An Industry on the Rise
The global biodiesel market reached approximately $38 billion in 2024 and is projected to grow at a compound annual growth rate (CAGR) of 6.4% through 2032. This growth is being driven by tightening emissions regulations, expanding renewable fuel mandates, and increasing corporate demand for verifiable carbon reduction solutions.
For the MENA region — and the UAE in particular — this global trend creates both opportunity and urgency. As international markets mature, the region’s biofuel sector must scale to meet growing demand while maintaining the quality and certification standards that international buyers require.
Key Global Trends Shaping the Market
Several interconnected trends are defining the biodiesel landscape in 2026. Renewable fuel mandates continue to expand globally. The EU’s Renewable Energy Directive III (RED III) has increased targets for renewable energy in transport, with waste-derived biofuels receiving particularly favourable treatment under the framework. In the United States, the clean fuels industry strengthened its foundation in 2025 behind record policy targets, new engine capabilities, and proven performance, setting expectations for continued growth in 2026.
The convergence of biodiesel with sustainable aviation fuel (SAF) production is another defining trend. UCO — the same feedstock used for road-going biodiesel — is the primary feedstock for SAF production. As airlines face increasing mandates to incorporate SAF into their fuel mix, competition for certified UCO feedstock is intensifying globally.
Corporate ESG commitments are driving demand from the private sector. Major logistics companies such as DHL have agreed to use thousands of metric tonnes of UCOME (UCO methyl ester) second-generation biofuel for container shipping, demonstrating that corporate procurement is becoming a significant demand driver independent of government mandates.
The MENA Market: Small but Strategic
The Middle East and Africa biodiesel market is comparatively small relative to Europe, the Americas, and Asia-Pacific. However, industry analysts note that the region’s biofuel demand is anticipated to increase significantly due to the growing popularity of sustainable feedstocks and the deployment of pilot and commercial-scale production projects, with the UAE leading the way.
The UAE’s strategic advantages include its position as a major aviation hub generating demand for SAF, its location on key maritime shipping routes supporting biofuel bunkering demand, its established UCO collection infrastructure and certified production facilities, and its regulatory framework through the National Policy on Biofuels. Neutral Fuels produces over 40 million litres of biodiesel annually at our UAE facilities, all certified to EN 14214, ASTM D6751, and UAE.S 5023 standards. This production capacity, combined with our ISCC-certified UCO collection network, positions the UAE as a credible supplier for both regional and international markets.
Feedstock Competition Is Intensifying
As biodiesel and SAF demand grows, access to certified, waste-derived feedstock is becoming the critical bottleneck. Global demand for UCO is projected to triple by 2030, driven primarily by SAF requirements. This means the UCO collection infrastructure being built today will determine which regions can participate in the biofuel economy of the future.
For businesses in the UAE generating used cooking oil, this shift has practical implications. Your waste oil is becoming an increasingly valuable commodity in a tightening global market. Ensuring it enters a certified, traceable supply chain — rather than being disposed of through informal or unregulated channels — maximises both its environmental impact and its economic value.
What This Means for UAE Businesses
The global market trajectory validates the investments the UAE has made in biofuel infrastructure. But staying competitive requires continued focus on three areas: scaling UCO collection to meet growing feedstock demand, maintaining the certification and traceability standards that international markets require, and developing SAF and marine biofuel production capacity alongside existing biodiesel operations.
For food service operators, fleet managers, and industrial businesses in the UAE, the pathway to participation is straightforward. Partner with Neutral Fuels for UCO collection or transition your fleet to certified biodiesel to contribute to — and benefit from — the growing global biofuel market.
