Asian UCO prices hit over 2-year high driven by stronger demand, policy changes

Asian used cooking oil prices hit a more than two-year high Jan. 23, driven by stronger demand in the EU and the Chinese domestic market, and the cancellation of China's export tax rebate.

Platts, part of S&P Global Commodity Insights, assessed UCO North Asia at $1,015/mt FOB China on Jan. 23, the highest since $795/mt on Nov. 14, 2023, and UCO FOB Straits at $1,010/mt, the highest since $790/mt on Nov. 3, 2023.

UCO demand has risen as the EU seeks feedstock volumes after imposing anti-dumping duties of up to 36.4% on cheaper Chinese biodiesel imports in August 2024. The EU's fuel uplift mandate of at least 2% sustainable aviation fuel at airports beginning in 2025 has also aided UCO demand.

Meanwhile, China's broader biofuel strategy includes a 2025 SAF consumption target of 50,000 mt, requiring an estimated 3 million mt of UCO at least. The country also plans to introduce an export quota for B24 biodiesel-blended marine fuel in 2025 to help local biofuel producers impacted by the EU anti-dumping tariffs.

China's ending of 13% export tax rebates on biofuel feedstock effective Dec. 1, 2024, has also led to a surge in UCO prices due to concerns about tighter supplies globally.

Consequently, some European importers have sought alternative sources of biofuel feedstock from other countries.

Market sources expect UCO prices to continue their upward trajectory in 2025, as overall demand strengthens.