The used cooking oil market has gone from a back-of-house burden to a rising star. Once seen as waste, used cooking oil is now a hot commodity in the biodiesel, animal feed, and renewable diesel sectors. But what determines used cooking oil price?
Can restaurants really make money from used fryer oil? And what trends are driving prices higher?
Let’s break down the data, the rising demand, and the dollars.
What Is the Value of Used Cooking Oil?
On a per-gallon basis, restaurants typically receive between $0.25 and $0.50 for their used cooking oil across most of the United States. This baseline rate reflects standard market conditions and average oil quality.
However, pricing isn’t uniform nationwide. In regions with higher demand or more competitive collection markets, rates can climb to $0.75 per gallon or more. These premium rates are often found in major metropolitan areas or locations near biodiesel production facilities. Keep in mind that these rates generally apply to restaurants producing significant volumes, such as multi-location groups or single sites with five or more fryers in operation. Given that every collection company and region prices oil differently, knowing your local market value ensures you’re receiving fair compensation for your used cooking oil.
What Are the Key Factors Affecting Price?
1. Market Demand from Biodiesel and Renewable Diesel
Global biodiesel production continues to soar. Bulk used cooking oil is a critical feedstock in both renewable diesel and biodiesel, especially as government tax credits support lower-carbon alternatives to petroleum diesel.
This increasing demand is what makes UCO a valuable resource, especially for producing high quality biodiesel that reduces greenhouse gases.
2. Cooking Oil Quality and Contamination
The cooking oil worth depends heavily on purity. Clean yellow grease is desirable. Brown grease (from grease traps, with water or food debris) fetches less or requires payment for removal. That’s why proper processing, filtering, and handling of used cooking oil is essential.
Restaurants that implement a clean grease management program — avoiding contaminated bins or mixed waste — consistently get better rates.
3. Supply Limitations and Logistics
While demand grows, supply is constrained. Only so many restaurants, food processors, and commercial kitchens exist to generate used cooking fats. Moreover, transportation, storage, and collection costs factor into whether the price is profitable after pickup and processing.
Who Pays for Used Cooking Oil?
The buyers of used cooking oil operate in a two-tier market. First, used cooking oil collection companies provide rebates to restaurants. These collectors handle the labor-intensive work of picking up, transporting, and processing the oil—bearing most of the overhead costs in the supply chain.
Once collected and processed, these UCO companies then sell the clean oil to end users: primarily biodiesel producers and animal feed manufacturers. This two-step model allows restaurants to monetize their waste oil and benefit from the supply chain of used cooking oil market.
How Restaurants Make Money from Used Oil
Restaurants don’t technically sell their used cooking oil, instead, they receive rebates or credits through partnerships with collection services like Eazy Grease. This rebate structure compensates restaurants for providing a valuable commodity while the collection company handles all logistics and processing.
Your rebate amount depends on several factors:
Oil quality – Free of water, food particles, and other contaminants
Volume – Higher quantities command better rebate rates
Regional market conditions – Local demand and competition among collectors
Contract terms – Frequency of pickup and agreement structure
Collection infrastructure – Accessibility and efficiency of service in your area
In many regions, a restaurant producing 400–600 gallons per month can earn meaningful rebates—effectively turning waste into a revenue stream that offsets operational costs.
Where Does the Oil Go After Pickup?
Collected used cooking oil is refined and then transported to be converted towards:
Animal feed supplements (for non-contaminated batches)
Industrial lubricants and oleochemicals
This helps reduce reliance on fossil fuels, contributes to environmental benefits, and aligns with sustainability efforts worldwide.
Why Yellow Grease Is a Hot Commodity
Yellow grease (cooking grease or used cooking oil) is consistently in demand because it’s easy to process and suitable for alternative fuel sources. This material is traded globally and often carries premium pricing depending on current market dynamics.
Even canola oil or palm oil oil used in restaurants can yield strong yellow grease when managed properly.
Brown Grease vs. Yellow Grease
Yellow grease = cleaner, filtered oil from fryers
Brown grease = waste from grease traps, includes water, solids, and sludge
Brown grease is harder to repurpose, has limited market value, and often incurs a cost to remove. This is why grease haulers charge restaurants to pump out and clean grease traps.
Trends in the Cooking Oil Market
1. Global Expansion
The cooking oil market is growing, which increases the downstream volume of used cooking oil. With greater consumption, comes more opportunity for recovery and growth.
2. Government Incentives
Various government programs offer tax credits and incentives for using renewable energy and waste-based feedstocks. This enhances the value of fryer oil across all industries.
3. Data-Driven Pricing
Platforms like Argus Media and Fastmarkets now track UCO prices for the biodiesel industry, showing the commodity-like nature of yellow grease.
Conclusion: Cooking Oil Is Worth More Than You Think
Not long ago, restaurants paid to dispose of their used cooking oil. Today, that same waste stream generates revenue. As demand grows for biodiesel production, renewable diesel, and sustainable animal feed manufacturing, the value of used cooking oil continues to rise.
By understanding market dynamics, maintaining oil quality, and partnering with the right collection service, your restaurant can turn fryer waste into a meaningful revenue stream. It’s not just about sustainability, it’s about capturing value from a resource you’re already producing.
Ready to start earning rebates on your used cooking oil? Contact Eazy Grease for transparent rebates, reliable service, and a partnership that improves your bottom line.
