Rising Renewable Diesel Demand Is Pushing Up the Value of Used Cooking Oil
Used cooking oil isn’t just fryer waste anymore. It’s a feedstock in high demand. As renewable diesel production grows along the Gulf Coast, the used cooking oil (UCO) collected from restaurant kitchens is becoming more valuable. That shift is starting to show up in more fly-by-night collectors trying to steal restaurant used cooking oil.
Why Demand Is Climbing
Renewable diesel works just like regular diesel, but it’s made from fats and oils instead of crude oil. More trucking fleets, cities, and factories are using it. That’s partly because the federal government now requires fuel producers to blend in more renewable fuel each year. The rules got stricter for 2026 and 2027. Producers also get a valuable credit for every gallon they make, and those credits are trading near record highs right now. On top of that, Congress recently extended a tax credit for clean fuel production. All of this gives renewable diesel plants a strong reason to buy more feedstock — including used cooking oil.
Diesel Supply Is Also Being Squeezed by War
Rules aren’t the only thing driving this. Two wars are also tightening the diesel market. Since early 2026, the war between the U.S./Israel and Iran has disrupted oil tankers moving through the Strait of Hormuz. It has also knocked out refining capacity in the Middle East. At the same time, Ukraine has been striking Russian oil refineries. That pushed Russia to ban diesel exports for the rest of the year. Together, these two wars have taken about 5 million barrels a day of refining capacity off the market. U.S. diesel prices have jumped past $6.25 a gallon (as of September 2026) — more than 60% higher than a year ago. Diesel supplies are now at their lowest point since 1951. Renewable diesel doesn’t depend on Middle Eastern oil or Russian refineries. That makes it a safer bet for fuel buyers right now. And that’s pulling even harder on the supply of UCO here in Louisiana.
The Gulf Coast Is Ground Zero for This Growth
This growth is happening right here in Louisiana. Diamond Green Diesel runs one of the largest renewable diesel plants in the world just up the river in Norco. It produces about 690 million gallons of renewable diesel a year. A sister plant in Port Arthur, Texas adds another 470 million gallons. Together, these two plants can produce close to 1.2 billion gallons a year. Both run on waste fats and oils, including used cooking oil from local restaurants. When plants this big need feedstock, they look for collectors with steady, reliable supply. That means UCO from kitchens in New Orleans, Baton Rouge, and every parish in between.
What This Means for Restaurants and Food Service Operators
More demand for UCO generally means better rebates for the restaurants, schools, and food plants that produce it. The exact number still depends on your volume, your oil quality, and the wider commodity market. But the bigger picture is simple: used cooking oil has gone from a disposal problem to a real source of revenue. And that trend is only getting stronger as more renewable diesel and jet fuel capacity comes online along the Gulf Coast.
What to Do Now
If you’re not working with a reliable, licensed UCO recycler, now is a good time to fix that. If you already have one, it’s worth taking steps to make sure that your oil is secure, and thieves can’t steal it before your recycler gets to it and pays you for it. A reliable, established collector like Rebirth Biofuels can pick up your oil on schedule, pay you fairly, and get it into the renewable fuel supply chain — instead of losing it to spills, theft, or an unlicensed hauler undercutting the market.