This might sound like a routine government report. But for anyone collecting used cooking oil, it is one of the clearest indicators of where feedstock demand is heading.
What the EIA is saying
The EIA's Short-Term Energy Outlook is the federal government's best estimate of where energy production and consumption are heading over the next two years. When the agency raises its production forecast for renewable diesel and biodiesel, it is telling the market that more fuel is expected to be produced than previously anticipated.
This comes on the heels of the EPA finalizing the highest biofuel blending mandate in the 20-year history of the Renewable Fuel Standard. The "Set 2" rule requires biodiesel and renewable diesel production to increase by over 60 percent compared to 2025 levels. The EIA's updated forecast reflects the market beginning to respond to that mandate.
Renewable diesel production has already been on an upward trajectory. The EIA previously projected renewable diesel output to reach 290,000 barrels per day in 2027, up from 250,000 barrels per day in 2026. Biodiesel production was expected to hold at 100,000 barrels per day. The April update pushes those 2027 numbers even higher.
Why this matters for UCO collectors
Renewable diesel and biodiesel are made from the same core feedstocks: used cooking oil, animal fats, and soybean oil. When the government projects more production, it is projecting more demand for those raw materials.
Used cooking oil has a significant advantage in this equation. It carries one of the lowest carbon intensity scores of any feedstock, which makes it especially valuable under programs like California's LCFS, New Mexico's new Clean Transportation Fuel Program, and the federal RFS. Producers chasing credits and compliance value are going to prioritize UCO over higher-CI alternatives whenever they can source it.
Higher production forecasts mean more plants running at higher capacity, more procurement teams competing for supply, and more pressure on the UCO collection side of the business to deliver volume.
The bigger picture
This is not happening in a vacuum. Over the past several weeks, the signals have been stacking up.
The EPA finalized record-high RVOs for 2026 and 2027. New Mexico launched the first clean fuel credit market in the Southwest. States like Hawaii, Illinois, New Jersey, and New York have active clean fuel standard bills in their legislatures. Starting in 2028, foreign feedstocks will receive half the RFS compliance value compared to domestic supply.
Now the EIA is raising its production outlook to match. The market is responding. Production is ramping up. And all of it needs feedstock.
The bottom line
If you collect used cooking oil, the demand picture just got stronger. The federal government is now officially projecting more renewable diesel and biodiesel production next year than it was a month ago. That production has to come from somewhere, and UCO sits at the top of the feedstock priority list.
The trend is not changing. More production. More demand. More value for every gallon you pick up.
