India Used Cooking Oil (UCO) Market- Trend Analysis & Forecasts

Market/ Product Overview

India’s used cooking oil market sits at an important inflection point as the country continues to consume 23–24 million tonnes of edible oil annually, with palm oil alone accounting for over 8.5 million tonnes per year. This high consumption directly correlates with rising UCO generation, which was estimated at ** million tonnes in 2024, providing a substantial raw material base for biodiesel manufacturers. The market has grown rapidly due to structured collection models introduced under the Food Safety and Standards Authority of India (FSSAI) “Repurpose Used Cooking Oil” (RUCO) initiative launched in 2018. The RUCO network expanded from 64 certified aggregators in 2019 to more than 220 in 2024, indicating a strong regulatory push to formalize waste oil flows.

The commercial food sector, contributing nearly **% of the total UCO generated in India, has grown steadily, with the restaurant and QSR industry reaching US$ ** billion in 2023, a significant rise from US$ ** billion in 2019. These expansions have increased demand for structured UCO collection, as enterprises typically generate **–** kg of UCO per day, depending on scale. Despite this large potential, only **–**% of India’s UCO is formally collected, leaving a considerable supply gap for biodiesel plants that collectively possess a refining capacity exceeding ** million tonnes annually, according to 2024 industry estimates.

India’s biodiesel demand is increasing due to its rising diesel consumption, which crossed ** million tonnes in FY 2023, with the government targeting higher blending to reduce crude oil imports worth US$ **–** billion annually. UCO-derived biodiesel production increased from ** thousand tonnes in 2020 to over ** thousand tonnes in 2024, demonstrating a doubling of output in four years. This upward trajectory, supported by private refinery investments—such as Universal Biofuels’ US$ 30 million capacity expansion in 2023—positions UCO as a strategic feedstock for the next decade.

Significance of India in Global Used Cooking Oil (UCO) Supply Chain

India’s role in the global UCO ecosystem is becoming increasingly important due to its status as one of the world’s largest edible oil consumers and importers, with US$ 20–25 billion of annual vegetable oil imports. This creates a massive foundation for UCO generation, making India a potential supplier capable of displacing traditional exporters such as Malaysia, Indonesia, and China. Global UCO demand, projected at ** million tonnes by 2030 from the current 5.8–6 million tonnes, is being propelled by the EU, which alone imported 2.2 million tonnes of UCO in 2023 due to strict mandates such as the Renewable Energy Directive II (RED II). India’s rising UCO output could contribute up to 8–10% of the world’s export supply by 2032, up from less than 1% in 2020, positioning the country as a crucial player in the global renewable feedstock market.

Additionally, biodiesel producers in Europe and the United States are increasingly relying on Asian UCO due to steep price escalations in local markets, where UCO prices reached US$ 900–1,050 per tonne in 2024, compared with US$ 620–720 per tonne in India. This arbitrage strengthens India’s export competitiveness, prompting major global refiners—such as Neste, Eni, and Cargill—to explore long-term sourcing partnerships. India’s strategic advantage also lies in its large network of food service enterprises, numbering over 20 million establishments, including small eateries, cloud kitchens, and street vendors. Even if 5% of these establishments participate in formal collection by 2030, the country could supply more than ** million tonnes of UCO annually to global biofuel markets. India’s upward trajectory is therefore anchored in scale, regulatory initiatives, and widening global demand gaps.

India Used Cooking Oil (UCO) Supply & Demand Trend

The supply side of India’s UCO market is expanding due to increasing edible oil consumption, which grew at a **% CAGR between 2019 and 2024. With annual demand now exceeding ** million tonnes, India generates an estimated ** million tonnes of UCO, although only ** thousand tonnes reach formal aggregators. Most supply comes from commercial kitchens, restaurants, hotels, and institutional caterers, which collectively use 7–10% more edible oil each year due to rising consumer spending. Household UCO, which accounts for **% of total generation, remains largely uncollected due to logistical limitations, indicating a significant untapped volume of nearly ** million tonnes.

On the demand side, India's biodiesel production capacity reached ** million tonnes in 2024, with nearly **% dependent on UCO and other waste oils. This demand is rising as companies scale operations in response to national biofuel targets under the 2021–2030 roadmap. Industrial demand also comes from oleochemical manufacturers and pet food processors, which collectively consume ** thousand tonnes of UCO annually. Export demand has strengthened as well: India exported ** thousand tonnes of UCO in 2023, up from ** thousand tonnes in 2020, demonstrating nearly 3x growth in less than four years. As domestic blending mandates increase, UCO’s share in biodiesel feedstock could rise from the current 14–16% to nearly 30% by 2032, requiring new collection networks and logistics infrastructure.

Given that India's biodiesel demand is projected to reach 3.5 million tonnes by 2032, the UCO market will face a supply deficit unless collection rates improve. This imbalance, estimated at ** million tonnes by 2030, strengthens investor incentives to expand collection systems, integrated logistics, and decentralized pre-processing hubs. The supply-demand gap is therefore the market’s defining opportunity.

India Used Cooking Oil (UCO) Market Growth Factors

India Used Cooking Oil (UCO) Market Segmentation

The India UCO market is typically segmented by source, end-use, collection model, and region, each displaying distinct growth patterns. By source, the commercial food sector dominates UCO supply with **% share in 2024, followed by households at **%, though less than**% of household UCO is formally collected. Hotels and restaurants collectively generate nearly ** million tonnes per year, driven by a sector that grew at 11% CAGR over the past five years. Industrial canteens and catering services add another ** thousand tonnes annually, making them important nodes for aggregators focused on bulk supply.

By end use, biodiesel manufacturing is the largest consumer, absorbing **% of formally collected UCO in 2024, up from **% in 2020, driven by rising diesel demand, which surpassed ** million tonnes in FY 2023. The oleochemical sector consumed **%, using UCO for lubricants, surfactants, and soaps, while the pet food and feed industry accounted for **%, though this segment grew at **% CAGR, reflecting rising demand from the USD ** billion Indian pet food market.

Collection models vary significantly across regions. Organized networks dominate Tier 1 cities, where average collection volumes exceed ** thousand tonnes per month, supported by digital traceability platforms. In Tier 2 and Tier 3 cities, informal collectors handle over **% of UCO flows, although their rates are gradually declining due to FSSAI-led enforcement. Regionally, South India leads with **% of total UCO supply, attributed to high edible oil usage in Tamil Nadu, Karnataka, and Telangana, which collectively consume over ** million tonnes annually. West India follows with **%, driven by Maharashtra and Gujarat, while North and East India contribute **% and **%, respectively, reflecting differences in cuisine patterns and food service penetration.

On a market value basis, South and West India together account for INR ** crore in 2024, propelled by proximity to major biodiesel plants located in Andhra Pradesh and Gujarat. As collection networks expand, untapped regions—especially rural belts with household consumption of 10–12 kg of edible oil per capita annually—present significant growth opportunities.

India Used Cooking Oil (UCO) Trade (Export & Import) Trend

India’s UCO trade has grown significantly over the past five years, with exports rising from ** thousand tonnes in 2020 to ** thousand tonnes in 2023, marking nearly 190% growth driven by European demand. Export revenue reached US$ ** million in 2023, up from US$ ** million in 2019, reflecting improved traceability and certification systems under RUCO. The EU remains the largest buyer, accounting for 74% of India’s UCO exports, led by Netherlands, Spain, and Italy, whose biodiesel plants collectively process nearly ** million tonnes of waste-based feedstock annually. The U.S. imported **% of India’s UCO exports after tightening sustainability criteria under Renewable Fuel Standard (RFS II) compliance.

India imposes a 0% export duty on UCO to encourage global trade, while imports face safeguards to prevent contamination and fraud. Domestic biodiesel manufacturers imported ** thousand tonnes of waste oils in 2023—mainly palm fatty acid distillate (PFAD) and acid oils—to supplement feedstock shortages, with import values rising to US$ ** million.

Tariff structures shape competitiveness: European imports face certification costs of US$ 40–60 per tonne, while UCO imported to India attracts basic customs duty up to 35%, depending on grade. Trade with Southeast Asian nations is also rising; Malaysia and Singapore exported ** thousand tonnes of processed UCO to India in 2023, primarily for re-refining. India’s participation in low-carbon fuel supply chains is expected to intensify as global demand exceeds ** million tonnes by 2030, with China reducing UCO exports from ** million tonnes in 2020 to ** thousand tonnes in 2023, creating openings for India.

Influence of India in Global Used Cooking Oil (UCO) Price

India’s influence on global UCO prices is growing due to its expanding supply potential and cost advantages. In 2024, global UCO prices averaged US$ 900–1,030 per tonne, while Indian prices ranged between US$ 620–720 per tonne, enabling exporters to offer competitive rates. As India scales exports from the current ** thousand tonnes to a projected ** thousand tonnes by 2032, the country could account for 10–12% of global traded volumes, giving it moderate price-setting power.

Historically, global UCO prices rose from US$ 540 per tonne in 2018 to US$ 960 per tonne in 2022, driven by U.S. and EU biodiesel mandates. India’s domestic prices followed a similar pattern, increasing from INR 30 per kg in 2018 to INR 48–55 per kg in 2024. As collection improves, domestic supply could increase by ** million tonnes by 2032, exerting downward pressure on global prices by expanding low-cost feedstock availability.

Price sensitivity is highest in Europe, where tightening RED II regulations pushed average UCO CIF prices to US$ 1,020 per tonne in 2023, compared with US$ 890 per tonne in 2021. If India expands exports as projected, analysts expect global prices to moderate by 2–4% annually from 2026 onward. India’s impact on long-term pricing will therefore stem from scale, compliance reliability, and export capacity.

Market Competitive Landscape

Future Outlook

The India UCO market is positioned for strong expansion, driven by structured collection systems, rising biodiesel mandates, and increasing global demand for waste-based feedstocks. The market size, valued at US$ ** million in 2024, is projected to grow at **% CAGR over the next eight years, reaching US$ ** billion by 2032. Annual UCO availability is expected to rise from ** million tonnes today to more than ** million tonnes by 2032, supported by edible oil consumption crossing ** million tonnes due to demographic and income growth.

Formal collection rates are forecasted to increase from 14% to 45% by 2032, translating into more than ** million tonnes of structured supply, enough to support domestic biodiesel output of ** million tonnes annually. Export volumes could rise seven-fold to reach ** thousand tonnes, generating US$ ** million in foreign exchange. With policy reforms expected under India’s 2030 biofuels roadmap and FSSAI’s enforcement tightening, UCO will play a critical role in India’s low-carbon transition, energy diversification, and global sustainability footprint. The next decade offers a major opportunity for companies that invest early in logistics, quality control, and international certification.