Recent market analyses indicate that the European market for renewable diesel (HVO) could gain significant momentum in the coming years. Policy decisions in Germany, in particular, are seen as a key driver of this development. By adopting an ambitious greenhouse gas reduction quota pathway and clear requirements for sustainable fuels, Europe’s largest fuel market is sending strong signals to HVO producers and investors.
The transposition of the EU Renewable Energy Directive (RED III) into national law is pushing demand for renewable fuels beyond previous expectations – and HVO is right at the forefront. Analysts expect HVO demand in 2026 to exceed indirect demand for blending into sustainable aviation fuel (SAF). One key reason is that HVO can be used directly in existing diesel engines, enabling immediate CO₂ reductions. In addition, HVO offers significant technical advantages, as outlined on efuel-today.com/hvo.
Germany, along with the Netherlands, Italy and France, has already begun translating RED III targets into national legislation, providing the market with greater planning certainty. This not only strengthens demand but also creates an environment in which investments in HVO production, logistics and distribution can be implemented more quickly.
Against this backdrop, renewable diesel fuels are no longer on the sidelines of the energy transition. Instead, they are becoming a central element of Europe’s strategy to reduce emissions in the transport sector in a pragmatic and near-term manner.
Source: S&P Global Commodity Insights
Image: © eFUEL-TODAY
