Published 5th July, 2024
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Leading global used cooking oil (UCO) producer China, will run out of waste oil due to demand from Europe and the USA outstripping supply, according to a report by clean transport campaign group Transport & Environment (T&E).
Conducted by Stratas Advisors on behalf of T&E, the study found that China exports more than half of its UCO capacity to Europe and the USA.
In addition, UCO demand from the aviation sector was due to triple by 2030 to meet sustainable aviation targets, the 18 June report said.
Against this backdrop, T&E called for curbs to be introduced on allegedly fraudulent UCO imports.
According to the report, Europe consumes 130,000 barrels/day (bpd) of UCO – eight times more than it collects.
In the USA, consumption totalled more than 40,000 bpd following the introduction of Biden’s Inflation Reduction Act (IRA), the report said.
To fill the supply gap, both Europe and the USA were importing increasing shipments of UCO from China, as well as from Indonesia and Malaysia, T&E said.
With demand from the aviation sector also expected to increase, UCO demand is outstripping volumes available for collection, according to the report.
“Europe simply cannot collect enough UCO to fly its planes. Ryanair’s targets for 2030 alone would need all of Europe’s UCO, while all the UCO in China won’t be enough to decarbonise the continent’s airlines, cars and trucks either,” T&E biofuels campaigner Cian Delaney said.
“UCO is not a silver bullet and can only play a limited role in decarbonising the transport sector. Europe needs to stop shipping waste oil across the world and limit itself to what it can collect at home.”
Global demand for UCO is set to spike as SAF targets come into force, according to the report.
Worldwide SAF targets in 2030 would require at least twice the UCO that could be collected in the USA, Europe and China combined, the study found.
The report also showed further evidence of allegedly fraudulent UCO supplies in China.
While China’s collection capacity appears to correspond to export levels, a huge illegal gutter oil market means the country is likely to be consuming significant volumes of UCO domestically, according to the report.
Malaysia, a major palm oil producer, exported three times more UCO than it collected domestically, the data showed.
The bulk of this volume passed through the Netherlands or was shipped via the UK, a country with one of the highest SAF target, T&E said.
According to Stratas’ data, UCO collection in Asia is around 30% cheaper than in Europe.
As a result, the oversupply of Chinese biodiesel drove European Union (EU) biofuels market prices down in 2023, the report said.
The EU has the potential to collect twice as much UCO as current levels, according to the report.
Allegedly fraudulent UCO and UCO biodiesel could be entering Europe due to a combination of self-declarations and a lack of effective testing of raw materials arriving at biofuel production sites, Stratas said.
T&E called for Europe to move away from independent, industry-led voluntary schemes towards stricter EU and national government regulation and controls.
The campaign group also called for governments to stop counting imported UCO in sustainability targets.