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China’s Influx of Used Cooking Oil to the US Raises Concerns

(Bloomberg) — China is flooding the US with used cooking oil that the biofuel industry says may be tainted, hurting American farmers and President Joe Biden’s push to promote climate-friendly energy.

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US imports of used cooking oil, an ingredient to make renewable diesel, more than tripled in 2023 from a year earlier, with more than 50% coming from China, according to the US International Trade Commission. American industry groups and biofuel executives are becoming increasingly worried that a significant amount of those supplies are fraudulent, and are urging the government to tighten scrutiny on the imports.

The heightened suspicions come after the European biofuel industry expressed similar concerns about cooking oil from China last year. Used cooking oil has a better carbon intensity score than feedstocks widely produced in the US like fresh soybean oil, so any potentially tainted imports are benefiting from Biden’s renewables incentives at the expense of American farmers.

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Read More: Asia Floods Europe with Green Fuel Suspected to Be Fraudulent

“We’re putting more pressure on the US government to say what are we really importing,” said Todd Becker, chief executive officer of Green Plains Inc., which through its production of ethanol sells distillers corn oil, also a green diesel ingredient. “Somebody’s got to figure out that that’s not all Chinese used cooking oil.”

Tainted used cooking oil would exacerbate a challenging situation for farmers and agriculture companies. Companies including Bunge Global SA and Archer-Daniels-Midland Co. have been counting on soaring demand for crop-based green diesel feedstocks, but competition from foreign imports is eating into profits and jeopardizing ambitious expansion plans. More broadly, there is a risk that illegal shipments could worsen trade tensions between China and the US.

Imports of used cooking oil, or UCO, amounted to 1.4 million metric tons (3.1 billion pounds) in 2023 — equivalent to the oil squeezed from more than 6% of US soybeans crushed to make soyoil last season. In addition to having a more favorable carbon intensity score, UCO is also priced about a third cheaper than refined soyoil.

Ensuring Compliance with the Renewable Fuel Standard Program

Under RFS, producers using UCO or animal waste such as beef tallow are required to keep records that vow the ingredients meet the legal definition of “renewable biomass” as well as describe the ingredient and identify the process used to obtain it.

“We are concerned that unless EPA and other agencies get a handle on this pretty quickly, it could potentially undermine the integrity of the Renewable Fuel Standard,” Geoff Cooper, chief executive officer of Renewable Fuels Association, said in an interview.

Clean Fuels Alliance America, which represents renewable diesel and sustainable jet fuel producers, has been directed by its board to look into the surge in UCO from China and the possibility of fraudulent gallons coming into the US.

“Our goal is to protect our members and combat any unfair trade that we find,” said Paul Winters, director of public affairs and federal communications. “We aren’t assuming practices are unfair just because there’s more trade,” he said, but the alliance wants to make sure home-grown feedstocks aren’t facing unfair competition from imports.

The surge in UCO imports is also a top issue for NOPA, the trade group representing US seed processing industries for soybeans, canola and other crops. CEO Kailee Tkacz Buller said the group has had talks with federal lawmakers and agencies including the EPA and US Department of Agriculture.

Asia is by far the world’s biggest UCO supplier, led by China. The European Union initiated a probe into Asian imports last year at the request of European biodiesel producers, but the request was dropped. While the producers didn’t explicitly provide a reason for the change, they noted that biodiesel shipments to the EU from China’s Hainan Island — a green-fuel hot spot — immediately stopped after the start of the investigation.

“There is plenty of suspicion and lots of stories and anecdotes floating around,” said Cooper. “It appears to be one of the worst kept secrets out there that this is happening.”

–With assistance from Jennifer A. Dlouhy and Gerson Freitas Jr..

(Add comments from industry group beginning in 12th paragraph.)

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