Why Demand for Sustainable Feedstocks is Driving Used Oil Utilization

Introduction: Why Sustainable Feedstocks are Increasing the Importance of Used Oil Utilization

There is something going quietly but surely in the world of industrial raw materials. The grease in your samosas, the oil that lubricated factory floors, it's no longer a byproduct of progress, but a resource, and a strategically important one at that. The used cooking oil  is one of the most closely watched segments of the renewable feedstock space, as demand grows steadily upwards as industries try to green their supply chains. It's not just about recycling; it's about the economics of green production itself.

Overview of Used Oil as a Renewable Feedstock: Sources, Characteristics, and Industrial Applications

There are two main categories of used oil: cooking and food processing waste, also known as yellow grease or used cooking oil, and used industrial or automotive lubricating oils. Every type of used oil has its own set of properties, such as fatty acid levels, moisture, and impurities. Despite the quality of the used oil, there is one quality common to both categories: it is a source of stored energy and carbon, which has already been processed once. For many industries seeking to reduce their consumption of virgin materials, used oil is an attractive place to begin.

Role of Used Oil in Supporting Sustainable Production: Biofuels, Oleochemicals, and Circular Resource Utilization

The two largest end-use segments for used oil are biofuels and oleochemicals. In the biofuel segment, the used oil is converted into biodiesel or hydrotreated vegetable oil, which has a lower lifecycle climate impact than diesel. In the oleochemical segment, the fatty acid chains in the used oil are used to produce soaps, surfactants, lubricants, and plastics, often as a direct substitute for virgin sources such as palm and soy. In short, the two segments place used oil firmly at the center of the vision for a truly circular economy, in which waste products from one cycle feed into the material base for the next.

Key Drivers Accelerating Demand: Decarbonization Goals, Regulatory Incentives, and Corporate Sustainability Commitments

There are three forces that are driving the timelines here. There are decarbonization targets at the national level and the regional level, especially in the EU and the U.K. There is also a regulatory framework, especially the EU's Renewable Energy Directive II, which gives used cooking oil a favorable carbon intensity score. Finally, there are also multinational companies that have pledged to reduce their Scope 3 emissions, and used cooking oil is a lever they have the ability to pull quickly. Take, for instance, the fact that Neste, which is the world's biggest manufacturer of renewable diesel, has pledged that used cooking oil is a critical part of their raw materials.

(Source: Neste)

Industry Landscape: Role of Waste Collection Companies, Biofuel Producers, Industrial Manufacturers, and Regulatory Bodies

The used oil supply chain has a multi-layered set of players. At the top of the funnel, the waste collection companies act to gather the used oil supplies from the restaurant, food processing, and service station industries, often on a contracted basis. The biofuel and oleochemical industries are the major off-takers, buying the used oil, either treated or not. The industrial manufacturers use the treated derivatives in their formulations, and the regulatory agencies set the "rules of the road" on what is deemed to be "sustainable" and eligible for incentives, and the documentation and tracking requirements.

Implementation Challenges: Feedstock Availability, Quality Variability, and Supply Chain Logistics

Theory is much easier than the reality. The dispersed nature of used oil, collected over thousands of restaurants, factories, and garages, makes aggregation a challenge. The quality of the used oil differs depending on the source. Cooking oil from a fish and chip shop has a very different composition to industrial oil. The infrastructure for collecting used oil still has to be developed in some geographies. There has been some evidence of fraudulent use, where some players have been found to be passing off their virgin palm oil and claiming the environmental and regulatory advantages of used cooking oil.

Future Outlook: Expansion of Waste-to-Energy Solutions, Advanced Processing Technologies, and Strengthened Circular Economy Integration

The trend is unmistakably upward. The development of hydrotreating technologies continues to improve the ability to process lower-grade feedstocks at economically viable costs. Waste to energy systems continue to expand collection infrastructure, including in emerging markets where there is considerable food service activity. Circular economy policy initiatives, especially in Europe and increasingly in Southeast Asia, continue to build used oil into national resource strategies. The feedstock challenge will only continue to fuel the need to improve sorting, collection, and pre-treatment infrastructure.

Conclusion

The evolution of used oil from a waste issue into a valuable resource is, however, part of a larger phenomenon. The industrial world is beginning to learn how to think of its waste streams as assets. While this process will not be automatic or uniform, the forces being brought to bear under the rubric of sustainable feedstocks make it increasingly difficult to look away. To both business and government, the supply chain for used oil is not a specialized topic, but a practical imperative.

FAQs

• Is used cooking oil better for the environment than virgin vegetable oil? 
  • Generally, yes. This is because it does not involve the greenhouse gas emissions associated with cultivating new crops. However, the distance the oil has to travel to get to the recycling center does have a big impact on the environment. 
• Are all used oil collectors equally reliable in terms of quality? 
  • No. There is a lot of variation in the way used oil is collected. In recent years, buyers have been using traceability schemes such as ISCC or RSB to ensure that the used oil being bought is of a defined quality and sustainability. 
• Can all used oil be recycled, or is there some oil that does not qualify? 
  • Most plant-based used cooking oil is recycled into biofuel or oleochemicals. Degraded oil, oil mixed with water, or oil from industrial sources may need to undergo extra processing.