Charlene Trading
← All notes

UCO, tallow and soybean oil: who buys what in 2026

Mandates are growing faster than the feedstock available. Origin and paperwork weigh more and more on price.

· Charlene Trading

Used cooking oil

Used cooking oil (UCO) is still the preferred feedstock for the EU’s waste-based quota and for SAF. The EU imported 2.05 Mt in 2025, of which 829,000 t came from China, up from 478,000 t the year before. China removed its 13% export tax rebate on UCO in December 2024, and its exports kept growing anyway: January to May 2026 shipments were 1.37 Mt, up 37% on a year earlier, going to the US, the Netherlands, Italy, Canada, Singapore and Malaysia.

US UCO imports fell sharply in 2025 under tariffs and recovered in spring 2026, after the final RFS volumes and the oil shock. Gulf UCO reached about 86 cents a pound in May, the highest since that price series started, and was near 71 cents at the end of September. In Europe, industry reports put UCO delivered to Amsterdam-Rotterdam-Antwerp at $1,100 to $1,135 a tonne in the first quarter, close to a three-year high (secondary reporting).

Two rule changes split the market. The US 45Z credit no longer pays for UCO from outside North America, so imported UCO earns RINs and state credits but not the federal tax credit. In Europe, the end of double counting in Germany and the Netherlands shrinks the per-tonne premium of UCO-based fuel over crop-based fuel, while the volume needed goes up.

FeedstockMarketRecent priceReference
Used cooking oilUS Gulf71 ¢/lb86 ¢ in May
Yellow greaseUS65 ¢/lb
Bleachable fancy tallowChicago, renderer72-73 ¢/lb77.5 ¢ earlier
Soybean oilCBOT December67.55 ¢/lb79.69 ¢ on 1 June
Soybean oilWorld Bank forecast$1,233/t2026 average
Palm oilWorld Bank forecast$1,089/t2026 average

US prices around 28 September 2026 (Fastmarkets) and the World Bank’s April forecast.

Tallow and animal fats

Tallow is now a renewable diesel feedstock in its own right. According to press reports, Argentina’s beef tallow exports grew from about 7,000 t in 2015 to about 155,000 t in 2025. The US imported more than 880,000 t of tallow in 2024, with shipments from Brazil down and from Australia up. Australia sent 53% of its tallow to Singapore and 38% to the US in the first eleven months of 2025. European rules treat it less well: from 2026 the Netherlands counts Category 3 animal fat at half value, and Germany no longer counts it when it is co-processed in a refinery.

Vegetable oils

The US mandate shows up most in soybean oil. The price reached about 76 cents a pound in May, 56% above a year earlier, and USDA expects a 70-cent average for 2026/27. With US soybean oil exports nearly gone, importers look to South America. In May, Argentine soybean oil traded at its widest discount to US oil in at least ten years, helped by a large harvest and lower export duties. Palm is moving the other way: with B50, Indonesia keeps more of its oil at home.

Europe still runs mainly on rapeseed oil (USDA expects 6.1 Mt for biofuel in 2026) and UCO (5.1 Mt). Soybean oil use halved to about 350,000 t while the high-ILUC classification was under discussion. After the July vote, soy can stay in the market past 2030.

Soybean oil from Argentina and Paraguay has more buyers today than a year ago. US crushers’ oil stays in the US, Indonesia exports less palm, and the EU did not classify soy as high risk. Lower Argentine export duties from 2027 add to the margin. For UCO and tallow from the region, the competition is China and Australia, and documentation is what separates one cargo from another.

Paperwork is part of the product

Fraud cases in waste oils have changed how buyers check cargoes. ISCC suspended a certification body linked to a suspected fraud case in Germany in May 2025, and suspended a Swedish biorefinery for 40 days in June 2025. Germany now requires that inspectors can audit the supply chain on site. The Union Database is due to become mandatory, and from November 2027 importers must declare UCO that contains animal material. For soy and palm, EUDR due diligence starts on 30 December 2026. An ISCC certificate valid over the whole loading window, proofs of sustainability that match the bill of lading or truck waybill, and collection points that can be audited are what make a cargo count toward the buyer’s quota.

Sources