Surge in Chinese Used Cooking Oil Triggers Heartfelt Plea for Increased US Tariffs

Chinese Used Cooking Oil Deluge Prompts Urgent Call for Boost in US Tariffs

As President Joe Biden gears up for a fresh wave of tariffs targeting China, a US soybean trade consortium is advocating for heightened levies on Chinese used cooking oil, arguing that it’s undercutting American crops crucial for biofuel production.

Representing major US soybean processors like Cargill, Bunge Global, and Archer-Daniels-Midland, the National Oilseed Processors Association (Nopa) is calling for tariffs exceeding the current 15.5 percent rate, as revealed in a communication sent to its members over the weekend, obtained by Bloomberg.

Flood of Chinese Used Cooking Oil Prompts Urgent Appeal for Elevated US Tariffs

Kailee Tkacz Buller, CEO of Nopa, clarified that the notice was prompted by speculation surrounding potential additional tariffs on used cooking oil. Nopa members advocate for tariff adjustments to align with other clean energy sectors, such as electric vehicles and solar, to ensure fair competition, Buller emphasized.

Soybean crushers are apprehensive about the influx of used cooking oil imports from China, fearing it’s dampening the demand for US crop-derived ingredients crucial for renewable diesel and sustainable aviation fuel. Moreover, there’s widespread, albeit unconfirmed, speculation that the Asian-sourced used oil may be adulterated with fresh vegetable oils like palm, potentially distorting market values and undermining US biofuel regulations.

Although soy oil values have dipped this year, recent activity in Chicago futures hints at a possible uptick as traders anticipate tariff-related developments. Biden’s upcoming announcement, slated for Tuesday, is anticipated to include tariff adjustments initially implemented during the Trump administration. Whether this includes measures concerning used cooking oil remains uncertain, with White House officials declining to provide insight.
For US growers of soy and other biofuel crops, the trade dynamics pose significant risks. Agriculture traders warn that these tensions could lead to friction between farm groups and biofuel producers, especially those benefiting from importing Chinese-used cooking oil.

The surge in US imports of used cooking oil, which more than tripled in 2023 compared to the previous year, with over half originating from China, is impacting processor profitability. This surge is causing disruptions for plants that crush whole soybeans to extract oil, resulting in some facilities slowing down operations.

Moreover, the influx of imports jeopardizes plans to expand US crushing capacity, a move crucial for capitalizing on government incentives aimed at promoting lower-carbon fuel production to combat climate change. As stakeholders navigate these challenges, the debate surrounding tariffs on Chinese-used cooking oil underscores the intricate interplay between trade policy, economic interests, and environmental objectives.