China’s used cooking oil (UCO) exports to the United States are poised to drop sharply in the coming months as new U.S. tariffs take effect, prompting Chinese suppliers to redirect shipments to Europe and other Asian markets.
The Trump administration has imposed a 125% import tariff on Chinese UCO starting this month, effectively closing off a market that accounted for $1.1 billion in shipments last year. According to UCO traders based in China, the last cargoes to the U.S. left ports in late March and early April before trade activity largely ceased.
Chinese customs data shows that China’s UCO exports reached a record high of nearly 3 million metric tons in 2024, valued at $2.64 billion. With the new tariffs in place, industry players say the arbitrage opportunity with the U.S. is no longer viable and is unlikely to resume in the near future.
Traders expect the surplus volume to be redirected to Europe and emerging markets in Asia, including South Korea, Thailand, Malaysia, and India.
At least four new Sustainable Aviation Fuel (SAF) facilities have started operations or are expected to come online this year in Thailand, Malaysia, and Japan, with a combined production capacity of at least 700,000 metric tons annually. These facilities use UCO as a key ingredient, offering alternative destinations for Chinese exports.
U.S.-bound UCO shipments had already started declining in December 2024, following the removal of Chinese export tax rebates and the implementation of the new U.S. clean fuel tax policy that discourages imports. The imposition of tariffs has intensified the trend. In response, the European Union, which now mandates a 2% SAF usage rate, is expected to become the primary destination for Chinese UCO exports in the months ahead.
Despite the drop in exports, domestic demand for UCO in China is rising due to the expansion of its SAF sector. Traders and industry officials estimate China’s UCO exports will fall to 150,000–200,000 tons per month from April, representing a 20–40% decline compared to average monthly volumes earlier in 2024.
New SAF facilities coming online in Zhejiang, Shandong, and other regions—including plants by Jiaao Enprotech, Haixin Energy Technology, Haike Chemical, and Blue Whale Bioenergy—are expected to increase local UCO consumption.
Currently, Chinese SAF producers consume about 100,000 to 120,000 tons of UCO per month, and that number is projected to grow as more plants commence operations. China also began a SAF pilot scheme in September 2024 at four domestic airports in Beijing, Chengdu, Zhengzhou, and Ningbo, further signaling a shift toward domestic use of UCO in clean fuel production.
