Hydrotreated Vegetable Oil (HVO) for data center backup refers to the use of renewable biofuels as a sustainable alternative to diesel generators in providing uninterrupted backup power to data centers. Unlike conventional fossil fuels, HVO is produced from waste oils and vegetable fats, offering lower greenhouse gas emissions while maintaining high energy efficiency.
It matters because modern data centers, critical for cloud computing, AI, big data, and digital services require reliable and sustainable power backup. With increasing focus on reducing carbon footprints, HVO-based backup solutions allow operators to meet energy demands while aligning with global sustainability goals.
According to BIS Research, HVO for data center backup market was valued at $11,694.6 thousand in 2024 and expected to reach $38,161.6 thousand by 2034 at a CAGR of 10.51%.
• Sustainability Mandates: Growing regulations and ESG commitments are accelerating the transition toward renewable energy solutions.
• Rising Data Center Demand: Expansion of hyperscale and colocation facilities fuels the need for reliable, green backup power.
• Technological Advancements: Improved HVO production processes and advanced energy storage systems boost efficiency and reliability.
• Corporate Net-Zero Goals: Enterprises are adopting low-carbon fuels to meet carbon neutrality targets.
• Cost-Effectiveness in the Long Run: Despite higher upfront costs, HVO reduces emissions penalties and aligns with renewable incentives.?
• High Initial Costs: HVO fuels and compatible generators can be more expensive than conventional diesel.
• Supply Chain Constraints: Limited large-scale availability of HVO across regions may affect adoption speed.
• Energy Density Considerations: While effective, HVO’s energy performance can vary based on feedstock quality.
• Market Awareness: Many operators still view diesel as the default backup solution.
• Regulatory Variation: Differences in renewable fuel policies across geographies complicate deployment.
By Data Center Type
• Colocation and Retail
• Hyperscale Data Center
• Others
By Data Center Type
• Edible Vegetable Oils
• Crude Palm Oil
• Used Cooking Oil
• Tall Oil
• Animal Fats
• Others
By Technology Type
• Standalone Hydrotreating Technology
• Co-Processing Technology
By Region
• North America
• Europe
• Asia-Pacific
• Rest-of-the-World
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The market will continue to see strong adoption as operators seek to balance sustainability and reliability. Colocation and retail facilities will dominate adoption due to rapid cloud and enterprise outsourcing. Europe is expected to lead growth, supported by stringent carbon reduction regulations and aggressive renewable adoption.
Looking ahead, integration of HVO with hybrid systems (fuel cells, battery storage, renewable energy) will emerge as a key trend. Companies investing in R&D for advanced biofuel blends and scalable HVO supply chains will gain a competitive edge.
-BIS Research Analyst Team
The market is expected to grow at a CAGR of 10.51% from 2025–2034.
Key leaders include Neste, Rapsol, TotalEnergies, Phillips 66, ENI S.p.A., Kohler, Rolls Royce, Cummins, Caterpillar, and Crown Oil.
Technologies in demand include
• Advanced HVO production technologies
• Energy storage integration for backup systems
• Fuel-efficient generator technologies
• Smart power management solutions
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