Localizing used cooking oil processing for biodiesel production in Iceland
Iceland currently exports nearly all of its used cooking oil (UCO) for biodiesel production abroad—despite possessing abundant renewable energy resources and a national goal of reaching carbon neutrality by 2040. This thesis examines the feasibility of localizing UCO processing for biodiesel within Iceland, comparing lifecycle emissions and economic viability between the current export model and a proposed domestic system powered by renewable electricity. The study employs lifecycle assessment (LCA) methodology in accordance with ISO 14040/44 and RED III standards, supported by stakeholder input and policy review. Results indicate that a domestic UCO biodiesel system could reduce lifecycle greenhouse gas emissions by up to 73% compared to the export scenario. Although local production costs are higher (€1.05–1.25/liter versus €0.85–1.10/liter for imports), these are balanced by emissions savings, energy security benefits, and alignment with circular economy principles. A modular production facility located in Reykjavík or at the Dysnes Biopark is presented as a viable solution. The study identifies policy gaps—such as the lack of UCO collection mandates or blending quotas—and recommends targeted reforms. Localized UCO biodiesel production emerges as a credible strategy for Iceland to reduce transport emissions, enhance energy independence, and close waste-to-fuel loops domestically.
Meistaraprófsritgerðir, Verkfræði, Eldsneyti, Orkuverkfræði, Hringrásarhagkerfi, Biodiesel, Circular economy, Renewable energy, Sustainable energy engineering
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