Soybean Oil Biofuel Demand Redefines Global Waste-Feedstock Trade Flows
The global waste-feedstock market is undergoing significant changes as the US demand for soybean oil biofuel continues to rise. According to customs data, Chinese used cooking oil exports are pivoting towards Europe, while US buyers are diversifying their tallow supply base.
US imports of used cooking oil from China fell 61% year-on-year, with shipments to the Netherlands more than doubling. The displaced supply is now putting pressure on European and Southeast Asian markets. Meanwhile, Brazilian tallow exports remain largely US-bound but have eased by 14%.
The July WASDE report confirms that biofuel will account for a majority of US soybean oil use in 2026/27, rising from 11.8 billion pounds in 2024/25 to 17.8 billion in 2026/27. This is expected to lead to a structural tightness in the domestic soybean oil market.
The economics of the market are also being influenced by policy changes. The D4 RIN behaves as a policy-set level with a crush-driven wiggle, responding to changes in the HOBO spread. The removal of the ILUC penalty under OBBBA has compressed premiums for waste fats, but they remain wide.