An Overview of the Biodiesel Market and the Rising Demand for it

Overview of the Biodiesel Market

The following blog provides an overview of biodiesel, its advantages as well as the production process, major market participants, regional price analysis, and most recent development.

Biodiesel: Definition

Biodiesel is a renewable and biodegradable fuel composed of recycled restaurant grease, animal fats, and vegetable oils.

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Animal fats and oils such as canola, corn, and soybean, as well as other feedstock oils (grapeseed, sunflower, palm), are the most widely used sources of biodiesel. In its pure form, it is also referred to as B100 or neat biodiesel.

Biodiesel Applications

  • Being a clean-burning renewable fuel, biodiesel is a fantastic replacement for traditional petroleum-based fuels. The main advantages of using biodiesel as a transportation fuel are improved energy security and balance, environmental protection, reduced emissions, improved air quality, and increased engine performance.
  • The incorporation of biofuels improves national security while bringing down the price of energy for transportation for both enterprises and consumers. Also, it can function in many different types of engines as a direct substitute for traditional diesel or supplement the supply of conventional fuel.
  • Engines running on biodiesel emit less carbon dioxide and other emissions overall, thus enhancing the quality of the air.
  • The use of biodiesel improves fuel lubricity and raises the cetane number of the fuel blend, improving engine performance and extending the lifespan of its moving parts by preventing early damage.

Production Process of Biodiesel

Transesterification-Based Biodiesel Production from Fat or Vegetable Oil:

This method uses transesterification to produce biodiesel from fat or vegetable oil. Triglycerides (fats) found in oils (Feedstocks) are transformed into biodiesel by a chemical process called transesterification. In this process, triglyceride (fat/oil) and alcohol (methanol) are combined to create glycerol and an ester (methyl ester or biodiesel), which is then produced as the end product. Because it has a substantially lower viscosity than petroleum diesel, the biodiesel produced by the transesterification process is perfect for use in diesel engines.

Key Market Players in the Market of Biodiesel

  • Diester Industries
  • Neste Oil
  • ADM
  • Infinita Renovables
  • Biopetrol
  • Cargill
  • Ital Green Oil

Biodiesel Price Trend

North America

The price of feedstock palm and soybean oil varied throughout the period of the last few months, causing fluctuations in the price of biodiesel. In order to produce biodiesel, the regions of North America use a large volume of soybean oil. In October, the US market's biodiesel production capacity shifted due to a decline in the demand for feedstock.

The general prices decreased since there was enough supply on the domestic market to serve the local market. The federal renewable fuel requirement in the United States made the consumption of biodiesel mandatory; as a result, industrial functions remained moderate.

In the end, the storm Elliot caused disruptions in supply networks throughout most of North America.

Asia Pacific

Recently, due to the decline in feedstock costs in major Asian exporting countries, biodiesel prices fell in the Asia-Pacific area. China's cities were  in the shutdown phase till December 2022, which slowed down operations nationwide, restricted activity in the neighborhood's residential sectors, and impacted national output. Due to limited market and transit mobility, the regional market was subdued.

As there were no inquiries regarding the inventory's goods, all of these circumstances had an impact on the biodiesel manufacturing facilities. Due to the dullness of the market, producers and suppliers were under pressure to lower prices. Also, the delayed demand for the product from the transportation sector continued to have an impact on the biodiesel market in China.

The countries that produce the feedstock are Indonesia and Malaysia, and due to an excess of the commodity in each of those countries and aggressive trade practises, export prices had to be reduced.


Due to the stable current Biodiesel demand and rising fuel prices, the market dynamics for this fuel have recently been stagnant. Due to the continuing high cost of energy, the biodiesel production cost also increased accordingly. The German government's emphasis on food services in order to meet demand from the downstream industry led to a reduction in the import of biodiesel.

Following the devastation caused by the natural disaster in the Malaysian region, there were significant delays in the supply of Malaysian goods. The European market was quiet despite the continent's low industrial output and rising energy costs.

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Industry sources claim that businesses that lay off employees in the coming months run the risk of causing a recession in the local economy. The slow customer demand for the products put additional pressure on suppliers to keep costs consistent.

Biodiesel Recent Advancement

June 30, 2022: Biofuels typically cost twice as much as gasoline and diesel. Depending on the crop utilised, the price of biodiesel is currently 70 to 130 percent more expensive than the price of gasoline and diesel on the wholesale market. In recent years, the cost of biofuels in Europe has increased relative to the cost of fossil fuels. Price increases for the raw materials used to make biofuels, such as spent cooking oil, animal fats, grains, and vegetable oils, are widening the gap between them and fossil fuels.

From pricing trend studies to production cost reports, Procurement Resource provides all the crucial industry insights while taking into account the sectors and various commodities. By carefully examining goods and the crucial elements influencing their demand, growth, manufacturing, prices, and logistics, Procurement Resource has also been helping organisations make outstanding advances supported by the necessary knowledge.




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