Global Used Cooking Oil Market 2024-2031

Used Cooking Oil Market Size, Share & Trends Analysis Report by Source (Household Sector, and Commercial Sector), and by Application (Biodiesel, Oleo, Chemicals, and Animal Feed), Forecast Period (2024-2031)

Used cooking oil market is anticipated to grow at a CAGR of 3.5% during the forecast period (2024-2021). Used cooking oil is the oil collected from households and commercial restaurants post-usage in cooking or frying food. The market growth is attributed to the growing demand for biodiesel, the expansion of the food service industry, and the growth of the animal feed industry among others. Further, the market is expected to be influenced by government initiatives and incentive programs, an increasing number of collection programs, and the expansion of the circular economy.

Market Dynamics

Government Regulations and Incentives

The ongoing efforts by state-run organizations to promote the use and incorporation of used cooking oil in the economy are key factors driving the global market. Several countries globally are implementing regulations or imposing policies alongside offering incentives to increase the use of sustainable oils. Such as blending regulations require the blending of biodiesel with conventional diesel fuel among others. The efforts are aimed at reducing carbon emissions and increasing the share of sustainable processes and fuels in the economy. For instance, in September 2023, the European Parliament approved a new regulation to expand the use of sustainable fuels in aviation, such as advanced biofuels or hydrogen. The RefuelEU aviation standards are part of the EU's "Fit for 55 packages," which aims to reduce greenhouse gas emissions by at least 55.0% by 2030 compared to 1990 levels and ensure the EU is climate neutral by 2050. It aims to encourage the aviation industry to use sustainable fuels to reduce emissions. The term 'sustainable aviation fuels' will include synthetic fuels, certain biofuels derived from agriculture or forestry wastes, algae, bio-waste, used cooking oil, and certain animal fats.

Growth in the Animal Feed Industry

The increasing demand for used cooking oil from the animal feed industry further contributes to the market growth. Recycled cooking oil is processed and used as an ingredient in animal feed through refinement and blending with other ingredients to create a nutritious feed supplement for livestock and poultry. Further, the growing demand for livestock feed, especially in regions with extensive agricultural activities, is expected to benefit the universal cooking oil market. For instance, according to the International Feed Industry Federation, world compound feed production is estimated to be just over one billion tons annually. Global commercial feed manufacturing generates an estimated annual turnover of over $400.0 billion. Additionally, the United Nations Food and Agriculture Organization (FAO) estimates that by 2050, the demand for food will grow by 60.0% and that between 2010 and 2050, the production of animal proteins is expected to grow by around 1.7% per year, with meat production projected to rise by nearly 70.0%, aquaculture by 90.0%, and dairy by 55.0%.

Segmental Outlook

• Based on the source, the market is segmented into the household sector, and commercial sector.
• Based on application, the market is segmented into biodiesel, oleo, chemicals, and animal feed.

Commercial Sector Is the Most Prominent Used Cooking Oil Source

The commercial sector is the dominant source for the procurement of used cooking oil owing to the higher volume of used cooking oil collection, regulatory compliances for waste reduction, increasing tie-ups to promote a circular economy, and the monitoring benefits of supplying used cooking oil to processing companies. For instance, in October 2021, Neste and Hesburger, a Finnish restaurant chain, formed an important circular economy relationship. Used cooking oil from over 300 Hesburger restaurants in Finland and the Baltics will be repurposed to create renewable diesel. Hesburger will utilize Neste MY Renewable DieselTM in its Finnish transport vehicles.

Biodiesel is the Biggest Application Segment

Biodiesel remains the biggest application for used cooking oil owing to increasing demand for sustainable fuel alternatives, substantial support from state-run organizations to promote biodiesel, and regulatory requirements to reduce carbon emissions to achieve emission reduction targets.

Regional Outlook

The global used cooking oil market is further segmented based on geography including North America (the US, and Canada), Europe (the UK, Italy, Spain, Germany, France, and the Rest of Europe), Asia-Pacific (India, China, Japan, South Korea, and Rest of Asia-Pacific), and the Rest of the World (the Middle East & Africa, and Latin America).

North America Holds Highest Share in Used Cooking Oil Market

North America is predicted to dominate the used cooking oil market in the future owing to the ongoing increase in consumption of biofuels in the region, rising efforts by regional governments to promote a circular economy and optimize waste management, an increasing number of food service restaurants, regional emission reduction targets, and the presence of major used cooking oil collection and processing companies such as ABP Food Group (Olleco) and Baker Commodities Inc., among others. For instance, U.S. Department of Agriculture (USDA) Secretary Tom Vilsack stated that the USDA intends to invest up to $500 million from President Biden's Inflation Reduction Act to enhance the availability of domestic biofuels and provide Americans with more clean fuel options at the pump.

Asia-pacific is the Fastest Growing Used Cooking Oil Market

• Asian countries such as China, India, and Myanmar are increasingly investing in reducing carbon emissions caused by rapid industrialization, creating scope for increasing demand for biodiesel production through used cooking oil.
• The Asia-Pacific region is also recording an increase in the number of commercial restaurants, for which it is expected to impose policies and regulations to promote waste management and circular economy initiatives

Market Players Outlook

The major companies serving the global used cooking oil market include ABP Food Group (Olleco), Baker Commodities Inc., and Changsha Stin Uco Renewable Energy Co., Ltd. among others. The market players are focusing on capitalizing on growth by adopting strategies such as collaboration, partnerships, and market expansion among others. For instance, in October 2022, Bunge, a prominent producer of plant-based oils, and Olleco, ABP Food Group's renewables subsidiary, announced a 50/50 joint venture to develop a business that covers the entire life cycle of edible oils. The joint venture is anticipated to deliver oils to food service and food manufacturing customers across Europe (except the United Kingdom and Ireland) while also ensuring that used cooking oil is efficiently collected and used as a feedstock in renewable fuel manufacturing. The solutions and services to be provided will help address environmental and energy security problems in important European markets.