The global market is expected to record a CAGR of 7.8% from 2009 to 2014.

Increasing environmental concerns and the need for energy independence have led to the biodiesel market. Despite the economic recession, global biodiesel production totaled 5.1 billion gallons in 2009, representing a 17.9pc increase over 2008 levels.

The biodiesel market is expected to grow from $8.6 billion in 2009 to $12.6 billion in 2014. Market growth is primarily dependent on the availability, quality, and yield of feedstock, as it accounts for 65pc to 70pc of the cost of biodiesel production.

Biodiesel derived from rapeseed oil forms the largest segment of the overall market. Germany is the single largest producer of biodiesel with 2.8 million tonnes produced in 2008.

The biodiesel market also offers immense opportunities to countries such as the UK, India, and China, as these regions have high diesel fuel prices and a large number of diesel-fuelled vehicles.

While growth may be affected by feedstock availability issues and the food versus fuel debate, the market is expected to witness a paradigm shift with the increasing conversion efficiency of existing feedstock, and the development of newer feedstock sources such as algae, the report notes.

Transportation forms the main application market for biodiesel, with automotives accounting for 70% of the global biodiesel production.

As the use of conventional fuel for transport purposes is increasing greenhouse gas emissions at an alarming rate, governments across the globe have begun providing incentives for green energy.

Europe is currently the world’s largest biodiesel market; and is expected to be worth $7.0 billion by 2014 with a CAGR of 8.4% from 2009 to 2014. The growth of the European biodiesel market is driven mainly by governmental initiatives.