The global used cooking oil market size was valued at USD 7.5 billion in 2023 and is projected to reach USD 11.1 billion by 2032, registering a CAGR of 4.5% during the forecast period (2024-2032). The widespread use of spent cooking oil in various applications, including biodiesel, oleochemical products, animal feed, and others, will likely drive the Used Cooking Oil market growth over the forecast period.
"Used cooking oil" refers to any liquid, room temperature (68 degrees Fahrenheit), vegetable, or animal-based oil created while cooking or frying. Water and food crumbs could be included in used cooking oil. Cooking oil scraps are not seen in brown grease. Used cooking oil, also known as waste cooking oil, is produced due to the frequent use of vegetable oils for meals in restaurants, hotels, the food industry, and domestic sectors. The used cooking oil is often marketed in large quantities with various components and can be made from different vegetable oils, including sunflower, palm, rapeseed, soya, and others. Instead of using vegetable oil, cooking oil generates biodiesel, oleochemicals, and animal feed. Used cooking is considered waste, and no competitors are on the market. As a result, it is more readily available and less expensive than vegetable oil.
Grease, polyurethane products, bio-lubricants, hydrogen gas, and other products can all be made from cooking oil. Most lubricants available are petroleum-based. About 80–90% of the production cost is high because virgin oil is used as a raw material to make bio-lubricants produced from these virgin oils. Used cooking oil is a common bio-lubricant source because of its low price, wide availability, and lack of environmental impact. Grease also serves various purposes in machines since it lowers friction between machine mechanical components. On the other hand, grease is non-biodegradable and mainly derived from raw materials with a petroleum foundation. Making grease from used cooking oil is an eco-friendly and sustainable solution that lessens environmental worries.
Highlights
Many countries have adopted renewable fuel standards or mandates requiring a particular percentage of biofuels blended with conventional fossil fuels. These policies are intended to minimize greenhouse gas emissions, improve energy security, and encourage using renewable resources. Used cooking oil is considered a valuable feedstock for biodiesel manufacturing, contributing to meeting these mandates. The Renewable Fuel Standard (RFS) program in the United States requires incorporating renewable fuels, such as biodiesel, into transportation fuels. The Environmental Protection Agency (EPA) establishes yearly volume targets for renewable fuels, supporting using various feedstocks, such as recycled cooking oil, to reach these goals.
Similarly, the European Union (EU) has established ambitious targets for increasing the use of renewable energy in the transportation industry. The Renewable Energy Directive (RED) requires member nations to use at least 14% renewable energy in transportation by 2030. Biodiesel, notably made from spent cooking oil, is critical in achieving these goals.
Furthermore, governments offer financial incentives, tax credits, and subsidies to encourage the development and use of biofuels, increasing demand for feedstocks such as spent cooking oil. These incentives make biodiesel production economically viable and appealing to producers. Brazil's National Program of Production and Use of Biodiesel (PNPB) offers tax breaks and incentives to biodiesel producers. The program's goal is to promote the use of biodiesel in the country's energy mix while supporting rural development and decreasing environmental effects. The initiative accepts used cooking oil as a feedstock for biodiesel manufacturing.
The manufacturing of biodiesel from spent cooking oil is subject to various national, regional, and worldwide regulatory norms. These laws protect the quality, safety, and sustainability of biofuels and their feedstocks. Compliance with these laws may present issues for market participants and impact the cost-effectiveness of biodiesel generation from wasted cooking oil. The EU's biodiesel output, fatty acid methyl esters (FAME), was predicted to rise marginally, with lower FAME production offset by higher hydrogenation-derived renewable diesel (HDRD) production.
However, due to environmental concerns, the EU will limit using soybean and palm oil as feedstocks for biodiesel production in 2023. This decision was taken sooner than the anticipated 2030 phase-out date due to the link between these crops and deforestation. The restriction has elicited conflicting reactions from industry and non-governmental organizations, as the global food crisis has made it more difficult to source alternative oils such as rapeseed and sunflower.
In addition, certification schemes like the Roundtable on Sustainable Biomaterials (RSB), the International Sustainability and Carbon Certification (ISCC), and others provide biofuel producers voluntary certification to demonstrate compliance with sustainability standards and best practices. Certification requires extensive auditing, documentation, and verification processes, which can be time-consuming and expensive for biodiesel manufacturers. Biodiesel manufacturers in the United States can apply for certification under the RFS2 (Renewable Fuel Standard) Quality Assurance Program to qualify for Renewable Identification Numbers (RINs) and other incentives. The program demands that biofuels and their feedstocks, including spent cooking oil, meet quality guidelines, reporting requirements, and sustainability objectives. Producers must undertake third-party audits and keep thorough records to demonstrate compliance with RFS2 rules.
Governments worldwide are introducing various incentives and policies to encourage the collection and recycling of used cooking oil (UCO) for biodiesel generation. These policies seek to advance renewable energy targets, reduce greenhouse gas emissions, and encourage environmentally friendly waste management methods. The United States government grants a federal biodiesel tax credit of USD 1 per gallon for biodiesel generated from renewable feedstocks, which includes spent cooking oil. As of January 2023, the tax credit for biodiesel blends is 5 cents per gallon for blends B11 to B20, 7 cents per gallon for blends B20 to B29, and 10 cents per gallon for blends B30 or higher. This tax incentive greatly lowers production costs, making biodiesel more competitive. It also promotes the collection and recycling of wasted cooking oils.
Furthermore, China has passed the Circular Economy Promotion Law, which promotes the recycling and reuse of waste resources such as wasted cooking oil. This law promotes the collecting and converting of waste cooking oil into biodiesel and other products, thereby advancing the circular economy. China's biodiesel production is predicted to reach 3.3 billion litres in 2023, a 36% increase over 2022, with a large amount coming from spent cooking oil. This is owing to a spike in exports, primarily to the EU, which increased by 70% yearly between January and May 2023.
Similarly, the International Energy Agency (IEA) estimates that biofuel production, including biodiesel, will increase by 25% during the next five years. Government regulations and incentives are important in this expansion, particularly supporting sustainable feedstocks such as recycled cooking oil.
| Study Period | 2020-2032 | CAGR | 4.5% |
| Historical Period | 2020-2022 | Forecast Period | 2024-2032 |
| Base Year | 2023 | Base Year Market Size | USD 7.5 billion |
| Forecast Year | 2032 | Forecast Year Market Size | USD 11.1 billion |
| Largest Market | North America | Fastest Growing Market | Europe |
The global used cooking oil market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.
North America is the most significant global cooking oil market shareholder and is estimated to exhibit a CAGR of 4.1% over the forecast period. In North America, there will likely be a rise in the demand for vegetable oils. It is likely attributed to the rising demand for alternative fuels in the transportation sector and the rising usage of premium edible oils for cooking regular meals. In North American nations like the U.S., there has been an increase in demand for environmentally benign and renewable fuels. It can be attributed to escalating environmental concerns, the fluctuating price of oil, and American energy regulations. In 2023, the United States had a biodiesel production capacity of 2.1 billion gallons per year, down slightly from 2022. However, renewable biodiesel and other biofuel output overtook biodiesel production for the first time in 2023, totaling 3 billion gallons per year. This tripled production between 2021 and 2023, whereas biodiesel capacity decreased by 13%.
However, the United States produces more second-generation biofuels, such as biodiesel. Since used cooking oil is less expensive than vegetable oil, increased biodiesel manufacture is anticipated to lower production costs. The cooking industry in this area is expected to increase significantly due to this fact.
Europe is anticipated to exhibit a CAGR of 4% over the forecast period. The most significant biofuel in Europe is biodiesel, which accounts for around 75% of the market for transport-related biofuels. A 2023 research shows Europe's biodiesel production capacity is 19.32 billion liters. The USDA Foreign Agricultural Service also indicated that biodiesel use in the European Union was predicted to rise by nearly 2% in 2023, thanks to the second Renewable Energy Directive (REDII). In Europe, biodiesel is manufactured on a massive scale. Currently, about 120 facilities in Europe produce 11,000,000 tons of biodiesel annually. These plants can be found in Germany, Italy, Austria, France, and Sweden, among other nations. Europe is the primary region contributing to expanding the spent cooking oil market. This results from increased environmental awareness and government regulation supporting it.
Additionally, one of the significant factors fueling the expansion of the used cooking oil market in this region is promoting the use and production of renewable energy sources through the Renewable Energy Directive and the Fuel Quality Directive in Europe. Additionally, over the past five years, the manufacture of biodiesel from spent cooking oil for transportation has increased dramatically in European nations like the U.K. Used cooking oil provides about 89% of the feedstock needed to make biodiesel for transportation. This, in turn, encourages the market for leftover cooking oil to expand.
Asia-Pacific has emerged as one of the fastest-growing regions in the global market. Due to its rapid industrialization and urbanization, which make up about 60% of the global population, Asia-Pacific has the fastest-growing energy demand in the world. Most of the Asia-Pacific region's nations are fossil fuel-dependent and are currently working to increase the production of renewable energy sources to satisfy the rising demand. Due to the Asia-Pacific energy consumption surge, government attention is focused on generating renewable energy, particularly biodiesel.
In the Middle East and Africa, and Latin America (LAMEA), biodiesel and bioethanol production has increased dramatically in Latin America in the last few decades. Brazil, Colombia, Paraguay, Argentina, and Costa Rica produce the most biofuel in this region. Brazil is one of the leading producers of biodiesel. Thus, the demand for alternative feedstocks is expanding. As more countries use waste cooking oil to make biodiesel, Brazil promotes its use. On March 17, 2023, Brazil raised the current biodiesel tariff from 10% to 12%, starting April 1. The Brazilian National Council for Energy Policy (CNPE) made the decision. The CNPE has voted to boost the biofuel mandate to 13% in 2024, 14% in 2025, and 15% in 2026. On the other hand, Argentina is expanding its renewable energy sources as part of its commitment to lowering greenhouse gas emissions. Such activities will likely boost biodiesel production in Argentina, increasing the demand for used cooking oil over the forecast period.
Additionally, South Africa's biodiesel manufacturing is encouraged by the rise in interest in generating alternative and renewable energy. However, the main issue facing the biodiesel manufacturers in this area is the severe lack of feedstock (virgin oil) for biodiesel production. Due to its low cost and ease of availability compared to other feedstock, spent cooking oil is predicted to present growth potential for usage as a feedstock in biodiesel in this region.
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The global used cooking oil market is segmented based on product, form, application, and end-user.
Based on the source, the global cooking oil market is bifurcated into household and commercial sectors.
The commercial sector segment dominates the global market and is projected to exhibit a CAGR of 4.2% over the forecast period. Restaurants, lodging facilities, caterers, and other commercial sectors are examples. This industry occupies the most significant portion of the market. This is because these industries are typically major suppliers of spent cooking oil. Expanding the hospitality and food service sectors leads to a massive global production of spent cooking oil, which suppliers collect in large quantities.
Additionally, the efforts made by the providers of used cooking oil to ensure an organized collection of used cooking oil and the provision of containers to restaurants for used cooking oil collection aid in expanding the used cooking oil market. As an illustration, the restaurant aggregator and food delivery business Zomato has made steps to collect leftover cooking oil from different eateries in India and turn it into biodiesel. The used cooking oil business is growing because of Zomato's initiative.
The household sector of the worldwide used cooking oil market collects and recycles used cooking oil from individual houses. In this section, cooking oil is commonly used for everyday food preparation, such as frying and sautéing. After the oil is used, it frequently becomes waste, which can be collected and recycled.
Based on application, the global used cooking oil market is segmented into Bio Diesel, Oleo Chemicals, Animal Feed, and Others.
The bio-diesel segment dominates the global market and is predicted to exhibit a CAGR of 4% during the forecast period. Due to an increase in population and changes in consumer lifestyles worldwide, there has been an increase in global energy consumption. As a result, the Government has been compelled to concentrate on developing sustainable, alternative, and renewable energy sources, such as biodiesel, a clean, environmentally friendly, and effective form of renewable energy. It is derived from feedstocks such as leftover cooking oil, animal fat, and vegetable oil. Compared to fuel made from fossil fuels, renewable fuel is more affordable, biodegradable, and abundant. It benefits from lower sulfate and hydrocarbon emissions and lower environmental pollution.
Soybean, rapeseed, leftover cooking, and other pure or waste vegetable oils can fuel biodiesel. Contrary to vegetable oil, manufacturing biodiesel from spent cooking oil is more affordable. This is because spent cooking oil is more readily available and less expensive than vegetable oil, encouraging biodiesel producers to use it as a primary feedstock. This, in turn, enables the market for leftover cooking oil to expand. Additionally, there is an increase in the manufacturing of biodiesel from leftover cooking oil because it uses 96% less energy than conventional diesel and saves 21% compared to crude oil. Cooking oil is now more often employed in manufacturing biodiesel due to the popularity of used cooking oil among biodiesel producers.
Oleochemicals are compounds formed from fats and oils, including leftover cooking oil. These compounds are used in various goods, including soaps, detergents, lubricants, and cosmetics. UCO is converted into oleochemicals by processes such as hydrolysis and saponification. The usage of UCO in this industry provides a sustainable and cost-effective alternative to virgin oils, thereby decreasing environmental impact and encouraging the circular economy.
