Hydrotreated Vegetable Oil (HVO) Market Size, Share, Trends, Value 2030

Hydrotreated Vegetable Oil (HVO) Industry Prospective:

The global hydrotreated vegetable oil (HVO) market size was worth around USD 14.5 billion in 2022 and is predicted to grow to around USD 44.3 billion by 2030 with a compound annual growth rate (CAGR) of roughly 15.0% between 2023 and 2030.        

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Hydrotreated Vegetable Oil (HVO) Market: Overview

A renewable form of diesel known as hydrogenated vegetable oil (HVO) may be created from a variety of vegetable oils and fats that include triglycerides and fatty acids. The term "HVO" refers to renewable diesel fuels produced via hydrocracking and hydrogenation of various feedstocks, including tall oil, rapeseed oil, spent cooking oil, and animal fats. HVO is also known as HEFA, or Hydro-processed Esters and Fatty Acids. Its chemical composition is generally comparable to that of fossil diesel. It differs from fossil diesel in a few ways, including having less energy and a lower density. With a high cetane number, HVO is devoid of oxygen, sulfur, and aromatic hydrocarbons. It is included in fossil diesel that is sold as blends at fueling stations and is currently the second-largest renewable diesel alternative globally.

Key Insights

• As per the analysis shared by our research analyst, the global Hydrotreated Vegetable Oil (HVO) market is estimated to grow annually at a CAGR of around 15.0% over the forecast period (2023-2030).
• In terms of revenue, the global Hydrotreated Vegetable Oil (HVO) market size was valued at around USD 14.5 billion in 2022 and is projected to reach USD 44.3 billion, by 2030.
• The Hydrotreated Vegetable Oil (HVO) industry is driven by several factors such as growing government initiatives to reduce CO2 emissions and the increasing automobile sector.
• Based on the type, the Pure HVO segment is expected to dominate the market.
• Based on the application, the transportation segment is expected to capture the largest market share over the forecast period.
• Based on region, North America is expected to dominate the market during the forecast period.

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Hydrotreated Vegetable Oil (HVO) Market: Growth Drivers

Growing government initiatives drive market growth

The rise in government measures to cut carbon emissions is one factor driving the expansion of the hydrotreated vegetable oil (HVO) industry. The demand for renewable energy sources and alternative fuels is rising as a result of many nations establishing aggressive goals to minimize their carbon footprint. The government is creating regulations and incentives to encourage the use of renewable diesel substitutes and biofuels in the transportation industry, which consumes a lot of HVO. The demand for HVO, which offers a sustainable and ecologically friendly substitute for conventional diesel, is expanding as a result of the need to address environmental issues and lessen reliance on fossil fuels.

Hydrotreated Vegetable Oil (HVO) Market: Restraints

Feedstock availability and competition limit the market growth

Production of HVO may be impacted by the availability and competition for feedstock sources like vegetable oils and animal fats. Prices and availability are subject to change, and rivalry with other sectors of the economy, such as the food and chemical industries, may increase prices and reduce the supply of acceptable feedstocks. Thus, the feedstock availability and competition are expected to limit the hydrotreated vegetable oil market growth during the forecast period.

Hydrotreated Vegetable Oil (HVO) Market: Opportunities

Green energy transition offers a lucrative opportunity for market growth

HVO offers a practical way to reduce the transportation sector's carbon footprint as nations and regions strive to switch to cleaner, more sustainable energy sources. HVO, a renewable and low-emission fuel, has a significant opportunity as a result of this transformation. For instance, according to the data published by the International Energy Agency, biofuel output has increased by 15% to 165 billion liters by the end of the predicted period. Despite strong growth in electric mobility, biofuels continue to account for about 90% of total renewable energy consumption in the transportation sector in 2023. Fuel ethanol accounts for two-thirds of biofuel production increases, with the remaining coming from biodiesel and hydrotreated vegetable oil (HVO). Therefore, the green energy transition is expected to offer a lucrative opportunity for hydrotreated vegetable oil market growth during the forecast period.

Hydrotreated Vegetable Oil (HVO) Market: Challenges

High production cost poses a challenge to market growth

HVO manufacturing can still be more expensive than conventional diesel refining, despite technical developments. In some areas, it might be difficult to compete with fossil fuel on price due to the high cost of hydrotreating and maintaining feedstock quality. Thus, this is expected to pose a major challenge to the HVO market growth over the forecast period.

Hydrotreated Vegetable Oil (HVO) Market: Segmentation

The global Hydrotreated Vegetable Oil (HVO) industry is segmented based on type, application, and region.

Based on the type, the global hydrotreated vegetable oil market is bifurcated into Pure HVO and Co-processing. The Pure HVO segment is expected to dominate the market during the forecast period owing to its favorable properties. Pure HVO has a high energy density, which implies it has a lot of energy per unit volume or weight. Because it has a similar energy content to normal diesel fuel, it is a potential substitute without affecting vehicle performance. Moreover, this has a very low sulfur concentration, often close to zero. In comparison, fossil diesel might include greater quantities of sulfur. Low sulfur emissions contribute to lower air pollution and reduce sulfur dioxide (SO2) generation when burnt. Thus, this is expected to drive the segment expansion during the forecast period.

Based on the application, the hydrotreated vegetable oil industry is bifurcated into transportation, industrial power generators, and others. The transportation segment is expected to capture the largest market share over the forecast period. HVO is utilized in diesel engines, including those found in automobiles, trucks, buses, trains, ships, and even off-road vehicles and equipment, as a direct replacement for standard diesel fuel. Because of its compatibility with current engines, it is a viable option for a variety of types of transportation. Furthermore, the potential of HVO to minimize greenhouse gas emissions is the key stimulant for its application in transportation. When compared to fossil diesel, HVO has a lower carbon intensity, resulting in reduced CO2 emissions when burned. Many transportation companies and governments want to reduce their carbon footprint, and HVO helps them do so. On the other hand, industrial power generators are expected to hold the largest market share over the forecast period. HVO is known for its excellent combustion properties, which can lead to improved fuel efficiency in industrial power generators. This means that for the same amount of fuel, generators can produce more electricity, resulting in cost savings and reduced fuel consumption. Thereby, driving the segment growth during the forecast period.

Hydrotreated Vegetable Oil (HVO) Market: Report Scope

Hydrotreated Vegetable Oil Market: Regional Analysis

North America is expected to dominate the market growth over the forecast period

North America is expected to dominate the global hydrotreated vegetable oil market over the forecast period. The market growth in the region is attributed to the growing regulation related to the environment. There has been a rising emphasis in North America, notably in the United States and Canada, on lowering greenhouse gas emissions from the transportation industry. To fulfill emission reduction objectives, several federal and state/provincial legislation, such as the Renewable Fuel Standard (RFS) in the United States and provincial mandates in Canada, have pushed the use of renewable fuels, including HVO. For instance, according to the Inventory of U.S. Greenhouse Gas Emissions and Sinks 1990-2021 (the national inventory that the United States compiles yearly under the United Nations Framework Convention on Climate Change), transportation accounted for the highest part (29%) of total U.S. GHG emissions in 2021.

The US emissions must be reduced by 50 to 52% by 2030 to qualify for the US to achieve a net-zero economy by 2050, according to the President's climate commitments. The Department of Transportation is dedicated to playing its part in meeting these goals. Sustainability and the environment are listed as important priorities for the Department in the upcoming years in its Strategic Plan. The Department is making great efforts to develop a transportation system that reduces greenhouse gas emissions that contribute to climate change, is robust to its effects, and advances environmental & climate justice. Thus, this is expected to drive the market growth in the region.

Hydrotreated Vegetable Oil (HVO) Market: Competitive Analysis

The global Hydrotreated Vegetable Oil (HVO) market is dominated by players like:

• UPM Biofuels
• World Energy
• Valero Energy
• Preem
• Cepsa
• Total
• REG
• Eni
• Neste
• Repsol
• ALFA LAVAL
• Crown Oil Ltd
• Desmet
• Shell
• Hyster-Yale Group
• Inc.
• Interion Pte Ltd
• Singapore
• Targray
• Advanced BioFuels USA
• Watson Fuels
• Rapid Energy Ltd
• Clonminam Industrial
• ADM
• Certas Energy

The global Hydrotreated Vegetable Oil (HVO) market is segmented as follows:

By Type

• Pure HVO
• Co-processing

By Application

• Transportation
• Industrial Power Generators
• Others

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa