China’s UCO exports to the US boosted, while flow to the EU slows in 2020-2023

Shipments of UCO from China have increased in the past three years to Asia and US, but the trend is moving in the opposite direction in Europe

Shipments of used cooking oil (UCO), a biofuel feedstock, from China have increased to Singapore, the US, Malaysia and Indonesia in the past three years, while the flow to Spain and the Netherlands slowed down, global trade tracker (GTT) data shows.

The move underscores the growing significance of UCO in the biofuel supply chain and the rise in rival demand centers that is teasing established flows away from European destinations and towards emerging demand centers such as the US Gulf. 

In 2020, China’s biggest UCO buyers were Spain (206,142 tonnes) and the Netherlands (246,921 tonnes), taking half of the total exported volume of 917,625 tonnes.

The numbers increased further in 2021 and 2022 to 431,075 tonnes and 321,875 tonnes for Spain and 210,583 tonnes and 415,002 tonnes for the Netherlands, while China’s total exports rebounded after the Covid-19 pandemic to 1.14 million tonnes and 1.58 million tonnes respectively.

Despite Europe’s growing biofuels production and feedstock demand, the flow to Spain and the Netherlands decreased to 139,161 tonnes and 214,233 tonnes respectively during the January-November period of 2023, with trading activity switching to the US and Asian destinations.

Legislation drove demand for Chinese UCO to the US

The US only turned to Chinese UCO in 2022, when it picked up a total of 47,550 tonnes of the material, followed by a further volume increase in 2023, with 689,714 tonnes of Chinese UCO imported in January-November.

That came as legislation designed to counter the impact of inflation and kickstart a new biofuels age came into effect across the US – the Inflation Reduction Act – bringing clear incentives to invest in production of renewable diesel

UCO imports to the US were boosted as a result of a waste-based feedstocks demand increase, which currently stands at 19.7 million tonnes, while the country’s local supply only meets 8.2 million tonnes of the need.

Biofuel demand drove Chinese UCO to Asia

China’s UCO shipments also increased to Singapore – home of Neste’s Singapore biorefinery, which had its production capacity increased to 2.6 million tonnes per year – with 295,498 tonnes imported in 2021 and 317,911 tonnes in 2022, compared with just 87,874 tonnes shipped in 2020.

Singapore imported 351,552 tonnes of Chinese UCO within 11 months of 2023, exceeding the previous year’s figure as Finnish oil refining company Neste expanded its hydrotreated vegetable oil (HVO) and sustainable aviation fuel (SAF) production at its local biorefinery.

Of the 2.6 million tonnes nameplate capacity, the company has said the facility should be able to produce 1 million tonne of sustainable aviation fuel as part of its output.

Finally, Indonesia’s UCO imports from China jumped to 118,791 tonne in 2023, up 95% from last year’s 42,283 tonne, while Malaysia’s imports reached 105,802 tonne in 2022 but then dropped to 59,178 tonne in 2023.

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