Global Competition for Waste Cooking Oil Intensifies as SAF Mandates Loom

Concerns are rising over the securement of raw materials, particularly waste cooking oil, as the aviation industry prepares for the mandatory blending of Sustainable Aviation Fuel (SAF). With increasing global demand and geopolitical factors impacting supply chains, governments are considering interventions to ensure sufficient feedstock for SAF production.

South Korea Considers Export Restrictions on Waste Cooking Oil

The South Korean Ministry of Climate, Energy and Environment is actively considering restrictions on the export of waste cooking oil, a key raw material for SAF production. This move aims to stabilize the domestic supply of scarce waste resources, including waste cooking oil and black mass from lithium-ion batteries, through revisions to existing laws. Detailed export restrictions will be specified in subordinate legislation following a review of circular use and industry feedback.

The Rise of SAF and its Blending Mandates

SAF, produced from sources like waste cooking oil, animal and vegetable oils and biomass, offers a significant reduction in carbon emissions – up to 80% compared to conventional jet fuel. South Korea plans to mandate a minimum of 1% SAF blending into international aviation fuel starting next year, with gradual increases to 3-5% by 2030 and 7-10% by 2035.

Supply Challenges and Raw Material Competition

A key challenge lies in securing sufficient raw materials. Replacing 1% of South Korea’s annual aviation fuel consumption (approximately 7 million tons) with SAF requires 70,000 tons of SAF production. However, with a waste cooking oil-to-SAF yield of less than 10% and domestic collection limited to around 200,000 tons annually, at least 700,000 tons of waste cooking oil would be needed if SAF were produced solely from this source.

The situation is exacerbated by increasing global competition for these resources, leading to a rise in exports of waste cooking oil from countries like South Korea. In the first half of 2023, South Korea’s waste cooking oil exports (95,240 tons) surpassed its imports (94,529 tons) for the first time since records began in 2012.

International Responses to Secure Feedstock

Several countries are already implementing policies to protect their domestic supply of raw materials for SAF production. China is incentivizing domestic use of waste cooking oil by limiting value-added tax refunds on exports, although Indonesia classifies waste cooking oil as a strategic resource, restricting exports to meet domestic quotas.

Proposed Legislative Changes in South Korea

A bill amending the Act on Transboundary Movement of Waste and Its Disposal has been proposed in the South Korean National Assembly. This amendment would allow for the banning or restriction of waste exports to stabilize domestic supply and demand. The Ministry of Climate Change will determine specific restricted items through implementing regulations.

Industry Concerns and Potential Benefits

Oil refining and aviation industries express concerns about securing sufficient raw materials to meet future SAF demand, particularly with potential increases in blending mandates. Increased domestic raw material availability would alleviate some of these concerns.

What is Sustainable Aviation Fuel?

Sustainable Aviation Fuel (SAF) is a liquid fuel used in commercial aviation that can reduce CO₂ emissions by up to 80%. It is produced from various feedstocks, including waste oil and fats, municipal waste, and non-food crops. SAF is designed as a “drop-in” solution, meaning it can be blended with existing jet fuel and used in current aircraft and infrastructure.