The UK biodiesel market stands at a critical juncture. With the 2030 petrol and diesel vehicle sales ban approaching and net-zero commitments driving policy, many assume biodiesel’s role will simply diminish. However, the reality is considerably more nuanced. While passenger vehicle electrification accelerates, biodiesel faces a complex landscape where heavy goods transport, agricultural machinery, and existing diesel infrastructure create sustained demand even as the overall fuel market contracts. This article examines three realistic scenarios for biodiesel market share through 2030, grounded in current policy trajectories rather than aspirational targets. These projections acknowledge that biodiesel’s future depends not on a single policy lever but on the interplay between feedstock economics, fleet transition speeds, and the practical limits of electrification in certain transport segments. Understanding these scenarios is essential for anyone making investment, operational, or strategic decisions in the UK energy sector today.

The Current Biodiesel Landscape in the UK

Market Position as of 2024-2025

Biodiesel currently represents approximately 3.5 to 4.2 per cent of the total UK road transport fuel mix by volume, though this figure masks significant complexity. The Renewable Transport Fuel Obligation requires fuel suppliers to ensure that a proportion of their fuel comes from renewable sources, with biodiesel fulfilling a substantial portion of this mandate. UK biodiesel consumption reached roughly 1.8 to 2.1 billion litres in 2024, with approximately 75 to 80 per cent derived from waste feedstocks such as used cooking oil and tallow, reflecting the RTFO’s emphasis on wastes and residues through its double-counting mechanism. Domestic production capacity sits at around 600 to 700 million litres annually, meaning the UK remains a substantial net importer of biodiesel, primarily from European producers who benefit from established supply chains and feedstock access. The heavy goods vehicle sector accounts for the majority of biodiesel consumption, with agricultural and construction machinery representing smaller but important demand segments.

Recent Policy Developments Shaping Trajectory

The Renewable Transport Fuel Obligation’s evolution continues to define biodiesel’s operating environment. Recent adjustments have increased the renewable fuel mandate whilst strengthening sustainability criteria and reinforcing the preference for waste-based feedstocks over crop-based alternatives. However, the UK’s post-Brexit regulatory independence has created both opportunities and uncertainties. While the government can theoretically tailor policy to UK-specific circumstances, the practical reality is that feedstock markets, technology supply chains, and investment capital remain deeply interconnected with European networks. The Transport Decarbonisation Plan acknowledges that liquid biofuels will play a transitional role, particularly in hard-to-electrify segments, but stops short of providing the long-term certainty that would catalyse major domestic production investment. This policy environment favours incremental adjustment over transformative change.

The Three Scenario Framework

Baseline Continuation Scenario (2025-2030)

Under this scenario, biodiesel market share remains relatively stable in percentage terms whilst absolute volumes decline modestly alongside the overall diesel market contraction. By 2030, biodiesel would represent approximately 4 to 5 per cent of a significantly smaller total fuel market. This trajectory assumes the RTFO mandate increases gradually as planned, reaching 12 to 14 per cent renewable content across all transport fuels, with biodiesel maintaining its current share of that renewable portion against competition from bioethanol and emerging alternatives. The key assumption here is that heavy goods vehicle electrification proceeds slower than some optimistic forecasts suggest, whilst the passenger diesel fleet declines predictably. Feedstock availability constraints limit production growth, with waste-based feedstocks approaching maximum sustainable collection rates and crop-based biodiesel remaining marginalised by sustainability concerns and economic viability. Import dependency continues, with domestic production growing minimally due to limited infrastructure investment in an uncertain long-term market. This scenario essentially describes managed decline with biodiesel serving a clearly defined niche role.

Accelerated Transition Scenario

This more optimistic projection sees biodiesel market share reach 6 to 7.5 per cent by 2030, driven by several reinforcing factors. Firstly, heavy goods vehicle electrification encounters more practical barriers than anticipated, including infrastructure rollout delays, battery technology limitations for long-haul applications, and total cost of ownership concerns that extend diesel’s economic viability. Secondly, successful development of advanced biodiesel production using agricultural residues and innovative feedstocks expands supply without competing with food production or exhausting waste streams. Thirdly, the government provides enhanced RTFO targets and introduces complementary policies that improve biodiesel’s competitive position, perhaps through carbon pricing mechanisms that better reflect lifecycle emissions advantages. This scenario also assumes moderate success in expanding domestic feedstock collection infrastructure and processing capacity, reducing import dependency from approximately 65 per cent to around 45 to 50 per cent. Importantly, this is not a best-case fantasy but reflects what could occur if current positive indicators around heavy transport diesel persistence and feedstock innovation strengthen moderately over the next five years.

Constrained Growth Scenario

This scenario addresses meaningful downside risks that could limit biodiesel penetration to 2.5 to 3.5 per cent market share by 2030. Accelerated battery technology improvements and charging infrastructure investment could enable heavy goods vehicle electrification to proceed faster than baseline assumptions, eroding biodiesel’s core market. Feedstock price volatility might intensify as competing demands from sustainable aviation fuel production, European biodiesel manufacturers, and industrial applications create supply pressures that undermine cost competitiveness. Policy uncertainty or shifts towards favouring other decarbonisation pathways, such as hydrogen for heavy transport or stricter sustainability criteria that disqualify certain feedstocks, could constrain the viable feedstock base further. Additionally, limited investment in UK production capacity due to perceived market risk would perpetuate import dependency just as European suppliers increasingly prioritise their domestic markets and aviation fuel mandates. This scenario recognises that biodiesel exists in an intensely competitive environment where multiple alternatives vie for the same decarbonisation opportunity.

Critical Variables Determining Actual Outcomes

Feedstock Economics and Availability

The practical constraints around feedstock represent perhaps the most critical determinant of biodiesel’s trajectory. Used cooking oil collection in the UK has already been extensively optimised, with most commercial sources captured by existing supply chains. Expanding collection into smaller hospitality venues and household sources offers only marginal volume increases at disproportionate cost. Animal fats from rendering operations similarly face practical limits, with the UK producing finite quantities whilst competing internationally for imports. The double-counting mechanism under the RTFO makes waste feedstocks economically attractive, but this policy advantage simultaneously intensifies competition for limited supplies. When sustainable aviation fuel mandates fully activate, they will compete directly for these same feedstocks, potentially bidding prices beyond levels where road biodiesel remains economically viable without subsidy. Advanced feedstocks from agricultural residues or purpose-grown energy crops could theoretically expand supply, but require significant processing infrastructure investment and face their own sustainability scrutiny regarding land use and lifecycle emissions. The feedstock picture therefore suggests a ceiling on biodiesel growth absent technological breakthroughs or policy interventions that fundamentally alter economics.

The Fleet Composition Question

Biodiesel’s market share ultimately depends on what it is sharing the market with. The passenger diesel fleet is clearly in managed decline, with new registrations falling sharply and the existing fleet aging towards retirement. However, heavy goods vehicles, buses, agricultural machinery, and construction equipment tell a different story. Battery electric solutions for long-haul articulated lorries remain economically and practically challenging, whilst the installed base of diesel equipment in agriculture and construction turns over slowly due to high capital costs and long operational lifespans. If this heavy diesel segment persists longer than electrification advocates expect, biodiesel retains a substantial addressable market even as total fuel volumes decline. Conversely, faster than anticipated progress in electric heavy goods vehicle technology, potentially catalysed by battery advances or policy interventions like electrified motorway infrastructure, would rapidly erode biodiesel’s core demand base. The fleet composition question is essentially about the speed and completeness of transport electrification across different segments.

Regional and Sectoral Variations Within the UK Market

National projections necessarily obscure important regional variations driven by differing economic structures, policy environments, and infrastructure inheritance. Scotland’s substantial agricultural sector and rural geography create different biodiesel demand patterns compared to England’s motorway-centric heavy goods transport. Wales and Northern Ireland face distinct feedstock availability profiles and potentially different policy priorities as devolved administrations exercise their competencies. Production capacity is unevenly distributed, with established facilities concentrated in specific regions whilst others lack domestic supply infrastructure entirely. These regional variations matter for practical planning even if national statistics suggest uniform trends. Similarly, sectoral distinctions prove important. Road transport, non-road mobile machinery, and the emerging sustainable aviation fuel sector involve different feedstock requirements, sustainability criteria, and competitive dynamics. Biodiesel or its derivatives might thrive in agricultural applications whilst losing ground in road transport, or vice versa. Recognising these granular distinctions prevents oversimplified analysis.

Quantitative Projections and Confidence Intervals

Translating qualitative scenarios into quantitative projections requires acknowledging inherent uncertainty whilst providing useful planning parameters. Under the baseline scenario, biodiesel market share likely ranges between 3.8 and 5.2 per cent by 2030, with absolute volumes between 1.4 and 1.8 billion litres annually, down from current levels as the total fuel market contracts. The accelerated scenario suggests 5.5 to 7.5 per cent market share with volumes potentially maintained at 1.6 to 2.0 billion litres if diesel market contraction slows. The constrained scenario points towards 2.3 to 3.5 per cent share with volumes falling to 1.0 to 1.4 billion litres. Confidence in these projections decreases significantly beyond 2028, as compounding uncertainties around policy, technology, and market conditions multiply. The variables introducing greatest uncertainty include heavy vehicle electrification speed, feedstock availability and pricing, policy stability, and competing renewable fuel mandates, particularly for aviation.

Implications for Stakeholders

These scenarios translate into concrete strategic implications across stakeholder groups. Biodiesel producers contemplating capacity investments face a market where moderate growth scenarios justify incremental expansion but transformative investment carries substantial risk. Fleet operators developing fuel strategies should plan for biodiesel availability continuing but not necessarily expanding, making dual-fuel capability or gradual electrification transition more prudent than betting entirely on biodiesel persistence. Policymakers must recognise that current frameworks likely deliver outcomes in the baseline to constrained range unless complemented by targeted interventions around feedstock development or heavy transport decarbonisation. Investors evaluating the sector face an asset class where stable but unspectacular returns seem more probable than high growth, with downside protection depending heavily on policy stability and feedstock security. The overarching message is that biodiesel represents a transitional solution with a clearly defined but time-limited role rather than a long-term growth opportunity. Strategic decisions should therefore emphasise flexibility, risk management, and realistic timeframes rather than ambitious expansion predicated on optimistic assumptions.