London Investors Turn to Waste-Based Biofeedstocks

London's investment community is taking a serious look at an unlikely asset class: waste. Used cooking oil, animal fats and organic residues — the core inputs for next-generation biofuels — are being reappraised as commodities with durable demand rather than as disposal problems.

The driver is policy. The UK's Renewable Transport Fuel Obligation requires suppliers to blend a rising share of renewable fuel, with targets moving towards roughly 19.5% by 2030. Fuels Industry UK reported that the country supplied 3.7 billion litres of renewable fuel in 2023, a 10% year-on-year increase. Waste-derived inputs are doubly credited under RTFO rules, which sharply improves their economics relative to crop-based alternatives.

Price signals and volatility

Hydrotreated vegetable oil and sustainable aviation fuel, both frequently produced from used cooking oil, sit at the centre of this shift. Analysts at ESL Fuels put UK market prices for UCO-based HVO feedstock in early 2025 at between USD 1,650 and USD 1,950 per tonne, a range that reflects strong demand and thin, geographically scattered supply. Meanwhile the domestic bioethanol sector has struggled with weak margins and import competition, pushing capital towards the waste-based end of the market.

Where trading houses fit

Aggregating waste feedstock is a logistics and documentation business before it is a trading one. Volumes arrive in small parcels from restaurants, processors and collectors, and each must carry certification if the resulting fuel is to earn its regulatory credit.

Alkagesta, founded in 2018 and now trading in more than 40 countries with over seven million tonnes of commodity flows a year, has built its biofuels activity around exactly that problem, combining sourcing, ISCC certification and structured finance. Its London office concentrates on institutional partnerships, using UK financial infrastructure to fund bio-feedstock projects across Europe, Asia and Africa.

The investment case

For investors, the attraction is a commodity whose demand is created by statute rather than sentiment, with a supply base too fragmented for any single refiner to control. The risk is equally clear: policy can change, fraud in feedstock origin claims remains a live concern, and prices have already shown they can swing by hundreds of dollars a tonne within a year.

Sources

• London Loves Business — The new commodity frontier: Why London investors are backing waste-based biofeedstocks — 20 October 2025
• Alkagesta — Company website