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Welcome to the SDGs in the NEWS podcast. This is Susan Yoshimura, Managing Editor of Japan 2 Earth, coming to you from Tokyo. Today, we bring you another English article on Japan and the SDGs. You can find the full text on our website. Just click the link in the episode notes. Have a listen.
Used cooking oil, major players in Japan compete with foreign companies for supply.
Fierce competition and rising prices for exports of used cooking oil from Japan are linked to the growing demand for alternative aviation fuels like SOF.
Securing the raw material is said to be the biggest hurdle. The type of SOF that JGC Holdings is working to develop from UCO leads in the race for commercialization. But securing suppliers of raw material still requires efforts, according to a company representative.
The quality of waste oil coming from Japan has led to strong demand from overseas SOF businesses. This intensified competition is resulting in higher prices.
According to UCO Japan, 380,000 tons of used cooking oil was collected and processed in Japan in fiscal year 2021. Of this, 250,000 tons was used as raw material for livestock feed, ink, and other products. The remaining 130,000 tons was used as raw material for fuel, of which an overwhelming 120,000 tons was exported overseas.
Amounting to nearly one-third of the total oil collected, exported UCO increased by 30,000 tons from 2020s figure, 90,000 tons.
The trend was exacerbated by a decreased supply from restaurants amid the COVID-19 pandemic. The export price per kilogram soared from 78 Japanese yen and 70 sen in January 2021 to 199 Japanese yen and 10 sen in October of 2022, a 2.5-fold increase. While domestic trade prices have also been on the rise, exports are priced even higher.
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In Japan, used cooking oil is considered waste and collected free of charge by licensed companies under the Waste Management and Public Cleansing Law.
However, Xiaomi points out that unlicensed companies are attempting to take advantage of rising prices and demand from the SOF industry. They are circumventing the law and buying the oil as a commodity instead of collecting it as waste. This, he says, has spurred the price increase.
Due to superior refining, transportation, and processing technologies, Japanese used cooking oil is of high quality. According to a transportation industry representative, UCO becoming a commodity is inevitable in the current environment where foreign firms are competing for the oil.
JGC Holdings' collection business will involve a certain amount of fees. But a company representative asserts, our emphasis will be on local production for local consumption, rather than putting a price on used cooking oil. We want everyone to understand this importance.
Ryuichi Kurokawa, chief researcher at Japan Transport and Tourism Research Institute, JITRI, points out that there is a limit to the amount of UCO that can be procured. Likewise, he notes that only a small amount can be converted to SOF.
According to Kurokawa, Japan should consider procuring from other Asian countries for the time being. Meanwhile, we should aim to commercialize highly efficient SOF made from hydrogen and carbon dioxide. We must promote its development at the same time, he urges.
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