By Emily Chow
KUALA LUMPUR (Reuters) - Once surreptitiously dumped down drains in the dead of night, Asia's used cooking oil is fast becoming one of the most sought-after commodities in Europe - as a feedstock for biodiesel.
Aggressive green energy targets in the European Union that were bolstered further this year are pushing fuel makers to churn out biodiesel containing recycled cooking oils and fats, phasing out the use of fresh vegetable oils in the process by 2030.
That has unleashed a wave of demand for used oil from places such as China and Southeast Asia, where cooking oils are widely used to prepare everything from stir-fries to piping hot samosas.
Amizuri Abdullah, who picks up used oil from restaurants, fast food outlets and food factories for Malaysian waste oil collection firm FatHopes Energy, said his job had been getting markedly busier.
"When I first joined the company a year ago, there were about 15 or 16 stops to make in a day. Now there can be as many as 25, and more people are asking about it," said Amizuri, who wears bright blue protective gloves to pump used oil into a tank on the back of his truck on the outskirts of Kuala Lumpur.
The oil is unloaded at a collection center where it is filtered to remove food scraps like chicken bones and skin, before being processed to reduce contamination. It is then transferred into tankers for export to Europe.
FatHopes Chief Executive Vinesh Sinha said the company's exports of waste-based feedstock to European oil majors had grown 40 percent in the last three years, forecasting a threefold increase in Europe's demand for such feedstock by 2030.
Used cooking oil makes up a good chunk of what the company collects from thousands of sites across Southeast Asia, but it also buys coffee grinds, animal fats and palm oil mill waste.
"My clients are struggling to find feedstock in anticipation of the EU policy," he said.
(GRAPHIC: Biodiesel production by region since 2000 - https://tmsnrt.rs/2oYrmJI)
GOING UP
Asia's used cooking oil industry was estimated to be worth around $500 million a couple of years ago, but analysts said more recent estimates were not available due to the rapid growth in the number of new collectors and traders.
Justin Yuan, chief executive of the used cooking oil division at Chinese consulting company STIN Group, said shipments from China would likely hit 300,000 tonnes this year, up from 200,000 tonnes in 2017.
He said most cargoes go to Europe and that volumes were set to keep surging in coming years.
"More overseas biodiesel plants will source used cooking oil in China. With soaring demand from home and abroad, it will put great pressure on used cooking oil supplies," Yuan said. "The competition will be fiercer."