Used cooking oil (UCO) market is predicted to reach USD 15.12 billion at a CAGR of 6.30% during the forecast period

Market Research Future (MRFR) has published on the “Global Used Cooking Oil Market”.

Used Cooking Oil Market Hightlights

Used cooking oil is used for cooking or frying food or the new dish, in the household, food processing industry, restaurants, fast food outlets, and others. The most common oils that are used are vegetable oils, corn oil, canola oil, olive oil, palm oil, etc. and animal fats in other words the used cooking oil is termed as waste vegetable oil that is developed after repeated application for cooking in household and commercial sectors. As the used cooking oil is considered waste, the continuous innovations made by the manufacturers and multinational corporations have surged its application in various other sectors that mainly includes, biofuel, animal feed, composting, soaps, lamp oil, paint remover, shampoo and moisturizer, car cleaning material, furniture, and appliance material.

Moreover, if an individual compare the fresh oil, with used cooking oil it is mainly darker in tone and has a distinct smell. Though the used cooking oil could be reused for frying multiple times, it is essential to keep quality by removing impurities and cleaning it between uses. Owing to its ability to be converted into biodiesel, it is usually used as a sustainable source of energy.

Market Synopsis

According to the MRFR analysis, the global Used Cooking Oil market is projected to reach USD 15.12 Billion by 2032 at a CAGR of 6.30%.

The change in climate conditions and increasing challenges associated with the management of greenhouse gases in the atmosphere has rung the bell in the mind of people across the globe. Increasing urbanization, the rapid surge in the population, and mounting pollution across the globe are the major factors that have created an imbalance in the management of atmospheric greenhouse gases. The green economy is mainly aided by various policies and regulations that have been adopted and imposed by the governments and the regulatory authorities operating in developed as well as developing nations around the world.  These are the major factors driving the demand for renewable and sustainable sources of energy. Rendering to the data published by the International Energy Agency, in 2021, the demand for biofuels such as petrol, diesel, and other petroleum products has touched the volume of 155,400 million liters. The increasing concern regarding health and the environment has significantly driven the demand for biofuel as it does not cause any negative impact on the environment.

Besides that, these days consumers as well as regulatory bodies along with government organizations both are focusing on the creation of “Best from the Waste”. The used cooking oil or the waste edible oil are being utilized to produce biofuels as it is an alternative source of fuel. Biofuel such as biodiesel is a sustainable and renewable product unlike fossil fuels and can be prepared domestically. According to the United States Environmental Protection Agency, restaurants and hotels in the US produce a huge amount of used cooking oil which is 3 billion gallons per year. The growing focus on waste management among the population has increased the demand for used cooking oil to produce biofuels such as petrol and diesel, lubricants, toiletries, and personal care products. Moreover, the increasing awareness and environmental-friendly properties of used cooking oil-based products are fuelling the growth. In addition, the growing availability of used cooking oils from hotels, restaurants, and cafes’ is also influencing the market positively and is anticipated to grow during the forecast years.

COVID-19 Impact on Used Cooking Oil Market

The incidence of COVID-19 negatively hampered the supply chain in a significant way across industries and sectors around the world. The imposition of nationwide lockdowns and the closure of international borders across the globe led to the closure of the industries associated with food service. Though the food service regained its momentum owing to the establishment of delivery systems, the supply chain associated with food service still got obstructed substantially. That further hampered the used cooking oil industry, the industry observed a steep fall in the past two years. Although, the increasing awareness regarding biofuels and surging preference for sustainable, and cleaner energy sources, has uplifted the used cooking oil industry. It is mainly due to the reinstallation of the food service sectors and the revival of the production facility associated with edible oil, these are the major factors that uplifted the demand for used cooking oil in the post-pandemic situation.

In the past few years, the government and regulatory bodies associated with the used cooking oil have incorporated several policies and initiatives around the world to support clean energy and biodiesel. For instance, the government of India has introduced Repurposed Used Cooking Oil (RUCO) app to collect used cooking oil across the country.

Competitive Landscape

The global Used Cooking Oil market is fragmented and consists of some organized and unorganized industry players. To outperform competitors, manufacturers primarily concentrate on increasing production capabilities, launching new products regularly, and working with important stakeholders. Key players are Darling Ingredients Inc., Veolia, Olleco, Baker Commodities Inc., Arrow Oils Ltd, Argent Energy, Waste Oil Recyclers, Inc., Grand Natural Inc., and Greasecycle.

Segmentation

By Source

• Food Manufacturers: Food manufacturers include large-scale food manufacturers that use oil as a key ingredient in its product and small-scale manufacturers that has a large quantity of oil as part of their production process. The repeated use of oil which has been used for cooking results in the development and formation of total polar compounds (TPC) that are averse to the health of the consumer. Scientific research studies suggest that the reuse and repeated use of cooking oil in the food industry are responsible for the surge in the trans-fat content in fried food products. Further, the cooking oil that is reheated multiple times used in the products makes it rancid and initiates the production of free radicals.


• HoReCa: The government regulation and restriction on the reuse of cooking oil for food preparations across the globe along with increasing initiatives to boost awareness regarding the application of used cooking oil in preparation for biodiesel and oleochemicals are supporting the growth of the segment positively over the years. For instance, the National Agriculture Research Organization of Uganda has launched a campaign on educating restaurants and hotel owners along with the public about the use of cooking oil potential in biodiesel manufacturing. In addition, the proper recycling of used cooking oil by directing it to trade with biodiesel and used cooking oil buyers helps the HoReCa players in claiming Zero Food Waste status which in turn helps in boosting the sales. Thus, contributing to the growth of the segment further during the forecast period.


• Household: The household segment generates a relatively lesser used cooking oil quantity per household unit compared to food manufacturers and HoReCa players. The collection of used cooking oil from the household is quite difficult in terms of arranging appropriate logistics and the awareness regarding the economic value of the used cooking oil is quite low compared to the other two major sources food manufacturers and HoReCa. This limited awareness of the economic potential of used cooking oil is evident by the statistics that around 52% of the household in the European Union just discard it in the garbage while another 21% of the household tend to flush it in the sewage.


• Others: The other segment comprises the used cooking oil generated from fast food centers, supermarkets, hypermarkets, grocery stores, and convenience stores, the fast-food centers are one of the commercial units that tend to use large quantities of oil for the preparation of various products offered in its menu. The increasing food quality standards and regulations are pushing such units to redirect the used cooking oil away from repeated use in food preparations to safe disposal without causing any environmental pollution. To overcome the issue, fast food centers are selling UCO. Supermarkets, hypermarkets, convenience stores, and grocery stores use oil for cooking their freshly prepared food item offerings. The players in the global used cooking oil market are engaged in creating dedicated systems for scheduling and collecting the UCO from such stores. The increasing incorporation of prepared foods in grocery store offerings is anticipated to positively impact the growth of the segment as a source of UCO in the global market.

By Application

• Biodiesel: The US has set a target of reducing emissions by 65% by 2032 and has aimed to achieve net-zero emissions by 2050 and Indonesia has set a target of reducing emissions by around 43.2% by 2032 with the aid of support from international organizations. As part of these initiatives, biodiesel is considered a potential source for achieving the carbon emissions target. Scientific studies suggest that the use of 30% of UCO with 70% diesel results in an emission reduction of 24% of the overall emissions in the energy sector. In addition to this, the increasing fuel prices demand for biodiesel in the global market.


• Oleochemical Products: Oleochemical products are the set of consumer and industrial goods that are produced majorly using oleochemicals, the chemicals that are majorly derived from sustainable resources like animal fat, used cooking oil, etc. Animal fat has been one of the key oleochemical sources that are widely used in the production of products like lubricants, soaps, shampoos, cosmetics, candles, polymers, plastics, solvents, building materials, resins, and other biomaterials. Owing to the heating of oil at relatively higher temperatures in the food industry, the used cooking oil gets degraded and must be purified & retreated before its use as feedstock in the oleochemicals. Though the multiple re-heating decreases the edible property of the oil, it does contain fatty acids, triglycerides, and partial glycerides which makes it a suitable option for use as a second-generation feedstock in the oleochemical products production.


• Animal Feed: Animal feed manufacturing companies use used cooking oil as an ingredient in animal feed manufacturing as a source of high-energy supplements. The property of high density and binding ability of the used cooking oil comes off as an advantage in its use in animal feed. In addition, the relatively low cost of the UCO makes it a suitable choice for use as a high-energy ingredient that helps in increasing the livestock’s weight and supports overall growth & development. However, the use of UCO that are generated from the production of animal meat products is restricted or banned in EU countries as they pose a risk of causing various diseases including swine fever, mad cow disease (BSE), avian influenza, etc.


• Others: Other segments comprise the use of used cooking oil in the household lamp oil, pharmaceutical industry, and reuse in the unorganized food sector. As the collection of UCO from households is still at the nascent stage in many parts of the world, they are generally discarded as waste, while the habit of DIY from waste is redirecting its use as fuel for lamps. The application of UCO in pharmaceutical is relatively limited and are used after proper retreatment as bisabolene. Though globally the food safety authorities have restricted the reuse of used cooking oil, still the trade of used cooking oil to roadside eateries and small food shops is common.

By Region

• North America: An initiative in the US in line with climate mitigation is the Renewable Fuel Standard policy which requires the incorporation of bio-based renewable fuels in addition to the conventional fuel production of the manufacturers. Biodiesel is categorized as one of the advanced biofuels under the reduced fuel standard policy. This has resulted in strong demand for low-carbon feedstock including used cooking oil marked by the total annual import of around 530,000 barrels of UCO in the US in 2022. Thus, the government’s increasing focus on climate mitigation strategies and incentivization of biofuel including biodiesel is expected to create more lucrative opportunities for the manufacturers in the region during 2022-2032.


• Europe: Used cooking oil is one of the major components of biodiesel that are manufactured using waste materials and has substituted crop-based feedstocks for biofuels that are intended for the use of sustainable fuel in the aviation sector. Germany's government is also taking several initiatives to collect different used cooking oil from all sources to curb greenhouse gases emission effectively. EU has banned the use of UCO in the production of food products that are intended for animal and human consumption. Though the ban has restricted the growth of its use in animal feed, it has redirected its use towards feedstock in biodiesel marked by the growth of its use as feedstock by 360% in 2016 from 2011.


• Asia-Pacific: India is another high-potential market for the UCO in the region with an estimated annual UCO generation of 220 crore liters. This is attributed to the extensive use of oil in the food culture of Indian cuisine starting from breakfast to dinner where oil is a key ingredient. Like the China UCO redirection to gutter oil, a significantly large share of UCO turns out to be gutter oil. Food Safety and Standards Authority of India’s initiative named Repurpose Used Cooking Oil is aiming to redirect the UCO to use in biodiesel and restrict its traction to the gutter oil market. Further, the target of blending 5% of biodiesel in a diesel by 2032 under the National Policy on Biofuels 2018 is energizing the growth of the biodiesel market which in turn is driving the demand for the used cooking oil market. In addition, Zomato, an online food service platform has collaborated with BioD Energy to convert the used cooking oil generated by restaurants and hotels to biodiesel at a rate of 1000 lakh liters of UCO per month.


• Rest of the World: The rest of the world comprises regions including South America, the Middle East, and Africa. Brazilian Association of Vegetable Oil Industries estimates that the used cooking oil only contributes to 1.2% of the total raw materials used in biodiesel production in 2020. A survey conducted by the Brazilian startup, Óleoponto has highlighted that roughly 40% of the people in the household segment are not aware of the collection centers that are dedicated to used cooking oil disposal whereas the remaining respondents are not even aware of the recycling possibilities of used cooking oil. The limited awareness of the UCO application in reusing and recycling might hamper the growth pace of the region.