D&W 
A Flood of Fraud: How Fake Used Cooking Oil is Undermining American Farmers and Used Cooking Oil Collectors
The U.S. biofuel industry is facing a crisis. A dramatic surge in imports of supposedly “used cooking oil” (UCO) from China is disrupting markets, hurting American farmers, and potentially undermining the Environmental Protection Agency’s (EPA) Renewable Fuel Standard (RFS) program. The problem? Much of this imported oil is suspected to be fraudulently labeled palm oil, masquerading as UCO to exploit government incentives and undercut American producers.
This influx of cheap, potentially adulterated oil has had a devastating impact on domestic UCO collectors and soybean farmers. U.S. collectors, who diligently gather used oil from restaurants and businesses, are being priced out of the market by Chinese imports. Meanwhile, soybean growers are facing reduced demand for soybean oil, a key ingredient in biodiesel production, as cheaper imports flood the market.4 This translates to lower soybean prices and financial hardship for farmers.
“Those two have kind of overwhelmed the soybean oil demand story,” says Dan Basse, president of AgResource Company, referring to imported UCO and tallow. This situation not only hurts American businesses and agriculture, but also threatens the integrity of the EPA’s RFS program, which aims to promote the use of renewable fuels. The RFS relies on accurate reporting and verification of renewable fuel feedstocks to ensure environmental benefits and prevent fraud. If a significant portion of the UCO being imported is mislabeled palm oil, it undermines the program’s goals and potentially allows for the exploitation of loopholes.
The Need for Verification and EPA Action
Addressing this crisis requires a multi-pronged approach focusing on verification and enforcement.
- Stricter Import Controls: The U.S. needs to implement more rigorous testing and verification procedures for imported UCO. This could involve advanced laboratory analysis to detect the presence of palm oil or other contaminants, as well as stricter documentation requirements to trace the origin of the oil.
- Increased Transparency: Greater transparency is needed in the UCO supply chain. Importers should be required to disclose the sources and processing methods of their products, allowing for better scrutiny and accountability.
- EPA Oversight: The EPA has a crucial role to play in ensuring the integrity of the RFS program. This includes investigating fraud allegations, enforcing non-compliance penalties, and working with other agencies to strengthen import controls.
- Supporting Domestic Production: Policy measures that support domestic UCO collection and biodiesel production can help level the playing field and reduce reliance on potentially fraudulent imports.
The EPA has already taken some steps to address the issue, such as proposing stricter record-keeping requirements for renewable fuel producers. However, more needs to be done to protect American farmers, UCO collectors, and the integrity of the biofuel industry. Senator Joni Ernst, Senator Roger Marshall and four other senators have penned two letters to the EPA citing the effects on soybean farmers of the surge in imported palm oil. The first letter in June of 2024 highlighted the issue and asked for action by the EPA. The second letter asked for a verification program and for the EPA to identify the actions taken.
The current situation highlights the vulnerability of the biofuel market to fraud and the need for robust oversight. By taking decisive action to verify the authenticity of imported UCO and enforce existing regulations, the U.S. can ensure a fair and sustainable biofuel industry that benefits American businesses, farmers, and the environment.
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