California is the largest consumer of alternative diesel fuels in the United States. A recent study published by the University of California Giannini Foundation of Agricultural Economics discusses U.S. imports of used cooking oil. The authors explain as follows:
“Clean fuel programs like California’s Low Carbon Fuel Standard have driven a boom in the consumption of biodiesel and renewable diesel, called BBDs. These policies have resulted in BBDs attaining a 70% market share in the California diesel market.
“Biodiesel is made from vegetable oils, beef tallow, and used cooking oil (UCO). The emissions of used cooking oil are around 50% less than soybean oil, the primary crop-based feedstock for biodiesel in California.
“The U.S. production of byproduct feedstocks cannot easily increase to meet rising biofuel demand. As a result, renewable fuel producers are importing millions of metric tons of used cooking oil from Asian countries to meet this demand.
“Imports of used cooking oil account for approximately 40% of U.S. consumption. U.S. imports of used cooking oil have surged dramatically in recent years, rising from negligible levels to over 1.4 million metric tons in 2023.
“These imports are valued at over $1.6 billion. China is the dominant supplier, accounting for over half of U.S. imports. China’s used cooking oil exports have grown at an unrelenting pace, averaging more than 30% annualized growth over the past five years.
“Demand from clean fuel programs has been so strong that the price of used cooking oil has frequently exceeded the price of virgin crop oils in UCO-exporting countries. (Virgin vegetable oils like soybean oil are associated with comparatively higher emissions than byproduct feedstocks.) Industry leaders and policy makers are concerned that used cooking oil collectors could be mixing in cheaper palm oil to boost their sales.
“Chinese policymakers suddenly ended the export tax credits for used cooking oil in mid-November 2024 to boost their domestic biofuel production and possibly limit government expenditures. Thus, policies that support Asian UCO could face an uncertain future.”
Swanson, Andrew, Shawn Arita and Joseph Cooper. “Controversies Surrounding U.S. Imports of Used Cooking Oil for Biofuel Production”
Agricultural and Resource Economics Update (Nov/Dec 2024) Vol. 28, No. 2. University of California Giannini Foundation of Agricultural Economics.
https://giannini.ucop.edu/filer/file/1734628708/21199/