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Dragon Lion Finance, interpreting politics and economics, hello everyone, I am Xiuqiu, who would have thought that the “sewer assassin” that made the Chinese terrified ten years ago, the gutter oil, has now become the “liquid gold” that Europe, America, Japan and South Korea are scrambling to buy? Back then, unscrupulous merchants secretly brought gutter oil back to the table, and now governments are lining up to sign orders. This plot is just like a skit, the villain counterattacks to become the protagonist, from the abandoned concubine in the cold palace to the master of the six palaces, and now not only the six palaces, but also the six countries.
Gutter oil, to put it bluntly, is the waste cooking oil that is fished out of the sewers of restaurants and canteens, or repeatedly used. In the past, some unscrupulous merchants, in order to save costs, processed this stuff a little and served it on the table again. Long-term consumption will cause great harm to the human body, such as damaging the liver, causing gastrointestinal diseases, and even the risk of cancer. It makes people feel sick just thinking about it. Therefore, gutter oil has been the “public enemy” of food safety for a long time, and everyone frowns when they hear this word.
In 2010, the report “Encirclement and Fight against Gutter Oil” came out, and the sentence “One out of 10 meals is gutter oil” directly broke the defense of the people across the country. Liu Liguo, the owner of a black workshop in Shandong, feeds the gutter oil demand of 600,000 people a year by himself, and can be called the “catering industry Thanos”. At that time, gutter oil exceeded the standard for heavy metals and aflatoxin. Eating a mouthful was like swallowing arsenic. The unscrupulous merchants turned “waste oil” into a “waste people” industry chain.
Just when the Chinese were busy fighting wits and courage with gutter oil, KLM suddenly made a show of using gutter oil to refine aviation fuel! In 2011, a Boeing 737 carrying 171 passengers flew from Amsterdam to Paris using “gutter oil” and shocked the world. Since then, gutter oil has unlocked a new identity: it is not used for cooking, but for “flying airplanes”!
Compared with traditional biofuel raw materials such as soybean oil, rapeseed oil and palm oil, gutter oil is originally a waste, with almost zero carbon emissions, and is an ideal environmentally friendly energy source. With the maturity of technology, the global demand for gutter 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.
Why is China’s gutter oil so popular in Europe, the United States, Japan and South Korea?
There are 12.6 million restaurants in China, and only 700,000 in the United States. The boiling red oil in hot pot restaurants alone is enough to fill the Mississippi River. The potential output of 6 million tons per year is equivalent to the “Middle East oil field” of the global gutter oil market. Europe, America, Japan and South Korea shed tears of envy at the number of shabby restaurants in their own countries: “We can’t handle this overwhelming wealth!”
The processing cost of gutter oil is about 6,000 yuan/ton, and it can be sold for 18,000 yuan/ton, with a profit margin of 300%. Shanghai B5 biodiesel buses save 3.63 million yuan in fuel costs a year, and the emission reduction effect is comparable to planting an Amazon rainforest in the Sahara Desert. Even more magical is that the domestic C919 large aircraft successfully completed its maiden flight using a 40% gutter oil mixed fuel. Netizens exclaimed: “Gutter oil can fly to the sky, what reason do I have to lie down?”
However, due to the strong demand for gutter oil, the price of gutter oil once surpassed palm oil, causing Europe to suspect that China’s gutter oil may be mixed with palm oil for sale, and imposed tariffs on it. As a result, the United States laughed wildly: “You don’t want it? Take it!” This plot is very much like a quarrel between besties to grab a boyfriend, except that it is gutter oil.
The US federal government subsidizes biodiesel at $1 per gallon, which is equivalent to 6,000 yuan per ton of gutter oil. California has also added additional subsidies, causing importers to rush to buy Chinese gutter oil overnight. Even Trump tweeted: “Make America Greasy Again!”
Now the United States’ imports of Chinese gutter oil have surged 580 times in two years. In 2023, it bought 718,000 tons and in the first half of 2024, it bought another 600,000 tons. Even the American Soybean Association is anxious: “If we continue to buy, our soybean oil will be unsalable!” Europe is even more exaggerated, consuming 130,000 barrels of gutter oil every day, 60% of which is imported from China. The price once soared to 7,200 yuan/ton, which is more expensive than soybean oil. The Japanese are no longer pretending. The oil company directly signed an agreement with the restaurant: “Give me the gutter oil and you will get the money!”
Japan’s annual output of 500,000 tons of gutter oil is not enough to feed its own oil companies, so it can only humbly buy Chinese products. Some netizens complained: “It used to be said that nuclear waste water can be drunk, but now even gutter oil is being snatched up. Japan is really an “environmental protection” pioneer!”
In addition, the demand for Chinese gutter oil in Singapore, Southeast Asia and other countries is also growing rapidly. In 2023, the price of gutter oil soared to RMB 7,200 per ton, becoming a veritable “liquid gold”.
Gutter oil recycling and deep processing will become an emerging industrial opportunity
In recent years, more and more companies have begun to deploy in this field, but the biggest challenge at present is how to ensure a stable supply of gutter oil.
A large amount of gutter oil is produced in my country every year, but due to the scattered sources of raw materials and the imperfect recycling system, the recycling and utilization of gutter oil still faces certain difficulties. However, some cities have launched active explorations.
For example, Wenzhou has biodiesel companies uniformly recycle gutter oil and improve efficiency through standardized management; Shanghai has established a full-process closed-loop management model of “collection, transportation, disposal, and application” of waste cooking oil.
These explorations show that there are huge business opportunities in the recycling of gutter 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 of 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 story of waste cooking oil tells us that the turning point of the times is always accompanied by problems and challenges. If you only focus on the problem, you will always see the dilemma; but if you change your perspective, the problem is often the starting point of opportunity.
An aging society is a typical example. Many people think that elderly care is a 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 rise to new industrial opportunities. Similarly, although manual manufacturing is inefficient, folk crafts are becoming popular among young people in the context of the revival of traditional culture in China, and have become a “small and beautiful” entrepreneurial trend.
The current difficulties are often the starting point of new opportunities. As long as you maintain a keen awareness of the trends of the times, you can continue to discover new industrial opportunities. Just like the transformation of gutter oil from a “cancer on the table” to a “green energy star”, behind every problem may be an opportunity to change the world. Now that even gutter oil can turn over, what reason do you have not to work hard?
Domestic video address: https://www.bilibili.com/video/BV1jKXQYLEH6
Overseas video address: https://www.youtube.com/watch?v=Ht19AgjWQhM
