Canada Diesel Fuel Market Size To Reach $32.62 Billion By 2033

Canada Diesel Fuel Market Growth & Trends

The Canada diesel fuel market size is projected to reach USD 32.62 billion by 2033, expanding at a CAGR of 1.4% from 2025 to 2033, according to industry analysis. Market growth is driven by the steady demand from the transportation, mining, construction, and agricultural sectors, which continue to rely heavily on diesel for high-power, long-distance, and off-grid operations. Canada’s vast geography and dependence on freight logistics make diesel an essential energy source for road transport and heavy machinery. In addition, the government’s ongoing infrastructure development, combined with industrial growth in provinces such as Alberta, Ontario, and British Columbia, is expected to sustain diesel consumption across commercial and industrial applications. The rising adoption of ultra-low-sulfur diesel (ULSD) and renewable diesel blends, as mandated by the Clean Fuel Regulations (CFR), further underscores the market’s transition toward cleaner and more sustainable energy solutions.

Major refiners and distributors, including Suncor Energy Inc. (Petro-Canada), Imperial Oil Ltd. (Esso), and Shell Canada Ltd., are investing heavily in refining modernization and the integration of renewable fuels to meet evolving environmental standards. Advancements in refining technologies, such as co-processing renewable feedstocks and hydrodesulfurization, are improving fuel quality while reducing greenhouse gas emissions. The continued use of diesel in heavy-duty trucks, marine vessels, and remote power generation ensures stable market demand despite the gradual shift toward electrification in light-duty transportation. Moreover, the rise in biodiesel and renewable diesel production, supported by government incentives and provincial mandates, is creating new opportunities for the adoption of cleaner fuels and enhancing domestic energy resilience.

Furthermore, the Canadian market is benefiting from the growing participation of regional and international players, who are expanding their refining and distribution networks to strengthen nationwide supply chains. Companies such as Parkland Corporation, Irving Oil Ltd., and Gibson Energy Inc. are enhancing storage, blending, and retail capabilities to ensure consistent availability across provinces. Innovations in fuel additives, digital distribution management, and logistics optimization are improving operational efficiency and minimizing costs for end-users. As Canada continues to balance economic growth with environmental commitments, the market is expected to maintain steady momentum through 2033, driven by industrial demand, technological upgrades, and the gradual integration of low-carbon diesel alternatives into the nation’s energy mix.

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Canada Diesel Fuel Market Report Highlights

• By product, petroleum diesel held the highest market share of 87.4% in 2024, owing to its extensive use across Canada’s transportation, industrial, and commercial sectors. Despite the gradual rise of biodiesel and renewable diesel alternatives, petroleum-based diesel remains the dominant fuel due to its established distribution network, high energy density, and compatibility with existing diesel engines. Its widespread availability through major refiners and retailers ensures a consistent supply for long-haul freight, public transport, and off-road machinery operations across provinces.

• Based on application, the automotive segment held the highest market share in 2024, driven by the heavy reliance on diesel-powered vehicles for logistics, freight transportation, and agricultural machinery. Canada’s large-scale trucking and transit sectors depend on diesel for cost-efficient, long-distance mobility, especially in regions with limited access to electrification infrastructure. The sustained demand from fleet operators, coupled with government support for the adoption of cleaner, ultra-low sulfur diesel, continues to strengthen diesel’s position in the country’s automotive energy mix.

• Canada’s diesel demand is being pulled up by heavy-duty transport and resource industries. Trucking and freight - the backbone of Canada’s long-haul logistics across vast distances and cross-border trade with the U.S. - remain overwhelmingly diesel-powered, and rising freight volumes translate directly into more diesel consumption. At the same time, energy-intensive sectors such as oil & gas (notably oilsands operations), mining and large-scale construction continue to rely on diesel for mobile and stationary power because of its energy density, fuel-supply logistics in remote locations, and the availability of high-torque equipment built around diesel engines. These sectors often see project-driven spikes in diesel use tied to commodity cycles and infrastructure spending

Canada Diesel Fuel Market Segmentation

Grand View Research has segmented the Canada diesel fuel market report based on product, and application:

Canada Diesel Fuel Product Outlook (Volume, Billion Gallon; Revenue, USD Billion, 2021 - 2033)

• Petroleum Diesel

• Biodiesel (B5, B10, B20, B100)

• Renewable Diesel

Canada Diesel Fuel Application Outlook (Volume, Billion Gallon; Revenue, USD Billion, 2021 - 2033)

• Automotive

• Construction

• Mining

• Agriculture

• Others

List of Key Players in Canada Diesel Fuel Market

• Canadian Clean Fuels Corporation

• Cenovus Energy Inc.

• Gibson Energy Inc.

• Greenergy Canada

• Husky Energy (Cenovus Energy)

• Imperial Oil Ltd. (Esso)

• Irving Oil Ltd.

• Parkland Corporation

• Shell Canada Ltd.

• Suncor Energy Inc. (Petro-Canada)