GuShiio.com 
Who would have thought that the waste oil that everyone once avoided would now become a hot commodity, and some people even called for it to be included in the national strategic resources? What happened behind this? Today, let’s talk about how waste oil can be “turned into treasure” and the huge industrial opportunities hidden in this process. Finally, I will share with you what we can learn from this phenomenon about discovering new opportunities.
Do you still remember the “Encirclement and Suppression of Waste Oil” in the China Youth Daily in 2010 that caused an uproar? At that time, gutter oil was the number one enemy of food safety. A few unscrupulous merchants fished waste oil from the sewers and illegally processed it into the market. This oil contains harmful substances such as heavy metals and aflatoxin, which seriously threatens the health of consumers.
However, in just over a decade, the fate of gutter oil has changed dramatically. Today, it has not only disappeared from the table, but has also become an important role in the global energy transformation. In the first nine months of 2024, China exported a staggering 2.125 million tons of waste cooking oil (also known as industrial mixed oil, referred to as UCO), mainly to the United States, the European Union and Singapore. Yes, China has become the world’s largest exporter of gutter oil!
Behind the counterattack of gutter oil: a microcosm of global energy change
The “turnaround” of gutter oil can be traced back to a bold attempt by KLM in 2011. That year, a Boeing 737 passenger plane of KLM Royal Dutch Airlines completed a flight from Amsterdam to Paris using biofuel made from gutter oil. The flight attracted global attention because it revealed the huge potential of waste cooking oil as a green energy source.
Compared with traditional biofuel raw materials such as soybean oil, rapeseed oil and palm oil, waste cooking oil was originally a waste product with almost zero carbon emissions, making it an ideal environmentally friendly energy source. As the technology matures, the global demand for waste cooking oil has risen rapidly. The International Energy Agency predicts that by 2027, global biofuel demand will soar to 186 billion liters, an increase of 28% from 2022.
Europe is the main consumer market for waste cooking oil. Due to the EU’s strict regulations on carbon emissions, countries have accelerated the adoption of renewable energy, and biofuels have been widely used in industries such as aviation and transportation. According to statistics, Europe consumed nearly 7 million tons of waste cooking oil for biofuel production in 2023, and most of this oil came from restaurants, which is what we commonly call waste cooking oil or swill oil.
Why is China’s waste cooking oil so popular?
Unexpectedly, the recycling cost of waste cooking oil in China is much lower than that in Europe, which makes Chinese waste cooking oil extremely competitive in the international market. Data shows that in the European market, the price of waste cooking oil may be several thousand yuan higher per ton than the import price in China. The huge price difference has caused Chinese waste cooking oil to flood into the European market at a low price, forming the so-called “dumping” phenomenon.
Although the European Commission began to impose temporary anti-dumping duties on Chinese biofuels in August 2024, with tax rates ranging from 12.8% to 36.4%, this did not have a substantial impact on the total export volume of Chinese waste cooking oil. The reason is simple-the United States took over.
In 2023, the United States imported 718,000 tons of waste cooking oil from China; in the first half of 2024, this figure exceeded 600,000 tons, while two years ago it was almost zero. The National Oilseed Processors Association (NOPA) of the United States expressed concern about this and tried to lobby the Biden administration to impose tariffs on Chinese waste cooking oil. However, this proposal was strongly opposed by American companies because biofuel processed from waste cooking oil is a clean energy with the lowest carbon intensity and meets environmental protection requirements.
In addition, the demand for China’s waste cooking oil in Japan, Singapore, Southeast Asia and other countries is also growing rapidly. In 2023, the price of waste cooking oil soared to RMB 7,200 per ton, becoming a veritable “liquid gold”.
Waste cooking oil recycling and deep processing: an emerging industry opportunity
As early as 2013, China successfully completed the verification test flight of waste cooking oil into aviation fuel, laying the foundation for the application of sustainable aviation fuel (SAF). In recent years, more and more companies have begun to layout this field, but the biggest challenge at present is how to ensure a stable supply of waste cooking oil.
my country produces a large amount of waste cooking oil every year, but due to the scattered sources of raw materials and the imperfect recycling system, the recycling and utilization of waste cooking oil still faces certain difficulties. However, some cities have launched active explorations. For example:
1. Wenzhou has biodiesel companies uniformly recycle waste cooking oil and improve efficiency through standardized management;
2. Shanghai has established a closed-loop management model for the entire process of “collection, transportation, disposal, and application” of waste cooking oil.
These explorations show that there are huge business opportunities in the recycling of waste cooking oil. At the same time, the economic benefits of deep processing of waste cooking oil are also very considerable. For example, the price of industrial-grade mixed oil processed into biodiesel has increased from 7,000 yuan per ton to 8,000 yuan; and further processed into sustainable aviation fuel, the price can reach 18,000 yuan per ton, and the profit has doubled by 2.5 times.
In November 2024, the Ministry of Finance announced that it would cancel or reduce the export tax rebate for some commodities from December, including waste cooking oil. This policy change is not only to cope with the anti-dumping pressure from Europe and the United States, but also to force domestic enterprises to transform and upgrade and promote the development of the deep processing industry of waste cooking oil.
The revelation of the counterattack of gutter oil: problems and opportunities are two sides of the same coin
The story of gutter oil tells us that the turning point of the times is always accompanied by problems and challenges. If you only focus on the problems, you will always see difficulties; but if you change your perspective, problems are often the starting point of opportunities.
An aging society is a typical example. Many people think that elderly care is a difficult problem, but from another perspective, the consumption potential of the new generation of elderly people is huge, and their travel and entertainment needs are giving birth to new industrial opportunities. Similarly, although handmade manufacturing is inefficient, in the context of the revival of traditional culture, folk crafts are being loved by young people and have become a “small and beautiful” entrepreneurial trend.
As I mentioned in the course, the “Fifteen Future Trends” pointed out that interest consumption, health consumption and spiritual consumption will become the three new consumption trends in 2025. When the economy is under pressure, people are more willing to pay for the present, especially young people, who are willing to invest more in hobbies, spiritual satisfaction and sports health.
Looking at future industrial opportunities from waste cooking oil
The counterattack of waste cooking oil is not only a business miracle, but also a microcosm of the global energy transformation. In the future, with the advancement of technology and the improvement of the industrial chain, China’s waste cooking oil industry is expected to occupy a more important position in the international market.
More importantly, the story of waste cooking oil reminds us that the current difficulties are often the starting point of new opportunities. As long as we maintain a keen awareness of the trends of the times, we can continue to discover new industrial opportunities. Just like the transformation of waste cooking oil from a “cancer on the table” to a “green energy star”, behind every problem, there may be an opportunity to change the world.
