HVO for Data Center Backup Market Size, Share Detailed Report 2026 to 2035

Global HVO for Data Center Backup Market Size is valued at USD 14.3 Mn in 2025 and is predicted to reach USD 41.3 Bn by the year 2035 at a 11.6% CAGR during the forecast period for 2026 to 2035.

HVO for Data Center Backup Market Size, Share & Trends Analysis Distribution by Data Center Type (Hyperscale Data Center, Colocation and Retail, Others), By Feedstock Type (Edible Vegetable Oils, Used Cooking Oil, Tall Oil, Crude Palm Oil, Animal Fats, and Others), By Technology (Standalone Hydrotreating Technology and Co-Processing Technology), By Region and Segment Forecasts, 2026 to 2035

HVO (Hydrotreated Vegetable Oil) is a renewable diesel fuel made from waste oils, fats, and plant-based feedstocks. It works exactly like regular diesel and can be used directly in existing backup generators without any changes. In data centers, HVO powers emergency generators to keep everything running during power outages. It burns much cleaner than normal diesel, cutting carbon emissions by up to 90% over its full lifecycle and producing fewer harmful pollutants. The main reasons data centers are switching to HVO are stricter carbon reduction goals, the huge increase in data center power needs, and the desire for greener backup power without losing reliability.

The HVO for the data centre backup market is steadily increasing as the critical infrastructure sector begins to demonstrate a greater concern for the factors of sustainability, reduced carbon emissions, and guaranteed power availability. Data center facilities are increasingly reliant on HVO as a more sustainable alternative to classic diesel fuels to maintain constant operations in the event of a grid shutdown. Additionally, the power demand is rising substantially because of the higher usage of cloud computing, artificial intelligence, and hyperscale facilities. The rising interest from consumers to enhance the ESG profile and the increasing need to comply with the tightened regulations associated with the current higher concern against pollution are encouraging data center to adopt new fuels such as HVO.

Moreover, the fact that HVO can be integrated easily with the existing diesel generator base without the need for major modifications to the equipment adds to the market's growth. It finds particular applications as a data center backup power source owing to the high storage life, fuel stability, and reliability exhibited by the product when the power goes out. As a result of the support offered by the government in the form of sustainable regulations, the use of renewable fuels has started gaining momentum at a faster pace. However, there are some challenges that the market for HVO for data center backup power sources needs to face, including higher fuel prices compared to conventional diesel oil, along with limited accessibility.

Competitive Landscape

Which are the Leading Players in HVO for the data centre backup market?

• Neste
• Repsol
• TotalEnergies
• Phillips 66 Company
• Eni S.p.A.
• Crown Oil Ltd
• Foster Fuels Inc.
• Certas Energy
• LubiQ HVO Fuels
• Rehlko
• Rolls-Royce plc
• Caterpillar
• Cummins Inc.
• Moteurs Baudouin

Market Dynamics

Driver

Growing Pressure on Data Centers to Lower Their Carbon Impact and Improve Sustainability

The HVO for data center backup market is expanding dramatically due to growing pressure on data centers to lower their carbon impact and improve sustainability. In many areas and nations, the practice of obtaining renewable energy to power data centers is expanding. Data centers account for 1-3% of global energy use, making them among the biggest power consumers. Additionally, the operators of data centers, including Google, Microsoft, Meta (Facebook), and Amazon Web Services, have pledged to reach net-zero carbon emissions. Additionally, the need for cloud computing is driving the development of huge data centers across the globe. The HVO for data center backup market is expanding due to the rising need for enormous amounts of power.

Restrain/Challenge

High Capital Expenditure Needed for Data Center Backup Installation

One of the primary obstacles to the HVO for data center backup market's expansion is the substantial capital expenditure needed for data center backup installation and upkeep. To provide redundancy, large-scale data centers frequently require several high-capacity units, which greatly increases upfront expenses. The total cost of ownership is also increased by continuing maintenance, fuel costs, and compliance testing. These costs may be prohibitive for small and medium-sized businesses. Additionally, the requirement for qualified specialists and ongoing oversight raises operating expenses even more. Sustaining the HVO for data center backup market growth requires addressing these cost-related issues through service-based models, fuel-efficient technology, and modular designs.

Colocation and Retail Segment is Expected to Drive the HVO for Data Center Backup Market

The Colocation and Retail category held the largest share in the HVO for Data Center Backup market in 2025 since data centers need dependable and sustainable power solutions to run continuously. This rise is being driven by the increasing demand across industries for high-performance computing, cloud computing, and data storage. Furthermore, the efficiency and sustainability of backup power solutions are being improved by developments in HVO technologies, energy storage options, and power management systems, making them perfect for retail data centers and colocation.

The Edible Vegetable Oils Segment is Growing at the Highest Rate in the HVO for Data Center Backup Market

In 2025, the Edible Vegetable Oils category dominated the HVO for Data Center Backup market propelled by the growing emphasis on low-carbon and sustainable fuel substitutes for vital power applications. HVO made from edible vegetable oils like soybean, rapeseed, and palm oil offers a cleaner-burning alternative to traditional diesel, and data center operators are under increasing pressure to lower carbon emissions while maintaining a steady power supply. These oils make it possible to produce high-quality HVO with superior combustion qualities, a lower sulfur content, and fewer emissions of particulate matter and NOx, which makes them appropriate for data center backup generator systems.

Why North America Led the HVO for Data Center Backup Market?

The HVO for Data Center Backup market was dominated by North America region in 2025 due to the quick growth of colocation and hyperscale data centers, as well as the growing focus on carbon reduction and sustainability. Hydrotreated vegetable oil (HVO) is becoming more popular as a greener substitute for traditional diesel fuel in backup generators since data centers need highly dependable backup power solutions to guarantee continuous operations.

Additionally, data center operators are being encouraged to switch to HVO-based backup systems by strict environmental regulations, corporate net-zero promises, and growing pressure from investors and consumers to adopt low-emission energy solutions.

Key Development

• January 2025: Neste has established a partnership with the Italian gasoline distributor Firmin to introduce Neste MY Renewable Diesel (HVO100) in the Italian market, aiming to reduce greenhouse gas emissions in the transportation sector. This collaboration provides Italian enterprises with a sustainable alternative to fossil diesel and enhances Neste's market presence in Europe. Neste MY Renewable Diesel, composed completely of renewable resources, can reduce greenhouse gas emissions by up to 90% without necessitating new vehicle fleets or changes. 
  

HVO for Data Center Backup Market Report Scope :