Europe and Asia Pacific Used Cooking Oil Market Size, Share & COVID-19 Impact Analysis, By Source (Foodservice and Household), By Application (Industrial Usage, Animal Feed, and Others), and Regional Forecast, 2023-2030

The Europe and Asia Pacific used cooking oil market size was valued at USD 2.40 billion in 2022 and is projected to grow from USD 2.62 billion in 2023 to USD 4.98 billion by 2030, exhibiting a CAGR of 9.57% during the forecast period.

UCOs are oils and fats reused after processing, for cooking or frying in the food processing industry, restaurants, fast foods, and at the consumer level, in households. It contains impurities, such as Free Fatty Acid (FFA) and water, which must be removed before transesterification and reused the oil in different other applications such as animal feed, industrial usage, and others. Market players expand their collection points by providing transport for collecting used cooking oil. New and creative business models are being implemented to tackle the problems manufacturers face due to the COVID-19 pandemic. Innovation in the market has continuously grown in the last few years. Innovative marketing strategies are expected to expand manufacturers' Europe and Asia Pacific reach and offer them lucrative market opportunities during the forecast period.

COVID-19 IMPACT

COVID-19 Pandemic Declined the Demand for Used Cooking Oil, Restricting Market Growth 

With the global spread of COVID-19, the market experienced a steep decline in the CAGR in 2020. A decline of almost -28% was recorded in the year 2020 for this industry. At the same time, the post-pandemic reinvigoration of the food service industry suggests that the market could grow by a CAGR of about 9.5% from 2023 to 2030, despite the downturn. In Asia Pacific, all the hotels, cafes, and eating-out facilities in major economies such as China, India, Indonesia, the Philippines, and Australia were shut from March 2020 until August 2020 in the wake of the COVID-19 pandemic. Hence, sales of commercial dining services almost reached their all-time lowest levels impacting this industry significantly. In the Asia Pacific market, where the commercial segment holds a significant share of the UCO collection, the industry recorded the lowest collection volume of UCO in the year 2020 due to the closure of dine-in establishments.

The COVID-19 outbreak in Europe resulted in the closure of borders and the domestic food service market shutdown. The fall in travelers and visitors further impacted the major food service segment of tourism. Hence, the impact on travel and tourism led to the impact on the European foodservice market. With the food service market greatly impacted, domestic UCO collection was heavily disrupted in Europe, declining the market in 2020.

After the hard-hit two years of COVID-19, this industry is gearing up for lucrative opportunities in the upcoming years. The Biomass Board of Research and Development, U.S., predicted that the global biodiesel supply will reach nearly 50 billion liters by 2025. This forecast shows a silver lining for the biodiesel industry's growth in the coming years, which will benefit the industry resultantly.

LATEST TRENDS

Consumption of Sustainable & Green Energy Used Cooking Oil Products to Fuel Product Demand

Environmental sustainability has gained the utmost attention from industry stakeholders and consumers in the past few years and has gained enormous importance due to the constantly degrading environment caused by pollution, greenhouse gas emissions, and global warming. The awareness of the environment and sustainable lifestyle has begun the consumer trend of using sustainable products. Biofuel, such as biodiesel from used cooking oil, is one of the most expanding applications that fit the modern consumer demand for sustainable energy sources. In recent years, consumer preference has shifted from using petroleum diesel to biodiesel owing to its environmental welfare counterparts. Additionally, the growing awareness regarding food wastage among consumers and stringent safety regulations associated with the product contributes to the increased availability of used cooking oil for fuel production. This trend is expected to make household and commercial customers give the UCO for recycling, which will boost the market during the market forecast period.

DRIVING FACTORS

Increasing Utilization of Used Cooking Oil in the Biodiesel Industry Boosting Market Growth

Biodiesel is manufactured using different oils such as UCO, vegetable oils, yellow grease, and animal fats. The fuel is produced by a transesterification process that converts the oil into biodiesel. Biodiesel has the potential to compete with fossil fuels as it can be produced indigenously at a much lesser cost. The food service sector is one of the major industries in Europe and Asia Pacific that use vegetable oil for making food and generate a high volume of used cooking oil. With the growing number of fast-food restaurants, the generation of used type of cooking oil is also increasing substantially, making ample raw material available for biodiesel production.

Additionally, government policies in various countries, including India, Indonesia, Australia, and others, promote using UCO as an alternate feedstock and producing biodiesel by blending UCO with conventional diesel. According to the Government of India, the biodiesel procurement OMCs (Oil Manufacturing Companies) increased from 1.1 crore liters during 2015-16 to 10.56 crore liters during 2019-20. The demand is rising due to the usage of biodiesel as a fuel has increased in the automobile industry.

Increasing Awareness of  the Negative Environmental Impact of Waste Oil Drives The Market Growth

The increasing pollution, greenhouse gases, and global warming have attracted people's attention to environmental sustainability across the globe. When directly thrown into the drainage system, the used cooking oil pollutes water bodies, clogs the sewer system, and generates a heavy load on effluent treatment plants (ETPs). A liter of UCO can pollute 20,000 liters of water. According to the  FSSAI data, 60% of UCO in India is sold back to small food vendors, which then comes back to the plates and causes serious health issues.

Hotels, restaurants, food services, and European household customers have started to do their bit by reducing the disposal of used cooking oil and increasing support of composting and recycling, which aggravates the market growth. Recycling provides various benefits to the environment, such as reducing the amount of landfill space required for waste disposal, reducing the carbon footprint of companies, eliminating the excess release of carbon dioxide from used cooking oil, and limiting greenhouse gas emissions. With consumers getting aware of the hazardous effects of used cooking oil on health and the environment, the UCO collection is expected to grow in the upcoming years.

RESTRAINING FACTORS

Lack of Awareness and Challenges Faced in Processing of UCO to Impede Market Growth

Challenges in UCO processing and purification greatly constrain market growth, especially in underdeveloped and developing economies. High levels of unwanted free fatty acids and water are impurities in the oil and must be removed before transesterification, a critical refining process in biodiesel production. Large amounts of free fatty acids react with alkaline catalysts that inhibit the reaction, resulting in lower biodiesel yields. Due to the high impurities, its use in animal feed is also restricted for safety in a few countries. Biodiesel produced using high-impurity UCO can have lower combustion efficiency and engine power, impacting production.

In India, according to the Observer Research Foundation of large eateries in Delhi, Mumbai, and Kolkata, 53% of the eateries claimed that they dispose of UCO in drains. This claim of UCO being disposed of in drains has been a major challenge for the biodiesel manufacturers to collect the UCO.

SEGMENTATION

By Source Analysis

Foodservice Segment to Remain Dominant Due to Large Volumes of UCO Generation

Based on the source, the Europe And Asia Pacific used cooking oil market share is segmented into food service and household. Out of all the segments, food service holds the largest market share. The dominance of the food service segment is attributed to huge waste oil generation, thereby leading to a significant collection of the UCO from the food service operators.

The manufacturers try to collect more oil from restaurants, café, hotels, and others. Moreover, the government also takes the initiative to promote collecting used cooking oil from the food service industry through various schemes. The household sector is the potential source for collecting used cooking oil. Thus, the government is taking initiatives to collect used cooking oil from the household sector. For example, the European government has taken the initiative to launch Recoil, which aims to increase the sustainable biodiesel product using UCO collected from the household industry.

By Application Analysis

Animal Feed Holds a Major Market Share Due to High Usage in UCO

Based on application, the market in is divided into industrial usage, animal feed, and others. The animal feed segment holds the largest market share due to the effective use of UCO in animal feeds as a good source of essential energy and fatty acids. In many countries, UCO is considered one of the important elements of animal feed, acting as a cheap and high-energy additive, improving both the energy density and the binding of feed pellets. It has also been used as a supplement in creep feed, helping to support the growth and increase the weight of young livestock.

The industrial application segment is also expected to flourish in the market during the upcoming period. The development can be attributed to the industrial use of this type of oil in various industries such as cosmetics, chemicals, and pharmaceuticals. It is an important raw material for the latter mentioned industries as it contains fatty acids, glycerol, and other useful compounds that can be inured to produce a range of products such as biodiesel, soap,  and lubricants. In other segments, including plastics, cement & concrete, green solvent, and many more, the demand for used cooking oil is increasing due to the awareness of environmentally friendly products with low to no harmful environmental impact.

REGIONAL ANALYSIS

European Union is making significant efforts to increase renewable energy sources such as biodiesel production in Europe. According to the European Commission, biodiesel has largely replaced diesel consumption in EU27 countries. Governments in the region have policies to encourage collecting and disposing of cooking oil waste from cafes, restaurants, catering companies, and hotels. Promotional campaigns in the region that raise awareness of used cooking oil recycling are also driving the market growth in the region.

Asia Pacific is projected to grow at the highest pace in the global used cooking market throughout the forecasting period, owing to the region's increasing demand for biofuels and other sustainable energy sources. Asia consumes approximately 60% of the world's palm oil, and Indonesia, India, and China are among the world's top-consuming countries. The high use of palm oil in countries generates more use of cooking oil to support the market growth in the region.

In Asia Pacific, an increasing number of companies are entering the region's collection, refinement, and processing of waste cooking oil, augmenting the market growth in the region. Moreover, companies operating in North America and Europe invest in UCO procurement from Asian countries to fulfill their raw material demand for biodiesel production. Hence, the collection increased in the market.

KEY INDUSTRY PLAYERS

Key Players Focus on Expansion Of Businesses In New Geographies to Stay Competitive

The industry comprises local as well as international players, and the number of local players exceeds the number of international players. Local players continuously try to expand their inter-country business footprint in new countries. The prominent names in the industry, such as Aris Bio Energy Pvt. Ltd., Arrow Oils Ltd, and Greenlife Oil Holdings, Valley Proteins Inc., Proper Oils, Baker Commodities, are focused on product processing in the proper manner of upcycling the product to create bioproducts such as biodiesel, bio candle, and others in the marketplace. Moreover, the prominent players are continuously innovating their products and increasing their market position and propelling Europe and the Asia Pacific used cooking oil market growth.

List of Key Companies Profiled:

• Aris Bio Energy Pvt. Ltd. (India)


• Oz OIls Pty. Ltd. (Australia)


• ABP Food Group (Ireland)


• Lengis Hijau (Indonesia)


• Arrow Oils Ltd (U.K.)


• Brocklesby Limited (U.K.)


• Greenlife Oil Holdings (Australia)


• RMC Oil & Ecosolutions, Inc. (Netherlands )


• Medan BIO (Indonesia)


• Auscol (Australia)

KEY INDUSTRY DEVELOPMENTS:

• March 2022: Aris Bioenergy announced it would invest USD 30.44 million in its biodiesel plant. The company plans to set up 20 bio-diesel plants over the next 5-6 years, and it is in the final stages of setting up its first plant near Khopoli, an industrial township located in Maharashtra.


• February 2022: 'St1 Nordic Oy', an energy company based in Finland, acquired 100% of Brocklesby Ltd. Brocklesby is an expert in recycling used cooking oil and fatty food waste.


• November 2020: Lengis Hijau launched the Green School Bio Bus to transform transportation in Bali and inspire the world to live sustainably and educate dynamically. Its mission is to provide sustainable transport services and spread awareness about health and waste problems associated with using used cooking.


• October 2020:, Veolia Environment S.A. acquired a 29.9% stake in Suez S.A. Veolia offers energy, waste, and water management systems. Suez offers resource recovery, waste management, and water management services in Australia.


• January 2020: BioD Energy, an Indian biodiesel producer, announced starting two new biodiesel processing plants that manufacture biodiesel using waste cooking oil. Since its inception in 2018, the company has sold over 15 million liters of biodiesel until 2020.

REPORT COVERAGE

The market research report provides detailed market analysis, market segment and focuses on key aspects such as market share, key players in the used cooking oil, help to reduce greenhouse gas emissions,  competitive landscape, source, and application. Besides this, the report offers key insights into the market trends and highlights key industry developments. In addition to the abovementioned factors, the report encompasses several factors contributing to the market's growth over recent years.

Report Scope and Segmentation: