India’s journey toward cleaner energy is accelerating — biodiesel is emerging as a key driver of the nation’s renewable energy transformation.

India Biodiesel Market Overview

According to the latest report from Renub Research, the India biodiesel market was valued at US$ 0.37 billion in 2024 and is expected to expand to US$ 0.69 billion by 2033, growing at a CAGR of 7.05% between 2025 and 2033.

This growth is fueled by:

·        Rising adoption of sustainable fuels in transportation and industrial applications

·        Strong government initiatives promoting renewable energy

·        Increasing focus on reducing greenhouse gas emissions

·        Expanding biodiesel production capacity across the country

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Why Biodiesel is Becoming India’s Fuel of the Future

1. Government Push for Renewable Energy

India’s National Policy on Biofuels and other state-level incentives have created a favorable regulatory environment for biodiesel production and consumption. This includes tax benefits, blending mandates, and funding for biofuel projects.

2. Growing Transportation Sector Demand

India’s rapidly expanding road transportation network — including trucks, buses, and delivery fleets — is increasingly turning to biodiesel blends to meet emission standards and lower operational costs.

3. Industrial Applications Expanding

Beyond transportation, biodiesel is also being adopted for power generation, agricultural machinery, and marine engines, reducing dependence on imported fossil fuels.

4. Environmental Benefits Driving Adoption

Biodiesel significantly reduces CO₂, SO₂, and particulate matter emissions, making it an attractive choice for industries aiming to achieve sustainability targets.

Market Segmentation Insights

The India Biodiesel Market & Forecast report provides a detailed breakdown of the industry:

By Application

·        Fuel – Dominates market share due to heavy transportation sector usage and government blending programs.

·        Power Generation – Growing adoption in rural electrification and backup power systems.

·        Others – Includes heating applications, industrial use, and marine fuel.

By Feedstock

·        Vegetable Oil – Primary feedstock, particularly from non-edible oil seeds like jatropha and pongamia, as well as recycled cooking oil.

·        Animal Fats – An emerging raw material source due to its cost-effectiveness and waste utilization benefits.

Regional Trends Within India

Northern India

States like Punjab, Haryana, and Uttar Pradesh are focusing on biodiesel from agricultural residues and non-edible oil crops, aligning with both energy and farmer income goals.

Western India

Gujarat and Maharashtra lead in biodiesel production due to strong industrial bases and government-backed renewable energy projects.

Southern India

Tamil Nadu, Karnataka, and Andhra Pradesh are pushing biodiesel adoption through public transport fleets and industrial use.

Eastern India

Emerging biodiesel markets in West Bengal and Odisha are leveraging biofuel for both transport and rural electrification projects.

Key Growth Drivers

1.     Energy Security – Reduces India’s reliance on imported crude oil.

2.     Sustainability Commitments – Supports India’s climate goals under the Paris Agreement.

3.     Waste Management – Encourages use of used cooking oil and agricultural residues.

4.     Rising Oil Prices – Makes biodiesel an attractive cost-competitive option.

5.     Corporate ESG Goals – Large companies are switching to biodiesel to meet environmental, social, and governance targets.

Competitive Landscape

The Indian biodiesel market features a mix of government-backed enterprises, private companies, and startups innovating in production technology and distribution networks. Leading companies are:

·        Emami Agrotech Ltd.

·        Universal Biofuels Pvt. Ltd.

·        Southern Online Bio Technologies Ltd.

·        My Eco Energy Pvt. Ltd.

·        BioD Energy (India) Pvt. Ltd.

These players are focusing on expanding feedstock sourcing, upgrading production facilities, and developing regional distribution channels.

Challenges and Opportunities

Challenges

·        Feedstock price volatility

·        Competition from electric mobility and other alternative fuels

·        Limited awareness in rural areas

Opportunities

·        Growth in second-generation biodiesel from algae and advanced feedstocks

·        Export opportunities to biodiesel-deficit countries

·        Public-private partnerships for large-scale blending programs

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Future Outlook

India’s biodiesel market is set to grow steadily over the next decade, driven by supportive policies, technological advancements, and increasing environmental consciousness among consumers and industries.

With biofuel blending targets, emerging feedstock innovations, and expanded adoption across transportation and power generation, biodiesel will remain a critical pillar in India’s renewable energy roadmap.

10 Frequently Asked Questions (FAQs)

1. What was the size of the India biodiesel market in 2024?
It was valued at US$ 0.37 billion.

2. What is the projected size of the market by 2033?
It is expected to reach US$ 0.69 billion.

3. What is the CAGR for the forecast period?
The market will grow at a CAGR of 7.05% between 2025 and 2033.

4. What are the main applications of biodiesel in India?
Fuel for transportation, power generation, and various industrial uses.

5. Which feedstocks are most commonly used in biodiesel production?
Vegetable oils (especially non-edible oil seeds) and animal fats.

6. What policies are supporting biodiesel growth in India?
The National Policy on Biofuels, state-level incentives, and blending mandates.

7. Which regions in India are leading in biodiesel adoption?
Western and southern states are at the forefront, with rapid adoption in public transport and industries.

8. How does biodiesel benefit the environment?
It reduces greenhouse gas emissions and helps in sustainable waste management.

9. Who are the major players in the India biodiesel market?
Companies like Emami Agrotech, Universal Biofuels, My Eco Energy, and BioD Energy are key market participants.

10. Can biodiesel help India reduce oil imports?
Yes, by replacing a portion of diesel consumption, biodiesel reduces dependency on crude oil imports.

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