The Rising Star of Green Energy: Why Chinese UCO is in High Global Demand
In the midst of the three-year pandemic, while exports of numerous products plummeted, Used Cooking Oil (UCO) defied the trend, achieving an impressive annual export growth rate of over 25%. Even in the challenging year of 2022, UCO exports surged by 39% year-on-year, reaching a record high of 1.58 million tons. Projections indicate exports will exceed 2 million tons in 2023.
What is UCO?
Industrial mixed oil UCO, chemically known as fatty acid triglycerides, is refined from raw materials such as waste restaurant oils (often referred to as "gutter oil") and brine oils. It serves as a crucial feedstock for biodiesel (UCOME, HVO), plasticizers, oleic acid, soaps, detergents, and anti-caking agents. Its English designations include Used Cooking Oil (UCO), Waste Cooking Oil (WCO), Used Oil, or Waste Oil.
Why is Chinese UCO So Popular?
Two primary factors drive its global demand:
Abundant Supply: China's vast population provides extensive sources of waste oil, resulting in production volumes that surpass those of other developing nations.
Superior Carbon Reduction: Its status as a waste-derived feedstock grants it double carbon reduction credits under the EU's Renewable Energy Directive (RED), making it highly sought-after in Europe.
The EU's RED policy, particularly the updated RED II and proposed RED III, mandates increasing the share of renewables in transportation (to 29% by 2030) while progressively phasing out crop-based biofuels. This creates a massive demand for advanced biofuels, for which UCO is a key feedstock.
Notably, biodiesel produced from UCO (UCOME) achieves an 83% greenhouse gas (GHG) emission reduction, far exceeding the EU's 60% minimum requirement. This allows it to count more toward blending mandates, giving it a significant competitive edge. Consequently, EU biodiesel producers are increasingly reliant on imported UCO, a substantial portion of which originates from China. In 2021, 31% of the EU's biodiesel imports came from China.
A Look at the Numbers
Theoretical annual UCO production capacity in China exceeds 8 million tons. In 2022, actual collection reached approximately 3.8 million tons. Of this, over 2 million tons were consumed domestically, while 1.58 million tons were exported to 52 countries and regions. The Netherlands, Spain, and Singapore were the top importers for two consecutive years, with the Netherlands importing 415,000 tons from China in 2022.
Domestically, Shanghai led exports, shipping 599,400 tons and accounting for 38% of the national total.