India’s push to reduce dependence on imported crude oil and expand domestic biofuel production is driving demand for used cooking oil (UCO), attracting major oil marketing companies and refiners to a largely fragmented collection market, The Malaysian Reserve.
India generates around 3 million tonnes of used cooking oil annually, but only about 5 per cent is collected, according to the SAF Association of India. An estimated 60 per cent re-enters the food chain for reuse, despite the practice being illegal.
The growing interest in UCO comes as India prepares to introduce a 1 per cent sustainable aviation fuel (SAF) blending requirement for international flights from January, with the target rising to 5 per cent by 2030. The country has also set a 5 per cent biodiesel blending target for road transport by the end of the decade.
State-run oil companies are stepping up procurement to secure feedstock. Hindustan Petroleum Corporation and Bharat Petroleum Corporation have sought a combined 83,000 tonnes of UCO through tenders, while Indian Oil Corporation had floated a smaller tender earlier this year.
However, collecting sufficient quantities remains a challenge because supplies are scattered across restaurants, hotels, food-processing units and households, with no centralised collection network.
M11 Energy Transition, one of India’s licensed UCO aggregators, has expanded its collection workforce from one person in 2022 to around 300 collectors across 24 cities, gathering approximately 1,000 tonnes monthly. Its chief executive Mannan Khan expects demand from Indian buyers to increase and plans to expand the company’s depot network.
Munzer Bharat, the Indian arm of Austrian biodiesel producer Munzer Bioindustrie, also collects around 900 tonnes of UCO monthly across more than 20 cities. The company sees India’s SAF blending mandate creating opportunities for organised collection and refining businesses.
Industry participants, however, face challenges in ensuring traceability and preventing fresh edible oil from being misrepresented as used cooking oil. The risk of mislabelling has gained attention in international markets, where UCO attracts a premium because of its use in biofuel production.
With domestic refiners competing alongside overseas buyers, benchmark prices of Asian used cooking oil have increased around 10 per cent this year, according to Argus Media. The expansion of India’s SAF and biodiesel programmes is expected to further strengthen demand, making efficient collection systems and reliable feedstock verification increasingly important.
