Hydrotreated vegetable oil (HVO) is a renewable diesel produced by processing vegetable oils, animal fats, and other renewable feedstocks through hydrogenation. Its lower-carbon characteristics and compatibility with suitable diesel applications are increasing its relevance as European countries seek alternatives to conventional fossil fuels. Transportation remains a major application, while aviation and power generation are creating additional opportunities for renewable fuel adoption.

The Europe hydrotreated vegetable oil industry study examines the industry by type, feedstock, application, country, and leading companies. The study highlights increasing demand for sustainable transportation fuels, government initiatives supporting emissions reduction, corporate sustainability targets, availability of renewable feedstocks, rising aviation applications, and investments in European bio-refining infrastructure as major factors shaping industry development.

Transportation Drives HVO Adoption

Transportation represents the leading application for HVO across Europe. Heavy and medium commercial vehicles operated by logistics, automotive, chemical, manufacturing, and other industries consume substantial quantities of diesel, creating opportunities for lower-carbon alternatives.

Fleet operators are increasingly evaluating HVO as part of their sustainability strategies, particularly where replacing existing diesel-powered vehicles with alternative technologies may require significant infrastructure investment.

The European Union's revised renewable-energy framework gives additional policy support to lower-carbon transport. The Renewable Energy Directive allows member states to pursue either a 29% renewable-energy share in transport or a 14.5% reduction in greenhouse-gas intensity by 2030, alongside additional requirements for advanced biofuels and other renewable fuels.

Pure HVO Maintains a Leading Position

Pure HVO accounts for the prominent share among product types identified in the study. Unlike co-processed HVO, pure HVO is produced as a dedicated renewable fuel and can provide a higher renewable component depending on the feedstock and production pathway.

Its lower-carbon profile compared with conventional fossil diesel makes it attractive to companies seeking to reduce transportation emissions.

Fleet operators can also use pure HVO in compatible vehicles without requiring a complete transition away from liquid-fuel infrastructure, supporting its relevance during the broader shift toward lower-emission mobility.

Corporate Sustainability Targets Support Demand

European companies are increasingly establishing emissions-reduction targets and incorporating lower-carbon fuels into their operational strategies.

Logistics fleets, commercial vehicles, industrial equipment, and other diesel-dependent operations can represent significant sources of direct emissions. HVO provides one potential pathway for reducing the carbon intensity of these operations while companies evaluate longer-term electrification and alternative-energy solutions.

This trend is particularly relevant for businesses operating large fleets where fuel consumption is substantial.

Government Policies Encourage Renewable Fuels

European governments are implementing renewable-energy and climate policies to reduce dependence on fossil fuels and accelerate decarbonization.

The revised EU renewable-energy framework establishes a broader renewable-energy target of at least 42.5% by 2030, with an ambition to reach 45%. It also strengthens sector-specific measures for transport and other energy-intensive areas.

These policies create a supportive environment for renewable fuels while encouraging producers and fuel suppliers to invest in new infrastructure and technologies.

Feedstock Availability Supports Production

Europe has access to multiple feedstocks used in HVO production, including vegetable oils, animal fats, and other renewable materials.

The availability of feedstock provides opportunities for companies to establish or expand regional production facilities. Greater domestic production can also reduce dependence on imported renewable fuels and strengthen supply security.

However, the availability and sustainability of feedstocks remain important considerations because renewable fuel producers compete for agricultural oils, waste oils, fats, and other raw materials.

Feedstock Competition Creates Pressure

The growing demand for renewable diesel is increasing competition for suitable feedstocks. Used cooking oil, tallow, and vegetable oils are increasingly valuable to producers of HVO and other renewable fuels.

Recent European industry developments demonstrate this pressure. Fastmarkets reported in 2026 that HVO feedstocks such as used cooking oil, tallow, and rapeseed oil remained firm even as finished HVO prices and margins softened, reflecting constraints in the renewable-feedstock supply chain.

This makes sourcing strategies, supplier relationships, traceability, and feedstock diversification increasingly important.

Aviation Creates Additional Opportunities

Aviation is emerging as an important area for renewable-fuel development. European airlines and fuel producers are under increasing pressure to reduce emissions, creating opportunities for renewable fuels and sustainable aviation fuel pathways.

The Markntel Advisor study identifies rising HVO usage in aviation as a key industry trend.

Although aviation requires fuels that meet specific technical and regulatory standards, investment in renewable aviation fuels can increase competition for suitable feedstocks and encourage greater investment in bio-refining capacity.

Power Generation Expands Applications

Power generation provides another opportunity for HVO adoption. European countries seeking to reduce their dependence on imported fossil fuels can consider renewable fuels for selected backup and power-generation applications.

The energy disruptions associated with geopolitical tensions have also increased attention toward energy security and diversification.

HVO can potentially serve as a renewable alternative in diesel-powered generators and other applications where reliable liquid fuels remain necessary.

The UK Strengthens Renewable Fuel Interest

The United Kingdom is an important country within the European industry. Declining domestic fossil-fuel production, dependence on imports, and energy-security concerns are encouraging interest in renewable fuels.

The study highlights initiatives such as Net Zero 2050 as factors supporting the adoption of sustainable fuels.

HVO can therefore contribute to the UK's broader strategy of reducing carbon emissions while diversifying energy sources.

Germany and Italy Offer Strong Opportunities

Germany and Italy are among the important countries covered by the study. Both have substantial transportation and industrial sectors that create demand for fuels.

Italy is also strengthening its bio-refining infrastructure. In 2024, Eni confirmed its decision to convert its Livorno industrial site into a bio-refinery, including a 500,000-tonne-per-year Ecofining plant alongside feedstock pretreatment and hydrogen-production facilities. Eni's Livorno bio-refinery development illustrates the scale of investment taking place in European renewable-fuel infrastructure.

Production Costs Remain a Challenge

High production costs remain a significant constraint. HVO facilities require specialized processing equipment, hydrogen systems, catalysts, reactors, and supporting infrastructure.

The capital and maintenance requirements can increase production costs compared with conventional fossil diesel.

The study also notes that HVO prices can be higher than fossil fuels, potentially discouraging price-sensitive consumers and smaller businesses from switching.

Infrastructure Development Supports Accessibility

Expanding HVO production facilities and distribution networks can improve availability across Europe. Regional production can reduce supply-chain constraints and provide fuel suppliers with more reliable access to renewable products.

Existing fuel infrastructure can also support deployment in suitable applications, although availability varies by country and fueling network.

Greater accessibility will be important for increasing adoption among commercial fleets and other users.

Competitive Landscape

The competitive environment includes Repsol, Neste, Eni, Cepsa, Preem AB, TotalEnergies, Green Biofuels Limited, Valero, Shell, and Watson Fuels, among others.

Competition is influenced by production capacity, feedstock access, technology, refinery infrastructure, distribution networks, sustainability strategies, regulatory positioning, and investment in renewable-fuel facilities.

Companies with integrated feedstock procurement, refining, logistics, and distribution capabilities can strengthen their position as European demand for renewable fuels develops.

Conclusion

Europe's HVO industry is advancing through low-carbon transportation, renewable-energy policies, corporate sustainability targets, energy-security priorities, aviation applications, power generation, and expanding bio-refining infrastructure.

Pure HVO maintains a leading position, while transportation remains the primary application. The UK, Germany, Italy, France, Spain, Sweden, the Netherlands, and Finland provide different opportunities based on their energy policies, transportation requirements, industrial activity, and renewable-fuel infrastructure.

At the same time, feedstock competition, production costs, hydrogen requirements, and infrastructure investment remain important challenges. Companies that combine secure renewable feedstock supplies, efficient refining technology, strong distribution networks, regulatory expertise, and strategic investments in bio-refining capacity can strengthen their position as Europe continues its transition toward lower-carbon fuel systems.