Global UCO-based Biodiesel Market Strategic Research Report

Scope of the Report

The global UCO-based Biodiesel market size is predicted to grow from US$ 15,882 million in 2025 to US$ 27,443 million in 2032; it is expected to grow at a CAGR of 8.5% from 2026 to 2032.

In 2025, global sales volume of UCO-based biodiesel reached 12.63 million tonnes, with an average price of $1,285 per tonne.

UCO-based biodiesel (biodiesel derived from Used Cooking Oil) is produced using waste cooking oil (UCO)—commonly known as "gutter oil" or swill oil—as feedstock. Production occurs via transesterification (first generation, FAME) or hydrodeoxygenation (second generation, HVO/HEFA). Unlike conventional biodiesel made from edible vegetable oils, UCO biodiesel utilizes waste fats and oils from the catering and food processing industries. It offers the distinct advantage of not competing with food supplies or arable land and delivers superior lifecycle carbon reduction (80%–90% lower than fossil fuels). Consequently, it benefits from "double counting" policy incentives under regulations such as the EU Renewable Energy Directive (RED III), making it the fastest-growing and most strongly policy-supported category within the global biodiesel industry.

The feedstock for UCO-based biodiesel is Used Cooking Oil (UCO), primarily sourced from the food service industry (restaurants, canteens, fast-food outlets), the food processing industry (fried food and instant noodle factories), and household kitchens. China is the world's largest producer and exporter of UCO; while its theoretical annual production capacity exceeds 8 million tonnes and actual collection/processing volume was approximately 5.4 million tonnes in 2024, collection volumes declined by about 20% year-on-year in 2025 due to poor business conditions in the food service sector. Feedstock supply faces several core challenges: UCO prices surged from approximately $540/tonne in March 2023 to $1,300/tonne in November 2023 (a 240% increase); by November 2025, average prices in China stood at approximately 6,456 RMB/tonne for "gutter oil" (reclaimed waste oil), 6,881 RMB/tonne for "swill oil" (oil recovered from food waste), and 7,920–7,950 RMB/tonne for high-quality UCO at ports. There is fierce global competition to secure supplies, and both Europe and the Netherlands are set to implement UCO import quota restrictions starting in 2026. Additionally, China eliminated the 13% export tax rebate for UCO in December 2024; based on the 2024 export price of $897/tonne, exporters lost approximately $117/tonne in rebate-related profits, meaning more UCO will remain in the domestic market in the future. Furthermore, the feedstock collection system is highly fragmented—with individual operators accounting for about 84.5% of upstream suppliers in China—resulting in inconsistent feedstock quality, significant fluctuations in free fatty acid content (typically 5%–20%, compared to <3% for high-quality UCO), and high pretreatment costs.

The cost structure of UCO-based biodiesel is characterized by the absolute dominance of raw material costs, followed by processing costs. Direct materials account for as much as 84.3% of biodiesel production costs; producing one tonne of biodiesel consumes approximately 0.97 tonnes of Used Cooking Oil (UCO). Manufacturing overhead and freight costs make up about 12.5%. For the second-generation HVO process, costs are roughly double those of FAME, reaching approximately $1,350 per tonne. Feedstock costs account for over 80% of this total, while hydrogen consumption represents 5–8% (hydrogen usage rate of 3–4%), precious metal catalysts (Pt, Pd, or Ni-Mo, Co-Mo) and chemicals account for 3–5%, energy and utilities for 3–5%, and depreciation and labor for 3–5%. Feedstock pretreatment represents a major hidden cost; due to high impurity levels and high acid values, UCO requires complex pretreatment steps—such as dehydration, deacidification, desalting, and degumming—which significantly drive up actual production costs. Companies primarily seek to reduce costs through upstream integration (acquiring food waste processing plants, signing long-term supply agreements), optimizing catalyst efficiency (reducing hydrogen consumption), adopting ebullated-bed processes (simplifying pretreatment), and bulk purchasing; however, raw material price volatility and supply stability remain the industry's core challenges.

Key Questions Addressed in this Report

What is the 10-year outlook for the global UCO-based Biodiesel market?

What factors are driving UCO-based Biodiesel market growth, globally and by region?

Which technologies are poised for the fastest growth by market and region?

How do UCO-based Biodiesel market opportunities vary by end market size?

How does UCO-based Biodiesel break out by Type, by Application?

This report presents a comprehensive overview of the global UCO-based Biodiesel market, covering market size and forecast, segmentation by product type and application, competitive landscape, leading players and regional and country-level outlook.

Segment by Type

• FAME
• HVO
• SAF

Segment by Feedstock Source

• Gutter Oil
• Swill Oil
• Food Processing Waste Oil
• Other

Segment by Process Type

• Transesterification
• Hydrodeoxygenation
• Hydroisomerization
• Ebullated-bed Hydroprocessing

Segment by Application

• Industrial Fuels
• Transportation Fuels
• Chemical
• Others

Who Can Use This Report?

This report is written for decision-makers who need a clear, data-backed view of the global UCO-based Biodiesel market:

• Manufacturers, suppliers and solution providers benchmarking their position and planning product, capacity and go-to-market strategy
• Distributors, channel partners and end users in Industrial Fuels, Transportation Fuels, Chemical evaluating demand and sourcing options
• Investors, financial analysts and consultants assessing growth opportunities, competitive dynamics and M&A potential
• Government agencies, industry associations and research institutions tracking industry developments and policy impact