The global co-refining market is undergoing a significant transformation as nations and industries pivot toward cleaner energy alternatives. Valued at US$ 39.7 Bn in 2023, the market is poised for substantial growth, expected to expand at a CAGR of 6.0% from 2024 to 2034, reaching US$ 73.0 Bn by 2034. This surge is primarily fueled by global efforts to decarbonize the energy sector, rising adoption of biofuels, and technological advancements in petroleum refining processes.
What Is Co-refining?
Co-refining, or co-processing, refers to the integration of renewable or alternative feedstocks—such as biomass, used cooking oil, animal fats, vegetable oils, and waste plastics—with traditional crude oil in existing refineries. These hybrid feedstocks are refined to produce transportation fuels and petrochemical intermediates, helping to reduce dependence on fossil fuels and lower greenhouse gas (GHG) emissions.
Processes involved in co-refining include:
- Hydroprocessing (ideal for bio-crude upgrades)
- Catalytic Cracking (commonly used for aviation fuels)
- Fluid Catalytic Cracking (FCC) (used for gasoline and olefinic gases)
- Hydrotreating and Hydrocracking (for removing contaminants and enhancing fuel yields)
Key Growth Drivers
1. Low-carbon Economy Push
The global movement toward a net-zero emissions future is encouraging refiners to adopt co-refining techniques. With road transport oil demand expected to peak before 2030, largely due to the rise of electric vehicles (EVs), traditional fossil refineries are under pressure to adapt. Co-refining allows refineries to continue operations while contributing to emission reduction targets.
Investments in renewable hydrogen, sustainable biofuels, and Carbon Capture and Storage (CCS) technologies are reshaping the industry. For instance, in May 2024, the European Commission awarded nearly €720 Mn to seven renewable hydrogen projects. Similarly, the U.S. Department of Energy (DOE) committed US$ 7 Bn to hydrogen hubs across the U.S.
2. Biofuel Adoption Rising
The rise in biofuel integration is another major factor propelling the market. Biofuels are particularly suited to decarbonize hard-to-electrify transport sectors like aviation and shipping. According to the International Energy Agency (IEA), 2022 marked a decade-high in biofuel capacity additions, reaching 260 kb/d.
Petroleum refineries already possess the necessary infrastructure to process bio-based materials. Co-refining thus presents a cost-effective, scalable pathway to increase Sustainable Aviation Fuel (SAF) and Hydrogenated Vegetable Oil (HVO) production without building new facilities.
Regional Outlook: Europe Leads the Charge
Europe dominated the co-refining market in 2023, driven by climate goals and biofuel production mandates. The EU-27 recorded around 16 million tons of oil equivalent (Mtoe) of biofuels in 2020, representing 6.3% of total transport fuel consumption, according to IEA data.
Furthermore, Europe is a hub of innovation in CCS. The COREu project led by SINTEF—the largest CCS-focused R&I project under Horizon Europe—reflects the region’s commitment to accelerating low-carbon refining solutions.
Market Segmentation Snapshot
By Feedstock Type:
- Crude Oil Co-refining
- Biomass Co-refining
- Waste Plastic Co-refining
- Renewable Feedstock Co-refining
By Process:
- Hydroprocessing
- Catalytic Cracking
- Fluid Catalytic Cracking (FCC)
- Hydrotreating
- Hydrocracking
By Product:
- FAME Biodiesel
- Bioethanol
- Hydrogenated Vegetable Oil (HVO)
- Others
Key Players & Developments
Top companies in the co-refining landscape include:
- Bharat Petroleum Corporation Limited
- China National Petroleum Corporation
- ExxonMobil Corporation
- Saudi Aramco
- Valero Energy Corporation
- Marathon Petroleum Corporation
- ROSNEFT
- Petroleos de Venezuela S.A.
Recent developments include:
- Meridian Energy Group (U.S.) plans to co-process up to 4,000 barrels/day of vegetable oil at its North Dakota refinery.
- In 2023, SATORP (a Saudi Aramco–TotalEnergies JV) successfully produced SAF using used cooking oil (UCO) at its 460,000 b/d Jubail refinery.
Analyst Viewpoint
Co-refining is emerging as a practical, scalable solution for refineries looking to remain relevant in a decarbonizing world. As regulatory pressure mounts and carbon pricing mechanisms tighten, integrating renewable feedstocks into existing infrastructure offers both cost advantages and environmental benefits.
From reducing lifecycle GHG emissions to enabling compliance with renewable fuel standards, co-refining is positioned at the crossroads of sustainability and refinery innovation. It also aligns with international climate commitments such as the Paris Agreement and supports regional efforts to achieve net-zero emissions by 2050.
Final Thoughts
The future of the co-refining market is increasingly being shaped by sustainability, policy support, and the rapid evolution of bio-based feedstocks. As the industry advances toward 2034, expect more collaborative ventures, policy-driven funding, and technological enhancements to accelerate this transition.
Refineries that invest early in co-refining capabilities are likely to benefit not only from regulatory compliance and ESG alignment but also from long-term profitability and market leadership in a greener economy.
