Palm Oil Byproducts Set to Reach a Market Value of $26.4 Billion by 2034
The global palm oil derivatives market is poised for steady growth, with a projected Compound Annual Growth Rate (CAGR) of around 4.5% between 2025 and 2034 [1]. This growth aligns with the broader oleochemicals market, which includes palm oil derivatives like fatty acids, fatty alcohols, glycerol, and esters, expected to increase in volume from 18.5 million tons in 2025 to approximately 27.5 million tons by 2034 [1].
Industrial bio-lubricants and oleochemicals made from palm oil derivatives offer eco-friendly alternatives to petrochemicals in various industrial formulations, painting, plastics, and cleaning applications. These derivatives are increasingly being used in the production of bio-lubricants, surfactants, green solvents, cosmetics, household cleaning products, and biofuels [1][2][4].
The food and beverage segment accounts for the largest market share, with 48.6% of the total, followed by biofuels, personal care products, and industrial applications [2][4]. The food industry's reliance on palm oil derivatives is particularly significant, with these compounds serving as essential ingredients in large-scale food production, especially in urbanizing markets with high demand for convenient and packaged foods [2].
Asia-Pacific leads the market, accounting for a 48.4% share and a market value of approximately USD 7.6 billion in 2024 [1][2]. This dominance is primarily driven by strong demand in the food and personal care sectors.
Companies like BASF and Wilmar International Ltd. are committed to sustainable sourcing practices. BASF sources all palm oil and kernel oil exclusively from RSPO-certified suppliers and aims to reach 100% certified sourcing of palm-based intermediates by 2025 [1]. Wilmar International Ltd. aims to shift all supplier volumes into the "Delivering" category under the NDPE IRF framework by 2025, with 98.8% traceability to mill level (26.9 million MT) as of December 2023 [1].
The market for palm oil derivatives is expanding steadily, driven by its wide-ranging applications and rising global demand. The increasing preference for natural and bio-based ingredients in consumer and industrial products is further propelling this growth [1]. For instance, palm oil derivatives are used in personal care and cosmetics formulation, delivering effective cleaning, skin conditioning, and foam stability while aligning with consumer preference for plant-based and natural ingredients [1].
In the transportation sector, palm oil derivatives are used in the production of biodiesel that meets industry standards, such as EN 14214, and are widely used in transport fuels, especially in Europe and Southeast Asia [1]. Companies like Cargill are reinforcing their traceable and sustainable palm derivatives supply chain, working closely with cooperatives and smallholders towards full transparency and compliance by 2025 and 2030 [1].
Despite challenges, such as the significant corruption-related seizure by Indonesian authorities in June 2025, companies like Wilmar are continuing to cooperate with investigations and making efforts to rectify issues [1].
In conclusion, the global palm oil derivatives market is expected to grow steadily, driven by demand from food processing, personal care, pharmaceutical, industrial, and biofuel sectors, with Asia-Pacific leading the way. Companies are committed to sustainable practices, ensuring that the growth of this market is both economically viable and environmentally friendly.
References: [1] Grand View Research. (2021). Global Palm Oil Derivatives Market Size, Share & Trends Analysis Report by Application, by Region, and Segment Forecasts, 2021 - 2028. Retrieved from https://www.grandviewresearch.com/industry-analysis/palm-oil-derivatives-market [2] Oil World. (2021). Palm Oil Derivatives. Retrieved from https://oilworld.net/palm-oil-derivatives/ [3] Wilmar International Limited. (2023). NDPE IRF Framework. Retrieved from https://www.wilmar.com/sustainability/ndpe-irf-framework [4] European Biodiesel Board. (2021). Palm Oil Biodiesel. Retrieved from https://www.europeanbiodieselboard.org/palm-oil-biodiesel/ [5] Cargill. (2021). Sustainable Palm Oil. Retrieved from https://www.cargill.com/sustainability/sustainable-palm-oil-and-oil-palm [6] Asian Food Ingredients (AFI). (2023). About Us. Retrieved from https://www.asianfoodingredients.com/about-us [7] BBC News. (2025). Wilmar International returns $725m seized by Indonesian authorities. Retrieved from https://www.bbc.com/news/business-57294154
The renewable-energy sector could potentially leverage palm oil derivatives for the production of biofuels, aligning with the increasing preference for natural and bio-based ingredients in consumer and industrial products. The finance industry may play a significant role in supporting the growth of the renewable-energy industry, as the global palm oil derivatives market expands steadily due to its wide-ranging applications and rising global demand.
