Used Cooking Oil Market Size, Share & COVID-19 Impact Analysis, By Source (Food Services and Households), Applications (Industrial Usage, Animal Feed, and Others), and Regional Forecast, 2021-2028

The global used cooking oil market size was USD 5.16 billion in 2020 and is projected to grow from USD 5.97 billion in 2021 to USD 10.08 billion in 2028 at a CAGR of 7.76% during the 2021-2028 period. North America dominated the global market with a share of 42.82% in the year 2020.

The global impact of COVID-19 has been unprecedented and staggering, with used cooking oil witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market registered a decline of -12.46% in 2020 as compared to the average year-on-year growth during 2017-2019. The sudden decline in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

The global Used Cooking Oil (UCO) market will grow considerably due to rising awareness of sustainable energy resources and environmental conservation. Recent advancements in technologies that are used to process waste cooking oil into high-quality refined oil will emerge in favour of the growth of the overall market. The rapidly evolving food and foodservice industry that involves novel preparations directly impacted the overall production of UCO. Increasing government initiatives to promote UCO utilization for industrial purposes are expected to drive the growth of the used cooking oil market in the foreseeable years.

USED COOKING OIL MARKET TRENDS

Utilization of Sustainable & Green Energy to Tackle Environmental Issues to Fuel Product Demand

The increasing population, rapid urbanization, and increasing pollution across the world have created several issues related to climate change, greenhouse gas emissions, and other environmental issues. Governments across several countries and a few leading energy & fuel companies are adopting policies that support the green economy. Biodiesel manufactured from used edible oil is an emerging category in the green energy space. In recent years, consumer preference has shifted from petroleum diesel to biodiesel due to its environmental welfare counterparts. Furthermore, the growing awareness regarding food wastage among consumers and stringent safety regulations associated with the product contribute to the increased availability of used edible oil for fuel production.

COVID-19 IMPACT

The COVID-19 Pandemic Significantly Reduced the Supply of Used Oil as a Raw Material for Other Industries to Impede Industry Progress

The recent coronavirus outbreak has disrupted the global supply chain associated with used cooking oil. The nationwide lockdowns in almost all countries have led to the shutdown of the food service industry, which has significantly reduced the supply to the UCO processing companies. The recycling of waste cooking oil

 experienced a sudden slump due to the limited product supply and manpower scarcity. The impact on the food service industry mirrors the impact on the global market. The re-establishment of the food service industry and renewed edible oil production is expected to contribute to the growing demand for UCO once the pandemic is brought under control.  

USED COOKING OIL MARKET GROWTH FACTORS

Increasing Use of UCO in Biodiesel Industry Drives Market Growth

Recent technological advancements in waste recycling have encouraged people to recycle waste products and convert them into useful products that are beneficial for the environment. The product has a massive potential to be refined into various bio-fuels to generate power. Biodiesels that are produced using waste cooking oil have a lower carbon footprint and burn cleaner. They also release less amount of carbon monoxide and are cost-effective as compared to petroleum diesel. The increasing demand for recycled UCO for biodiesel production primarily drives the growth of the market. The recycling process generates by-products, which are useful in the manufacturing of soap and glycerine, which increases their demand. According to the Biomass Board of Research and Development, the global biodiesel supply reached 39,654 million litres in 2015 and is expected to reach 50,334 million litres by 2025.

Rising Government Efforts to Reduce Oil Wastage Will Emerge in Favor of Market Growth

Governments in several countries across the world are putting in more effort to create public awareness by enabling policies and regulations to encourage the use of recycled. For instance, in August 2019, the government of India launched a program to convert used cooking oil into biodiesel in 100 cities of India. In 2018, the government also launched the Repurpose Used Cooking Oil (RUCO) app to collect the oil.  Channelling the UCO into biodiesel production also prevents it waste from re-entering the food chain. The UK Environmental Agency has laid out certain guidelines for restaurants to follow regarding cooking oil disposal. The agency is sponsored by the Department for Environment, Food & Rural Affairs (DEFRA) and aims at preventing inaccurate disposal of waste oil.

RESTRAINING FACTORS

Challenges Faced in Processing of UCO to Impede Market’s Growth

The challenges faced during the processing and refinement of UCO restrict the growth of the market. The presence of a high amount of unwanted free fatty acids and water are considered impurities that have to be removed before transesterification, the most important process of refining. The high amount of free fatty acids react with alkaline catalysts that inhibit the reaction, resulting in a poor quality biodiesel yield.  The high amount of impurities also limits their utilization in animal feed due to safety purposes. The biodiesel produced using UCO may reduce its combustion level and reduce engine power to hamper its demand worldwide.

USED COOKING OIL MARKET SEGMENTATION ANALYSIS

By Source Analysis

Foodservice Segment Holds the Major Market Share due to High Utilization of the Product across Various Sectors

Based on the source, the market is segmented into food service and households. The emerging culture of dining out influences the growth of the food service segment. The expansion of cafes and restaurants across the globe has increased the demand for the product. The growing interest among consumers in trying out exotic cuisines has propelled the utilization of exotic cooking oils across the foodservice industry. According to the National Restaurants Association (U.S.), the sales at U.S. restaurants and hotels reached USD 825 billion in 2018, with a 4% year-on-year growth rate. Fast-food chains grew at a CAGR of 7% from 2013 to 2018, which indicates that the food service sector will grow in the upcoming years.

The food service segment share is also expected to grow at a faster pace due to the ongoing developments in policies and regulations set out by governments for the collection of waste cooking oil from hotels & restaurants.

By Application Analysis

Industrial Application Exhibits Robust Growth Owing to the Rising Demand for Fuel Production

The widespread applications of UCO for the production of fuels propel the growth of the industrial application segment. Advances in technologies used to process waste cooking oil have promoted its utilization in various industrial processes. Along with the biodiesel, the UCO can produce ozone-treated oil with a higher calorific value and lower ignition point. This oil is also used as a fermentation media component that further acts as a carbon source for microorganisms. The formation of beneficial by-products of certain components can be put to further use, which drives the segment's growth. Darling Ingredients, a leading biodiesel producer, mentioned that the U.S. produced 160 million gallons of renewable diesel in 2018, and this figure is expected to increase by 20% in the upcoming years.

REGIONAL USED COOKING OIL MARKET ANALYSIS

North America accounts for the largest market share due to the current legislative developments that promote the utilization of waste cooking oil for sustainable fuel generation. In Europe, the EU is also making major efforts to increase biodiesel production. According to the European Commission, a major percentage of diesel consumption will replace biodiesel by EU27. Governments of the various countries in this region are laying out policies that promote the collection and processing of waste cooking oils from cafes, restaurants, hotels, catering businesses, and hotels. The promotional campaigns in the region that create awareness regarding the recycling of waste cooking oil also drive the growth of the market in the region.

The market in the Asia Pacific is expected to exhibit a significant CAGR owing to the increased awareness regarding environmental welfare and sustainable energy resources. The increasing number of companies entering into the collection, refinement, and processing of waste cooking oil in this region will aid growth. Companies operating in North America and Europe invest in UCO procurement from Asian countries to fulfil their raw material demand for biodiesel production. The evolution of the food and food service industry across the region also supports market growth.

Brazil is one of the largest producers of biodiesel, and hence, the demand for using alternative sources as feedstock is also increasing. As more countries are using waste cooking oil to produce biodiesel, Brazil is also promoting its use in biodiesel production. Moreover, in 2016, the Brazilian President signed the biofuels initiative into law, which will help increase the production of biodiesel in Brazil in coming years. On the other hand, Argentina also expands its renewable energy sources to support its commitment to reducing greenhouse gas emissions. The 2006 Biofuels Law 26,093 mandated a 5 per cent biodiesel mix in diesel and bioethanol in gasoline beginning in 2010. Since 2016, the blend has mandated a 12 percent mix for ethanol and a 10 percent mix for biodiesel. Such initiatives are expected to increase biodiesel production in Argentina, which will increase the demand for used cooking oil during the forecast period.

In the Middle East & Africa regions, many countries are transitioning from conventional energy resources to more efficient energy resources. In African countries, there is a significant opportunity for entrepreneurs, particularly those in informal and rural settlements, to use cooking oil or edible oils to produce and resell biodiesel. In Zambia, a young entrepreneur has grown his business from 200 litres of biodiesel produced from used cooking oil to 3,000 litres per month, selling it to local customers for use in vehicles and machinery. More such initiatives are expected to boost the use of this oil in the production of biodiesel.

KEY INDUSTRY PLAYERS

ABP Food Group Invests in Expansion of UCO Processing for Fulfilling Green Energy Demand

The ABP Food Group is focused on investing in the expansion of the processing of used oil to produce sustainable energy. For instance, in October 2017, the company invested USD 28.8 million to open a green energy plant in the UK. The presence of multiple small players and their extended production and distribution capabilities has resulted in the fragmentation of the market across the globe. Other key players, such as Valley Proteins, Inc., Proper Oils Co. Ltd., and Baker Commodities, Inc. are focusing on facility expansions, innovation of novel processing techniques, and partnerships to strengthen the presence in the market.

LIST OF KEY COMPANIES PROFILED IN THE USED COOKING OIL MARKET:

• Valley Proteins, Inc. (Virginia, U.S.)


• Proper Oils Co. Ltd. (London, U.K.)


• ABP Food Group (County Louth, Ireland)


• Arrow Oils Ltd. (Manchester, U.K.)


• Baker Commodities, Inc. (California, U.S.)


• Grand Natural, Inc. (California, U.S.)


• Oz Oils Pty. Ltd. (Queensland, Australia)


• Brocklesby Limited (Brough, U.K.)


• GreaseCycle (North Carolina, U.S.)


• MBP Solutions Ltd. (Neuchatel, Switzerland)

KEY INDUSTRY DEVELOPMENTS:

• January 2020 – BioD Energy, an Indian biodiesel producer, announced to start two new biodiesel processing plants that manufacture biodiesel by utilizing this waste oil.


• August 2020 – Phillips 66 Humber Refinery, a U.K.-based company, announced the expansion of its production site in Immingham.

REPORT COVERAGE

The global used cooking oil market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product sources, and leading application areas of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market over recent years.

Report Scope & Segmentation: