India is ramping up biodiesel production but is facing a shortage of raw materials

India’s biodiesel production is forecast to increase by 15% in 2026 to 640 mln litres, up from 556 mln litres a year earlier. According to USDA, biodiesel consumption is expected to grow even faster, rising by around 18% from 475 mln to 560 mln litres.

However, feedstock shortages remain the main constraint on further industry expansion. India produces biodiesel from animal fats, non-edible vegetable oils and used cooking oil (UCO), while also using imported palm oil and palm stearin. Despite record UCO consumption, opportunities to expand collection remain limited.

Feedstock shortages are also keeping capacity utilisation low. India has around 2 bln litres of annual biodiesel production capacity, but only about one-third is currently being utilised. Biodiesel blending is expected to remain below 1% in 2026, well short of the country’s 5% target for 2030.

Despite domestic constraints, India could significantly increase biodiesel exports. USDA forecasts shipments at 110 mln litres in 2026, up from 76 mln litres a year earlier. Additional demand is expected from the EU as it seeks to offset lower biodiesel imports from Argentina.

At the same time, India is developing sustainable aviation fuel (SAF) production, which can also use UCO as a feedstock. The country plans to introduce a 1% SAF blending requirement for international flights from 2027 and increase it to 5% by 2030. Further expansion of biodiesel and SAF production is expected to increase India’s demand for available oil-based feedstocks.

Tags: India, biodiesel