India steps up used cooking oil purchases for biofuel production

India is increasing purchases of used cooking oil (UCO) for biodiesel and sustainable aviation fuel (SAF) production amid tighter government biofuel requirements. State-owned companies Hindustan Petroleum and Bharat Petroleum have launched tenders to purchase a combined 83 thsd tons of used cooking oil, with bidding deadlines set for October. Indian Oil also conducted similar purchases earlier this year.

Growing demand is linked to the Indian government’s efforts to reduce dependence on imported crude oil, which accounts for around 90% of the country’s requirements. From January 2027, international flights departing India will be required to use fuel containing at least 1% SAF. The government plans to increase this share to 5% by 2030, alongside a 5% biodiesel target for road transport. According to S&P Global, India’s SAF demand could reach 250 thsd tons by the end of the decade.

Meanwhile, India has significant untapped potential for producing biofuels from used cooking oil. The country generates around 3 mln tons of this feedstock annually, but according to India’s SAF Association, only about 5% is collected through organized channels. An estimated 60% of used cooking oil re-enters the food chain despite regulations prohibiting such reuse. The lack of a centralized collection system remains one of the main obstacles to industry development.

Amid rising demand, companies are actively expanding their feedstock collection and processing networks. India’s M11 Energy Transition currently collects around 1 thsd tons of used cooking oil per month across 24 cities and plans to increase its collection depots to 50 by the end of the year. Austria’s Münzer Bioindustrie is also expanding its operations in India, collecting around 900 tons of used cooking oil monthly across more than 20 cities. According to Argus Media, benchmark prices for seaborne used cooking oil from Asia have risen by approximately 10% since the beginning of 2026.

Growing domestic consumption could intensify competition for feedstock between Indian and international biofuel producers. Currently, a significant share of used cooking oil collected in India is processed into biofuels exported to Europe and the US, but the development of the domestic market is gradually changing trade flows. According to Argus Biofuels Analytics, global demand for sustainable aviation fuel could surge by 600% to 14 mln tons by 2035, supporting further growth in the used vegetable oil market.

Tags: biofuel, UCO, used cooking oil, India