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The global used cooking oil market size was USD 5.50 billion in 2019 and is projected to reach USD 8.48 billion by 2027, exhibiting a CAGR of 6.0% during the forecast period.
The global used cooking oil (UCO) or waste cooking oil market will rise considerably owing to the rising awareness regarding sustainable energy resources and environmental conservation. Recent advancements in technologies that are used to process UCO into high-quality refined oil will emerge in favor of the growth of the overall market. The rapidly evolving food and foodservice industry that involves novel preparations based on cooking oil had a direct impact on the overall production of this UCO. Increasing government initiatives to promote the utilization of UCO for industrial purposes is expected to drive the used cooking oil market growth in foreseeable years.
COVID-19 Pandemic to Significantly Reduce the Supply of Used Cooking Oil as a Raw Material for Other Industries
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 foodservice industry, which has significantly reduced this UCO supply to the UCO processing companies. The recycling of UCO experienced a sudden slump due to the limited product supply and manpower scarcity. The impact on the foodservice industry mirrors the impact on this market. The re-establishment of the foodservice industry and renewed production of cooking oil is expected to contribute to the growing demand for UCO once the pandemic is brought under control.
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Utilization of Sustainable & Green Energy to Tackle Environmental Issues will 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, along with a few leading energy & fuel companies, are adopting policies that support the green economy. Biodiesel manufactured from UCO is an emerging category in green energy space. In recent years, consumer preference has shifted from using petroleum diesel to biodiesel owing to its environmental welfare counterparts. Furthermore, the growing awareness regarding food wastage among consumers and stringent safety regulations associated with the product contributes to the increased availability of this waste cooking oil for fuel production.
Increasing Use of UCO in Biodiesel Production Drives the 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 biofuels to generate power. Biodiesels that are produced using used 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 used cooking oil 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 liters in 2015 and is expected to reach 50,334 million liters by 2025.
Rising Government Efforts to Reduce the 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 waste cooking oils. For instance, in August 2019, the government of India launched a program to convert this type of oil into biodiesel in 100 cities of India. In 2018, the government also launched the Repurpose Used Cooking Oil (RUCO) app for the collection of the oil. Channeling the used cooking oil into biodiesel production also prevents it from re-entering in the food chain. The UK Environmental Agency has laid out certain guidelines for restaurants 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.
Challenges Faced in Processing of UCO to Impede the Growth of the Market
The challenges faced during the processing and refinement of UCO restrains the growth of the market. The presence of a high amount of unwanted free fatty acids and water are considered as impurities that have to be removed before transesterification, the most important process of refining. The high amount of free fatty acids reacts 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 by using UCO may reduce its combustion level and reduce engine power to hamper its demand across the world..
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Foodservice Segment Holds the Major Market Share due to High Utilization of Cooking Oils across the Sector
On the basis of the source, the market is segmented into food services and households. The emerging culture of dining-out influences the growth of the foodservice segment. The expansion of cafes and restaurants across the globe has increased the demand for various cooking oils. The growing interest in trying out exotic cuisines among consumers 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. The fast-food chains grew at a CAGR of 7% from 2013-2018, which indicates that the food services sector will grow considerably in the coming years.
The foodservice 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 this UCO from hotels & restaurants.
Industrial Application Exhibits Robust Growth owing to the Rising Demand for the Production of Fuels
The widespread applications of used cooking oil for the production of fuels propels the growth of the industrial application segment. Advances in technologies used for the processing of UCO have promoted its utilization in various industrial processes. Along with the biodiesel, the UCO can be used to produce ozone-treated oil that has a higher calorific value and lower ignition point. This oil is also used as a fermentation media component that further actos as a carbon source for microorganisms. The formation of beneficial by-products of certain components can be put to further use, which drives the growth of the segment. Darling Ingredients, a leading biodiesel producer mentioned that the U.S. produced 160 million gallons of renewable diesel in the year 2018 and this figure is expected to increase by 20% in the upcoming years.
Europe Used Cooking Oil Market Size, 2019 (USD Billion)
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Europe accounts for the largest market share due to the current legislative developments that further promotes the utilization of used cooking oil for sustainable fuel generation. According to the European Commission, a major percentage of diesel consumption will be replaced by 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 UCO also drives the growth of the market in the region.
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Asia Pacific used cooking oil market 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 UCO in this region will aid growth. Companies operating in North America and Europe are investing in the procurement of UCO from Asian countries to fulfill their raw material demand for biodiesel production. The evolution of the food and foodservice industry across the region also supports market growth.
ABP Food Group is Investing in the Expansion of UCO Processing to Fulfill the Demand for Green Energy
The ABP Food Group is focused on investing in the expansion of the processing of used cooking oil for the production of 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 in the market 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, the innovation of novel processing techniques, and partnerships to strengthen their presence in the market.
An Infographic Representation of Used Cooking Oil Market
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The used cooking oil market research report provides a detailed analysis and industry forecast. Also focuses on key aspects such as leading companies, product sources, and leading wide application areas of the product. Besides this, the report includes and 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.
Value (USD Billion)
By Source, Application, and Geography
Fortune Business Insights says that the global used cooking oil market size was USD 5.50 billion in 2019 and is projected to reach USD 8.48 billion by 2027.
In 2019, the Europe market value stood at USD 2.84 billion.
Growing at a CAGR of 6.0%, the market will exhibit steady growth in the forecast period (2020-2027).
Food services segment is expected to be the leading segment in this market during the forecast period.
Increasing demand for bio diesels is the key factor driving the growth of the market.
Valley Proteins Inc. and ABP Food Corps are the major players in the market.
Europe dominated the market share in 2019.
Expansion of the foodservice industries is expected to drive the adoption in the global market.
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