Used Cooking Oil Market Size & Share Analysis - Growth Trends And Forecast (2025 - 2030)

Global Used Cooking Oil Market Trends and Insights

Increasing Demand for Sustainable Energy Sources and Bio-based Diesel Production

The transition toward renewable energy sources is fundamentally reshaping Used Cooking Oil (UCO) demand dynamics, with renewable diesel production capacity in the United States surpassing biodiesel capacity for the first time in 2023, reaching 3 billion gallons annually^{[1]Source: eia U.S. Energy Information Administration, "In 2023, U.S. renewable diesel production capacity surpassed biodiesel production capacity," eia.gov}. Renewable diesel offers significant operational advantages over biodiesel, as it functions as a direct replacement for petroleum diesel without requiring infrastructure modifications or facing blend limitations. The European Union's REPowerEU initiative supports this transition by establishing a 42.5% renewable energy target for 2030, creating sustained demand for UCO as a preferred feedstock due to its double-counting status under the Renewable Energy Directive. Technological advancements in processing methods have improved efficiency, with integrated catalytic cracking and hydrotreating processes achieving 90% oxygen removal while reducing hydrogen usage by 30% compared to traditional methods. The convergence of regulatory mandates and technological improvements positions UCO as a critical transitional feedstock in renewable energy production, particularly as virgin oil prices remain elevated due to food security concerns and land use restrictions.

Growing Aviation Sector Demand for Sustainable Aviation Fuel

The International Civil Aviation Organization's Carbon Offsetting and Reduction Scheme for International Aviation is driving unprecedented global demand for Used Cooking Oil (UCO)-derived sustainable aviation fuel (SAF)^{[2]Source: International Civil Aviation Organization (ICAO), "SAF rules of thumb," www.icao.int}. The European Union's ReFuelEU Aviation regulation mandates 2% SAF blending by 2025, progressively increasing to 70% by 2050. UCO-based SAF receives preferential treatment and priority consideration due to its waste-derived nature and superior lifecycle carbon intensity performance in decarbonization efforts. Neste has expanded its Singapore refinery to a significant capacity of 2.6 million tons, specifically targeting SAF production. The facility processes more than 90% waste and residue streams, including UCO, establishing itself as the largest renewable diesel and SAF production facility globally. UCO feedstock demonstrates substantial economic advantages in SAF production due to lower procurement costs compared to virgin oils. According to a comprehensive ICAO analysis, UCO-based SAF consistently achieves minimum selling prices 15-20% lower than crop-based alternatives when incorporating carbon credit values. However, the market faces emerging supply limitations as aviation fuel demand increasingly competes with existing biodiesel applications. These feedstock allocation constraints may significantly impact the industry's ability to meet ambitious SAF production targets and scaling objectives.

Price Competitiveness of UCO Compared to Virgin Oils

The global renewable fuels industry prioritizes sustainability, resulting in notable price differences between waste-based and virgin oil feedstocks. Government regulations and policies in major markets provide financial incentives for low-carbon intensity inputs. In global renewable fuel markets, biofuels from waste oils and animal fats command higher prices than those from virgin oil crops like soybean and rapeseed. The Honeywell UOP Report indicates that European markets offer a premium of USD 400-600 per metric ton for renewable diesel made from sustainable, double-counting eligible feedstocks compared to crop-based oils. In California, renewable diesel produced from used cooking oil receives additional incentives of USD 0.75-0.90 per gallon (approximately USD 250-300 per metric ton) over virgin soybean oil^{[3]Source: Honeywell UOP, "Feedstock Price vs Biofuel Price – Where to Invest your Project Capital," uop.honeywell.com}. The favorable pricing for used cooking oil (UCO), driven by policy incentives and carbon reduction targets, encourages increased investments and expansion of collection infrastructure. This strengthens UCO's global competitiveness against virgin oils and reinforces its importance in expanding sustainable biofuel production.

Expansion of Biofuel Production Facilities

The global expansion of biofuel production facilities, driven by sustainable energy initiatives and carbon reduction goals worldwide, has significantly increased the demand for used cooking oil (UCO). The continuous growth in the number and capacity of these facilities across key regions has created strong and consistent demand for UCO, leading to enhanced collection systems and improved supply chain efficiency throughout the market. According to the United States Department of Agriculture (USDA) Foreign Agricultural Service's Global Agricultural Information Network (GAIN) 2024 report, China's biodiesel production capacity has increased substantially to 4 billion liters (1.06 billion gallons) across 48 plants, compared to 3.5 billion liters across 46 plants in 2022. This significant expansion demonstrates the increasing focus on renewable fuel production to meet climate targets, further supporting the sustained growth of the UCO market.

Collection and Consumption Gaps in the Used Cooking Oil Market

The UCO market faces a fundamental challenge in bridging the gap between theoretical availability and actual collection rates, with substantial volumes remaining uncollected across global markets. The United States demonstrates this challenge through its growing dependence on UCO imports, which increased from 13% of total feedstock in 2020/21 to 29% in 2023/24, indicating domestic collection inefficiencies despite abundant generation sources^{[4]Source: US Department of Agriculture "Major exporting countries increasing exports of raw materials for U.S. production of biomass-based diesel fuels," ers.usda.gov}. Small-scale generators, including household kitchens and independent restaurants, remain underserved due to volume thresholds and logistics constraints that make collection economically unfeasible, resulting in continued disposal through traditional waste channels. The EPA's stricter record-keeping requirements for biofuel producers have created additional compliance challenges for independent collectors, driving market consolidation and reducing collection network coverage for smaller generators. While IoT-enabled collection monitoring and blockchain-based traceability systems offer potential solutions, the required capital investment and operational adjustments exceed the economic capabilities of many collection operators. The disparity in collection infrastructure between urban and rural areas creates supply imbalances, with higher collection rates in urban centers limiting market expansion in regions with dispersed generation sources.

Concerns Regarding Quality and Certification

Quality assurance and certification requirements create significant challenges for UCO market participants due to increasingly complex regulatory frameworks. The ISCC certification system mandates comprehensive chain-of-custody documentation, while ISCC EU 203 standards require detailed tracking of material flows from collection through processing. Quality control challenges include contamination risks from improper storage, handling, and transportation, which can affect entire batches. This necessitates continuous monitoring of moisture content, free fatty acid levels, and impurity concentrations throughout the supply chain. The industry has responded with various fraud prevention measures, including Darling Ingredients' DarLinQ technology for real-time UCO monitoring. However, these solutions increase operational complexity and costs for market participants. Smaller collectors and processors face greater compliance challenges, as certification requirements favor larger, integrated operations with established quality assurance capabilities and laboratory testing facilities. While blockchain-based verification systems and digital twin technologies offer potential solutions for supply chain transparency and product authentication, high implementation costs and technical complexity limit their widespread adoption.

Segment Analysis

By Source: HoReCa Dominance Drives Collection Efficiency

The HoReCa (Hotels, Restaurants, and Cafes) segment maintains a commanding 64.57% market share in 2024, primarily attributed to the operational advantages of centralized collection from high-volume generators with predictable oil turnover patterns. Commercial kitchens consistently generate higher-quality used cooking oil (UCO) through standardized cooking processes and shorter storage periods, which effectively minimizes contamination risks and processing complications that typically plague household collection efforts. The household kitchens segment demonstrates the highest growth trajectory at 8.92% CAGR through 2030 but encounters substantial challenges, including collection logistics, quality variability, and economic viability thresholds that fundamentally limit expansion potential. 

Food processing plants contribute steady volumes through their industrial-scale operations, though their market share remains constrained by internal reuse applications and direct sales to established buyers. This segment's growth remains intrinsically tied to food industry expansion and regulatory pressures to divert waste from landfills, with circular economy mandates creating additional incentives for UCO recovery. While emerging technologies,s including IoT-enabled collection monitoring and digital supply chain management systems are beginning to address household collection challenges, their widespread adoption necessitates significant infrastructure investment and behavioral changes among individual generators.

Note: Segment shares of all individual segments available upon report purchase

By End Use: Biodiesel Applications Anchor Market Demand

Biodiesel and HVO applications dominate UCO utilization at 79.35% market share in 2024, driven by regulatory mandates and the superior performance characteristics of renewable diesel as a drop-in petroleum substitute. The segment benefits from established processing infrastructure and favorable economics, with renewable diesel production capacity surpassing biodiesel capacity in the United States for the first time in 2023, reaching 3 billion gallons annually. Oleo-chemicals represent the fastest-growing application at 8.32% CAGR through 2030, reflecting the chemical industry's transition toward bio-based feedstocks and circular economy principles mandated by emerging regulations. 

Animal feed applications continue to face declining demand due to food safety regulations and increasing consumer preferences for plant-based alternatives. In contrast, the Others category, including cosmetics and industrial applications, maintains steady growth through specialty product development. The shift toward higher-value applications is evident in processing technology investments, with advanced hydrotreating catalysts enabling the production of premium-grade renewable diesel and sustainable aviation fuel that command significant price premiums over traditional biodiesel. Co-processing technologies that blend UCO with petroleum streams in existing refineries offer capital-efficient expansion pathways, though they require careful optimization to manage impurities and maintain product specifications.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

Europe holds a dominant 38.28% market share in 2024, supported by comprehensive regulatory frameworks, well-developed collection systems, and sophisticated processing infrastructure. The European Union's Renewable Energy Directive II provides consistent market drivers through 2030. The region's emphasis on waste-based biofuels and circular economy requirements creates favorable conditions for UCO utilization. However, domestic collection capacity limitations are becoming increasingly apparent as demand continues to exceed supply capabilities. 

Asia-Pacific demonstrates the highest growth rate at 8.79% CAGR through 2030, functioning as both a primary UCO supplier and a growing consumer market. China's exports reached 2.951 million metric tons in 2024, underlining the region's supply importance. Indonesia's B40 biodiesel program, initiated in January 2025, marks a significant shift toward domestic UCO usage, with 15.6 million kiloliters of biodiesel allocation driving substantial feedstock requirements that could fundamentally alter regional trade patterns. Singapore strengthens its position as a processing center through Neste's 2.6 million tons capacity expansion, serving as an essential connection between regional UCO supply and global renewable fuel markets. 

North America continues stable growth through renewable fuel standard requirements and state-level clean fuel initiatives, while South America and Middle East and Africa present developing opportunities, though these remain limited by underdeveloped collection infrastructure and regulatory frameworks. The geographic distribution of processing facilities increasingly reflects feedstock availability patterns, with port-based operations becoming more prevalent due to their strategic access to imported UCO supplies and enhanced ability to optimize logistics expenses across the supply chain.