Europe Takes China’s Used Cooking Oil, the US Takes Australia’s Tallow

BioRefineries/Renewable Fuel Production Business News/Analysis

October 25, 2026

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by David Alley (Fastmarkets) Shifting global feedstock economics are shifting trade. China’s UCO exports are up 55% on 2025, with Europe taking nearly twice the US volume, while tariffs have cut Brazil’s tallow shipments to the US by 44%.

From January to August, China exported 2.57 million tonnes of used cooking oil (UCO), up 55% on the same months of 2025. Europe took 850 kilotonnes of it, nearly twice the 452 kt that went to the US. Tallow runs the other way. Australia sent 85% of its tallow to the US, and Brazil’s shipments to the US fell 44% as American tariffs went up.

Used cooking oil from China

Chinese UCO exports reached 2,570 kt in January to August, against 1,656 kt in 2025 and 1,886 kt in 2024. The export tax rebate of 13% ended on 1 December 2024, and the volume has grown since.

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Europe is the largest destination. It took 850 kt, up 24% on 2025 and 33% of China’s total. The Netherlands received 534 kt, Italy 123 kt, Spain 99 kt and Belgium 40 kt. Norway took 27 kt and had taken none in the same months of 2025.

The US took 452 kt, up 56% on 2025 but 46% below the 832 kt of 2024. The monthly series is lumpy. Shipments reached 168 kt in June and fell to 12 kt in August, while Europe averaged 106 kt a month through the year.

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The US customs record shows the same picture from the buyer’s side. US imports of UCO were 1,271 kt in January to August, down 14% on a year earlier. China supplied 446 kt of that. Malaysia, at 207 kt against 144 kt, and Vietnam, at 84 kt against 30 kt, filled part of the gap. Part of what they ship will be Chinese oil refined or transshipped.

Chinese sellers also found new outlets. Canada received 263 kt, almost none of it before November 2025, at a steady 33 kt a month. Singapore and Malaysia took 632 kt, and the remainder went mainly to India, Korea and Thailand.

Prices explain why the US still attracts cargoes.

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That extra premium has to pay for a longer voyage and any duty. American buyers also cannot claim the 45Z production credit on oil from outside the US, Canada and Mexico since the start of 2026. Those two costs keep Europe, which has no comparable duty, the default home for Chinese cargoes.

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Brazil is the clearest case of tariffs moving trade. In 2025 it sent 348 kt of tallow to the US in January to August. In 2026 it sent 196 kt, 44% less, and its total exports fell to 232 kt from 356 kt.

Brazilian tallow exports

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The Supreme Court voided the emergency-powers tariffs on 20 February. Shipments to the US recovered from April, at 35 kt, then 21 kt in May and 50 kt in July. The price gap shows why. US Gulf delivered tallow stood $130 a tonne over Santos fob in January and $471 in March, and it held between $493 and $580 from May to August.

Europe cannot compete in that market. Northwest Europe delivered Category 1 and 2 mixed animal fat is assessed at $1,130 a tonne, which is about the Santos fob price of $1,160. A Brazilian cargo only goes to Europe when the US is closed. The European assessment covers a lower grade, so the comparison shows direction and not an exact margin.

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Australian tallow

Australia ships less tallow than a year ago, 267 kt against 304 kt, but it ships almost all of it to the US. The US share reached 85% in 2026, from 65% in 2025. Shipments to the US rose to 227 kt from 196 kt. Singapore and Malaysia took 236 kt in 2024 and only 28 kt this year.

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Duty is the difference from Brazil. Australian tallow pays the 12.5% forced-labour tariff and nothing else, on a fob price of $1,225 a tonne, with freight of $130 and duty of $153. It lands at 68.4 cents a pound. The California delivered price is 67.5 cents, a gap of 0.9 cents. That is close to parity, which is why it keeps coming. The US customs record shows 86% of Australian tallow entering at San Francisco, against 62% of Brazilian tallow at Port Arthur.

US tallow imports as a whole were flat, ...

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Used cooking oil from Australia and Brazil is small.

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Europe as a buyer

Europe buys UCO, not tallow, from these suppliers.

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Outlook

The US pulls a cargo when its price premium over origin exceeds the cost of getting there. That test now fails for Brazilian tallow, passes narrowly for Australian tallow, and is weakening for Chinese UCO. The three horizons below follow from it. Brazilian tallow, however, still makes money for US BBD producers at current prices.

The next quarter. Brazilian tallow priced in the spring is still landing in the US, so arrivals stay high for a few more weeks. After that they should fall. Santos would have to drop to about $1,061 a tonne from $1,160, or the US Gulf price rise by 6.2 cents, to restore the margin. The September cargo to Singapore and Malaysia is the first sign of where the surplus goes. Brazil’s own biodiesel plants are the other likely outlet, and Europe is not, because its delivered price leaves no margin.

Australian tallow sits one cent from parity. A cent a pound is $22 a tonne, so a small drop in the California price would send cargoes back to Singapore, as in 2024. Chinese UCO should keep a European base load of about 106 kt a month, with US shipments between a few kt and the June peak of 168 kt as the premium allows.

2027 and 2028. The 45Z credit expires after 2027 under current law, and Fastmarkets’ outlook assumes an extension. Without one, the credit that already excludes imported feedstock disappears for domestic feedstock too, and the relative value of imported fat is set by RINs and the California credit alone. The EPA has said it intends a RIN haircut on imported feedstock from 2028, which it dropped from the final 2026 and 2027 rule. A haircut would shrink the premium the US can pay for imports and push more Chinese and Brazilian cargoes toward Europe and Asia. READ MORE