China UCO Exports Reach Record High in 2024 -February ,03,2025

China's exports of used cooking oil (UCO) surged to an all-time high of 2.951 million metric tons (mt) in 2024, representing a 43.49% year-on-year increase. The rise in exports was driven by growing demand from the United States, the European Union, and Singapore, despite rising prices and regulatory uncertainties. 

This surge in UCO exports has notable implications for the biofuels market, particularly as global renewable fuel policies continue to evolve, shaping the competitive landscape between waste-based and crop-based biofuels.

Key Market Highlights

• United States as Leading Importer: The US imported 1.267 million mt of UCO from China, a 51.94% increase from 2023, accounting for 42.93% of total Chinese UCO exports. The rise was primarily due to California's Low Carbon Fuel Standard (LCFS), which provided incentives for renewable biodiesel derived from waste feedstocks. However, new guidance on the 45Z clean fuel tax credit could impact demand, as imported UCO may no longer qualify for tax benefits.
• EU Market Demand and Tariffs: The EU was the second-largest buyer, importing 737,000 mt, a 39.39% increase from 2023. The Netherlands, Spain, and Belgium accounted for over 90% of these purchases. Demand was driven by the EU’s push for sustainable aviation fuel (SAF) and the imposition of antidumping duties of up to 36.4% on cheaper Chinese biodiesel imports in August 2024.
• Sustainable Aviation Fuel (SAF) Policy Impact: The EU mandates at least 2% SAF at airports starting in 2025, requiring an estimated 3 million mt of UCO annually. China has positioned itself as a strategic supplier to meet this demand while introducing an export quota for B24 biodiesel-blended marine fuel in 2025 to support local producers affected by EU tariffs.
• Singapore's UCO Demand Growth: Singapore imported 737,000 mt in 2024, marking a 55.61% increase from 2023. The key driver was Neste’s expanded biodiesel and SAF refinery, following an operational outage in 2023.

Market Dynamics and Price Trends

Despite prices reaching a two-year high, global UCO demand remains resilient. Platts assessed UCO FOB North Asia at $1,015/mt as of January 31, 2024. 

The sustained demand is influencing the broader renewable fuel supply chain, affecting feedstock procurement and blending economics for biofuels, including biodiesel and ethanol. The increasing reliance on waste-based feedstocks is altering global biofuel trade flows, as regulatory frameworks evolve to prioritize carbon intensity reductions and sustainability.

The competition for feedstocks has also introduced price volatility, particularly as UCO-based fuels gain policy-driven advantages over traditional biofuels such as bio-ethanol. With the EU and US emphasizing waste-derived alternatives, agricultural-based fuels are facing shifts in market demand. This dynamic is likely to impact procurement strategies for refiners and blenders, requiring adjustments to long-term sourcing and production planning.

Outlook and Strategic Considerations

• Potential US Market Disruptions: If imported UCO loses tax incentives under the 45Z credit, Chinese exporters may shift focus to other markets such as the EU and Singapore.
• China’s Biofuel Strategy for the EU: To counter the impact of EU antidumping tariffs, China is expanding its role as a SAF feedstock supplier, ensuring consistent UCO availability to meet growing aviation fuel mandates.
• Expanding SAF Production Capacity: With the EU requiring 50,000 mt of SAF by 2025, the need for UCO as a feedstock will remain strong, potentially leading to further price increases.
• Impact on Feedstock Economics: Rising demand for UCO is reshaping global biofuel supply chains, influencing price differentials between waste-based and crop-based biofuels and requiring refiners to reassess blending strategies.

Conclusion

The shift in policy and regulatory frameworks toward waste-derived fuels is influencing supply-demand balances, pricing structures, and investment flows within the biofuels sector. 

While demand from key markets remains robust, evolving policies and pricing trends will shape future trade patterns. Stakeholders in the biofuels industry should closely monitor policy shifts and market developments to optimize procurement strategies and hedge against regulatory risks.

GrainFuel Nexus® will continue to provide real-time updates as new trends emerge.

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