Green diesel market seen reaching $92.3 billion by 2032

Allied Market Research sees the green diesel market reaching $92.3 billion by 2032 from $30.7 billion in 2022. The forecast implies 11.7% annual growth from 2023 to 2032, but the buildout behind that number is already running into tighter feedstock supply, softer prices and slower capacity additions.

In the United States, the Renewable Fuel Standard remains the central policy floor. The U.S. Environmental Protection Agency, working with the U.S. Department of Agriculture and the U.S. Department of Energy, finalizes annual volume requirements and percentage standards under the program, and the agency uses Renewable Identification Numbers to track compliance. The original RFS was promulgated in 2007, then expanded in 2010 under RFS2. EPA has finalized volume requirements for 2023, 2024 and 2025, keeping the compliance market in place for renewable diesel, SAF and other biofuels.

The supply side, however, is no longer expanding at the pace seen earlier in the cycle. U.S. renewable diesel and other biofuels capacity increased by 391 million gallons per year in 2024, less than one-third of the growth posted in 2022 and 2023. That slowdown lands as major producers keep scaling existing assets rather than flooding the market with new plants.

Diamond Green Diesel, the 50-50 joint venture between Valero Energy and Darling Ingredients, says it operates renewable diesel plants with 1.2 billion gallons per year of capacity and first produced renewable diesel in 2013. Valero’s 2024 annual filing showed Diamond Green Diesel sold $2.6 billion of renewable diesel and $47.3 million of neat SAF to Valero in 2024, down from $3.1 billion of renewable diesel in 2023. Valero also said DGD’s Port Arthur, Texas, plant is a 470-million-gallon-per-year renewable diesel facility and that it mechanically completed a large-scale SAF project there in October 2024.

Neste’s 2024 annual review pointed to the same pressure points from the other side of the market. The company said new players and added capacity lowered product prices and intensified competition for waste and residue feedstocks, cutting full-year comparable EBITDA to EUR 1,252 million from EUR 3,458 million in 2023. The road to $92.3 billion therefore runs through policy support, refinery conversions and SAF integration, but the latest operating data show the sector is now competing on margins as much as on nameplate capacity.