With the soaring global energy prices and the push for carbon neutrality policies, the Chinese-termed restaurant kitchen waste “gutter oil,” also known as Used Cooking Oil (UCO), has become a crucial raw material for biofuel production, dubbed as “liquid gold.” These waste oils from kitchens, after recycling and refining, can be transformed into biodiesel or sustainable aviation fuel (SAF), leading to a rapid escalation in market value.
Americans aren’t looking to consume China’s gutter oil; rather, they aim to utilize it in the production of a new type of biofuel – renewable diesel. The acquisition price for gutter oil ranges from $0.25 to $0.60 per gallon, but once refined into biodiesel, its market price can reach $4 to $5 per gallon. According to US energy conservation and emission reduction policies, biofuels produced from gutter oil exhibit a higher carbon emission reduction efficiency compared to vegetable oil substitutes, with the potential to achieve up to 85% carbon dioxide reduction, making it a highly sought-after commodity in the biofuel market.
Gutter oil (UCO), due to its low carbon footprint, has become an ideal choice for renewable diesel production, and can also be used in the production of sustainable aviation fuel (SAF). Consequently, there has been a significant surge in demand for UCO in the US, leading to a notable increase in import volume. In 2023, the amount of UCO imported from China to the US reached a record level, driven primarily by the rising demand for biofuel production and incentives for carbon reduction in transportation.
According to Reuters, the surging demand for gutter oil in the US has transformed the nation from a net exporter to a net importer. In 2023, the US import volume exceeded 1.36 million tons, a substantial increase from around 400,000 tons in 2022, with 60% originating from China.
Customs data reveals that in 2022, Chinese gutter oil accounted for only 0.1% of US imports, yet by the first half of 2023, it constituted sixty percent of the total import volume. With the EU imposing tariffs on Chinese biodiesel products, exporters from China have shifted their trade focus towards the US market. However, following the November presidential elections, there could be significant changes in US trade policies, introducing uncertainties for Chinese UCO exporters.