Used Cooking Oil Market Expected to Reach $12.2 Billion by 2035

According to a new report published by Allied Market Research, titled, “Used Cooking Oil Market," The used cooking oil market size was valued at $6.7 billion in 2023, and is estimated to reach $12.2 billion by 2035, growing at a CAGR of 5.2% from 2024 to 2035.

Used cooking oil or waste cooking oil are edible vegetable oils produced from the repetitive use of vegetable oil for food preparation to the point where it is no longer fit for that purpose. There are two main sources from where used cooking oil can be collected. This includes Commercial sectors such as restaurants, hotels, and caterers (HORECA) and household sectors. The rise in the adoption of low-carbon fuels fosters the demand for used cooking oil as feedstock in markets throughout North America, Europe, Asia-Pacific, and LAMEA.

The increased adoption of used cooking oil across various industries is driving market growth by expanding its applications beyond traditional uses. Sectors such as biofuels, animal feed, and cosmetics are increasingly using cooking oil as a sustainable and cost-effective raw material. For example, biodiesel production has increased by approximately 4-14% over the past decade, providing economic advantages such as enhanced energy security, job creation, and used cooking oil market growth.

This shift reduces dependence on imported fossil fuels, contributing to energy independence and stability. Additionally, the animal feed industry benefits from the nutritional value of used cooking oil, while the cosmetics industry appreciates its moisturizing properties. This cross-industry adoption is supported by growing environmental awareness and regulatory support for sustainable practices, such as the European Union’s Waste Framework Directive, which promotes the use of waste oils in various sectors. This diverse utilization not only increases the demand for used cooking oil but also enhances its value proposition, encouraging more businesses to invest in its collection and processing.

However, the stealing of used cooking oil significantly hampers market growth by disrupting legitimate collection and recycling operations. As the value of used cooking oil rises due to its demand for biodiesel production, theft has become more prevalent. The National Renderers Association estimates that up to $75 million worth of used cooking oil is stolen each year. This theft leads to financial losses for legitimate businesses and destabilizes the supply chain. Stolen oil often ends up on the black market, bypassing regulatory standards, which compromises the quality and safety of biodiesel production.

In addition, companies affected by theft may face higher insurance premiums and increased security costs, further straining their operations. These illegal activities reduce the availability of used cooking oil for licensed recyclers, limiting the overall market supply. Consequently, recycling programs, sustainability goals, and used cooking oil market trends related to biodiesel production are undermined, presenting a significant challenge to used cooking oil industry.

Moreover, circular economy initiatives present a significant used cooking oil market opportunities by promoting sustainability and efficiency. These initiatives focus on maximizing resource recovery and extending the lifecycle of materials, which aligns well with recycling used cooking oil into biodiesel. As circular economy practices gain momentum, there is an increased demand for products made from recycled materials, including biodiesel derived from used cooking oil. This not only reduces waste but also enhances market prospects by supporting sustainable alternatives to fossil fuels. In addition, circular economy frameworks drive innovation in recycling technologies, improving the quality and efficiency of oil processing. With better waste management practices and regulatory support for sustainability, businesses can benefit from reduced disposal costs and new revenue streams. Ultimately, circular economy initiatives contribute to a more sustainable and profitable used cooking oil industry.

The used cooking oil market is segmented on the basis of source, application, and region. By source, it is classified into the household sector and the commercial sector. By application, it is divided into biodiesel, oleo chemicals, animal feed, and others. By region, it is analyzed across North America (U.S., Canada, and Mexico), Europe (Germany, France, UK, Italy, the Netherlands, and the rest of Europe), Asia-Pacific (China, India, Australia, Japan, and the rest of Asia-Pacific), and LAMEA (Latin America, Middle East, and Africa).

By source, the household sector segment is expected to be the fastest-growing segment during the forecast period. This growth is driven by increased consumer awareness and participation in recycling programs among households due to a surge in environmental campaigns and local government initiatives. According to a report by the U.S. Environmental Protection Agency, household recycling rates have steadily increased, with used cooking oil collection programs being a significant contributor. Moreover, the convenience of curbside collection services and the proliferation of drop-off points have made it easier for households to recycle cooking oil. Innovations in home collection technologies, such as easy-to-use containers and partnerships with waste management companies, facilitate this growth during used cooking oil market forecast.

By application, the oleo chemicals segment is expected to be the fastest-growing segment during the forecast period. This is due to a rise in demand for sustainable and renewable resources in the chemical industry. This trend has encouraged the oleo chemical industry to focus on alternative and renewable raw materials such as used cooking oil to produce products including soap. Moreover, used cooking oil is a waste material that does not compete with edible vegetable oil & fats and is available at a low cost in the market. This fact leads to the increase in applications of used cooking oil in oleo chemicals. This in turn is anticipated to fuel the growth of the used cooking oil market in the future.

By region, Europe region held used cooking oil market share in 2023 and is expected to grow at a significant CAGR during the forecast period. Europe is the key region that contributes toward the growth of the used cooking oil market. This is attributable to the rise in environmental concern and government-supportive regulation in the region. The Renewable Energy Directive and the Fuel Quality Directive in Europe are promoting the use and production of renewable sources of energy, which is one of the key factors driving the growth of the used cooking oil market in this region.

The major players operating in the market focus on key market strategies, such as mergers, product launches, acquisitions, collaborations, and partnerships. They have also been focusing on strengthening their market reach to maintain their goodwill in the ever-competitive market. Some of the key players in the used cooking oil market analysis include Valley Proteins, Inc., Quatra, Baker Commodities Inc., Arrow Oils Ltd, Olleco, Waste Oil Recyclers, Grand Natural Inc., GREASECYCLE, Brocklesby Limited, and Oz Oils Pty Ltd.

Key Findings of Study

• By application, the biodiesel segment was the highest revenue contributor to the market in 2023.
• Based on sources, the household sector segment is expected to be the fastest-growing segment in the used cooking oil market during the forecast period.
• Region-wise, Europe was the highest revenue contributor in 2023.