected to drop as more of the crop is processed locally. This heightened demand is driving soybean oil prices toward an average of 70.00 cents per pound. Policy measures like the 45Z clean fuel production credit further solidify this trend by requiring feedstocks to be sourced exclusively from North America for fuel produced after December 31, 2025.
Road transportation fuel continues to be the primary application, representing 42.5% of the market. Renewable diesel's compatibility with existing infrastructure under ASTM D975 standards makes it a seamless replacement for petroleum diesel. Looking forward, the industry is pivoting toward aviation and marine sectors due to strict mandates. EU regulations now require a 2% sustainable aviation fuel (SAF) share by 2025, while maritime emissions cuts are scheduled to reach 80% by 2050. Despite the positive outlook, producers face risks from margin volatility and credit exposure, as seen in Phillips 66's recent income dip and Eni's planned biorefinery shutdowns.
Source: Future Market Insights