Info Sheet 10: Animal Fats

Subject: Information sheet on RED double counting of

wastes and residues

Date: 30 August 2011

From: Daan Peters, Klaas Koop and Jos Warmerdam

1. Description
Animal Fats are fats from slaughtered animals that are rendered into a variety of
products. Animal fats can be general fats and tissues or can be rendered from
internal organs, bones, heads and to a small extent from hides or skins. Animal fats
are part of the wider group of animal by-products (ABPs). When biodiesel is
produced from animal fats, the raw material is rendered animal fats: the animal
fats that are the product of the rendering of ABPs, In addition, animal fats intended
for human consumption could be used for biodiesel production.

ABPs are entire bodies or parts of animals or products of animal origin mostly not
intended for human consumption, such as heads, skins, horns, blood and bones.
However, a small percentage of the highest quality animal fats and some bones if
processed into gelatine are used for human consumption. ABPs can be classified by
degree of quality, from high to low:

Animal fats intended for human consumption.

Category 3: ABPs that can be used for animal feed and cosmetics. For
example parts of slaughtered animals, which are fit for human consumption
in accordance with EU legislation, but are not intended for human
consumption for commercial reasons.
Category 2: ABPs that can be used for soil enhancement and for technical
purposes, such as oleochemical products and special chemicals. Examples of
this category ABPs include manure and digestive tract content, (parts of)
animals that have died from other causes than by being slaughtered for
human consumption, including animals killed to eradicate an epizootic
disease1;
Category 1: ABPs that have a high risk for human health, for example
animals suspected of being infected by a TSE2 or in which the presence of a
TSE has been officially confirmed; specified risk material. ABPs in this

1
Disease affecting many animals of the same species that spreads quickly within a particular
geographical area, for example foot and mouth disease.
2
Transmissible Spongiform Encephalopathy, group of diseases affecting the brain and nervous systems
of animals

1/11
 category can be used for energy purposes and are not allowed to enter the
human or animal food chains.
Animal fats produced from ABPs are classified in the same way.
The three categories of ABPs not intended for human consumption have been
introduced in EU Regulation 1774/2002, laying down health rules on animal by-
products not intended for human consumption and have been confirmed in the
recent Regulation 1069/2009. When products of different categories are mixed, the
entire mix will be classified according to the lowest category in the mix.

CN codes:
- 1501 00: Pig fat (including lard) and poultry fat, other than that of heading
0209 or 1503.
- 1502 00: Fats of bovine animals, sheep or goats, other than those of heading
1503.
- 1503 00: Lard stearin, lard oil, oleostearin, oleo-oil and tallow oil, not emulsified
or mixed or otherwise prepared
- 1504 : Fats and oils and their fractions, of fish or marine mammals, whether or
not refined, but not chemically modified
- 1505 00: Wool grease and fatty substances derived therefrom (including lanolin)
- 1506 00 00: Other animal fats and oils and their fractions, whether or not
refined, but not chemically modified.

1.1 Processing by-products from animals fit for human consumption

Various definitions of rendering exist. In this report we consider rendering as the

processing of ABPs into various products, co-products and residues. Meat and food
grade animal fats are processed at different facilities.

Before an animal is slaughtered, first a veterinary inspection takes place. If no signs of

diseases are found the animal fats will be further processed with a large portion of
animal fats being classified as category 3 fats but also some category 1 and 2 fats. After
the veterinary inspection the animal is slaughtered in a slaughtering house. Usually the
meat and bones are removed at the slaughtering house, although small dedicated
cutting plants do exist. Food grade animal fats are cut or melted from the meat. Also,
usually the skin/hairs, horns and heads are removed at the slaughtering house. Some
slaughtering houses have an in-house blood processing facility. Manure and digestive
tract is treated separately and either used as compost or digested into biogas.

Hides from cows and sheep are transported to a dedicated tannery to be further
processed into leather products. Also, some fats are melted from the hides. Cow and
sheep horns, feet and heads are usually sold together with the hides and transported to
tanneries. Blood is sometimes transported to a separate blood rendering facility. Pig
skins and all other ABPs (hard and soft tissues, heads, bones that are not sold with on-
the-bone meat and internal organs) are in most cases transported to dedicated
rendering facilities. Rendering facilities process the animal co-products into various
2/11
rendered products and co-products, including rendered animal fats3 and protein meal.
Rendered animal fats from these rendering plants and from fat melting in tanneries are
treated as one stream of animal fats.

Of the total animal material on average some 55% is used for food while some 15%
ends up as rendered animal fats.

1.2 Processing by-products from animals not fit for human consumption

If at the veterinary inspection mentioned under section 2.2 signs of diseases are found,
the entire animal will be classified as category 1. The animal will be slaughtered at a
slaughtering house and subsequently transported to a dedicated category 1 rendering
facility. All parts of the animal that are generated through rendering at this facility are
being classified as category 1. Animals that die on farms before they reach the
slaughtering house are being treated in the same way. Also pets are as a rule category
1.

The next section gives an overview of the animal fats production chain.

3
In English animal fats are often referred to as tallow, whereas the German term for tallow, Talg only
refers to beef fats.
3/11
1.3 Animal fats production chain

3a. Tanning/rendering
Hide of cow
or sheep Products intended for human
consumption

head of cow Category 1

entire animal Category 2

head of sheep
classified as
Category 3 (provided no signs of
category 1 if Horns/feet of diseases are shown)
signs of disease cow/sheep
are found spine/brain of 4a. refining
cow animal
2. slaughtering
dirt feed
3b. rendering
pig skin refined pet
head of pig/ rendered animal food
1. Veterinary chicken animal fats refined
inspection animal fats crude glycerine
FFA
blood/placenta glycerine MONG (Matter
2. slaughtering protein meal Organic
Non-Glycerol
biodiesel
Feathers/hairs
cleaned
animal
internal organs fats bio-energy
Food grade meat tissues dirt
animal fats oleo
4b. cleaning chemicals
bones
special
Source: Ecofys 2011 manure/digestive chemicals
biogas
tract
2. Market outlook
2.1. Quantities

Total quantity of EU animal fats production

Total EU production of animal fats stood at almost 3.2 mln tonnes in 2010 and has
been relatively stable since 2005. An overview of the production in various EU
Member States is given in table 1. Germany is by far the largest producer of animal
fats, followed by Spain and France.

Member 2010 2009 2008 2007 2006

State

Germany 689 669 652 637 600

Spain 381 371 396 402 376

France 333 323 345 345 346

Poland 279 258 300 328 325
Italy 290 283 287 289 282
Netherlands 224 215 208 206 210
United 155 147 151 152 147
Kingdom
Denmark 144 139 147 154 151
Belgium and 132 126 125 126 120
Luxemburg
Austria 109 108 108 108 107
Romania 89 86 84 92 86
Ireland 73 67 70 75 75
Hungary 45 41 46 50 48
Other EU 224 222 244 247 228
Member
States
Total EU 3165 3055 3162 3211 3102

Table 1 EU production of animal fats 2006-2010 x 1000 tonnes4

Quantities of EU production per animal species

In 2010 the EU produced 3.2 mln tonnes of animal fats production, an increase of
3.5% compared to 2009 and equal to the 2008 production level. Looking at the

4
MVO statistical yearbook 2010, based on figures from Mielke (Oil World) 2011.

5/11
sources of the EU production of animal fats 62% comes from pigs, 34% from
bovine5 and other animals such as sheep and 4% from fish. The largest EU
producers of pig fat are Germany, Spain, Poland and Italy. For bovine animals
France, United Kingdom, Germany and the Netherlands are the largest producers,
while Denmark is the largest fish oil producer in the EU. Animal fat production per
animal species remained rather stable during the years 2006-2010.

Relative quantities of animal fats per category per animal species

Different animals yield different quantities of animal fats. Table 2 provides an
overview of the relative fat quantities per category per animal species. Chicken
breeding yields the least animal fats since the largest share is destined for human
consumption. Moreover, chickens seem to yield no or almost no category 1 and 2
fats. Most category 1 fats become available in cattle breeding. Also, category 2 fats
become available in such small quantities that in some Member States category 2
fats are collected together with category 1 fats.6

Cow/bull/ox Pig chicken

Category 1 20% - -

Category 2 4%

Category 3 26% 19% 26%

Meat, animal 54% 77% 72%
fats and
ABPs (fit for)
human
consumption

Table 2 Relative quantities of ABPs per category of animal fat per animal species7

2.2. Trade patterns

Cross-border trade in animal fats does take place, mainly between EU Member
States. Animal fats produced in Germany are traded to other EU Member States to
be used for biodiesel production.8 This trade is likely to increase in 2012 when the
use of animal fats for biodiesel production is effectively banned in Germany.9

2.3. Qualities and uses

Category 3 animal fats have the highest quality and the highest value. They have a
lower FFA content since they are generally more fresh and pose the lowest risk for

5
cattle
6
In Germany, the Netherlands and the UK category 2 fats are not collected separately but together with
category 1 fats. In the UK category 2 fats used to be collected separately up to 2008. Interviews with
German Oleochemical company, Dutch oleochemical consultant, UK federation for special chemical
producers, UK biodiesel producer.
7
Presentation by Harald Niemann of STN, 11 February 2011, Hannover
8
Harald Niemann, STN.
9
German Bundes-Immissionsschutzgesetz BimSchG, paragraph 37b.
6/11
human health.10 Animal fats from this category may be used for products that come
into the human food chain such as animal feed or in direct contact with humans,
such as cosmetics.

In the UK, category 3 animal fats are, in a commercial context, further divided into
three grades of quality:
grade 1 high quality, white coloured animal fats, used for pure white soap
products and cosmetics;
grade 2 high quality, off-white coloured, used for demanding applications
such as soap, can be bleached to white colour quality;
grade 6 low quality, green or brown coloured, contains high odour, used
for technical applications such as special chemical production.11

The uses of animal fats are restricted by EU legislation.12 While animal fats used to
be widely used for human consumption, in recent decades its use in the food sector
has dramatically dropped because of sanitary reasons and legislation.13 Under EU
Regulation 1774/2002 category 1 fats must be burned or used for bio-energy or
biodiesel and could not be used for animal feed, oleochemical and special chemical
producers. Under the new regulation 1069/2011 and its implementing regulation
142/201114 this will change when oleochemical products will be classified as an end
point after which the animal by-product regulation 1069/2011 will no longer apply.
The oleochemical sector is thus likely to soon be able to start using category 1 fats.

Category 2 fats are not usually collected separately and is merged with category 1
fats and thus classified as category 1. It could be used for oleochemical and special
chemical products for industrial applications but not to produce cosmetics.

Category 3 animal fats are used for the production of animal feed, oleochemical
products and specialty chemicals, including manufacturing soap products (for uses
varying from personal care to industrial processing, such as rubber processing soap
solution or de-inking recycled paper), fatty acids and glycerine that is used for uses
ranging from cosmetics ingredients to raw materials for processing into further
speciality chemicals. Recently an increasing quantity of animal fats is used to
produce biodiesel and some is used for bio-energy.

Biodiesel producers can use all categories of animal fats for their production.
However biodiesel production is easiest if category 3 fats are used due to the often
lower levels of free fatty acids.

10
Interview with Dutch animal fat processing company
11
AEA Energy and Environment, advice on the Economic and Environmental Impacts of Government
Support for Biodiesel Production from Tallow, p. 4; interview with UK special chemicals company.
12
EU Animal by-product Regulation nr. 1069/2009, replacing Regulation 1774/2002
13
For example, fast food chain McDonalds fried its French fries in tallow until 1990.
14
(EU) No 142/2011 of 25 February 2011 implementing Regulation (EC) No 1069/2009 and
implementing Council Directive 97/78/EC as regards certain samples and items exempt from veterinary
checks at the border under that Directive.
7/11
The trends in 2009-2010 shows that 10% more animal fats went to pet food
production and biodiesel use grew from 8 to 15%, in total 410.000 ton. Of the total
tallow use for biodiesel, 155.000 tonnes was category 1 and 2 (50.000 in 2009) and
255.000 ton category 3.15 While tallow biodiesel production grew rapidly during the
last years, the most important use of animal fats in 2010, as can be seen in Figure
1, was animal feed, followed by oleochemical production and bio-energy
(incineration). It is to be expected however that the biodiesel production will
become the most important use of animal fats.16

Use of animal fats (EU-19)

800

700
Energy
600
Oleochemical
500 & soap
Pet food

400 Feed

300 Food

200 Biodiesel

Others
100

0
2006 2007 2008 2009 2010

17
Figure 1 Uses of animal fats 2006-2010 in 19 EU Member States

2.4. Prices
Prices of animal fats follow palm oil price development and crude palm oil usually
forms the ceiling for category 3 rendered animal fat prices. But also biodiesel
production has an effect on rendered animal fat prices, without the demand from
the biodiesel industry, prices of rendered animal fats would be much lower. Where
palm oil prices determine the ceiling, demand from biodiesel production determines
the bottom. Since March/April 2011 however, prices of category 3 rendered animal
fats have peaked above crude palm prices. It is yet too early to conclude whether
this is a temporary effect or whether prices are pushed above crude palm oil
prices.18 Prices of category 3 beef and pig animal fats have risen from 380 per
tonne in 2006 to 800 at the end of 2010. Category 3 fats prices are currently

15
Results presented at EFPRA congress, June 2011.
16
Interview with Dutch animal fats trader.
17
European Fat Processors and Renderers Association (EFPRA). Numbers are derived from EFPRA
members, so not an EU total, but the leading producers are included.
18
Interview with Dutch trader in animal fats.
8/11
about 750 per tonne and relatively stable, however some larger companies
currently pay around 600. Prices for category 1 animal fats are currently between
450 and 550 per tonne and slowly rising. Prices for category 2 animal fats follow
category 1 prices although could have separate prices that are slightly higher than
category 1 prices in some Member States.19 Prices of food grade animal fats follow
the prices of RBD palm oil, which has a higher value of crude palm oil.20

3. Developments in the market

The livestock in the EU is slightly decreasing so more meat will be imported (for
example from Argentina). For the coming years this will give a slight decrease in
the production of animal fats. In general there is a shift from food to feed, and from
feed to biodiesel, where the amount for feed is stable21.
In January 1997, the European Union prohibited the import of certain animal
protein products, including pet foods, from the United States, and followed that
with a ban on tallow. Other embargos on animal proteins and fats in livestock feed
and some industrial uses eventually followed and remained in place into 2010, with
some relaxation of Europes feed bans being seen in 2011. Other countries around
the world have put in place tariffs and prohibited the importation of certain
rendered products over the years, forcing the U.S. rendering industry to work extra
hard at convincing foreign governments using science that U.S. animal proteins and
fats are safe feed and industrial ingredients. The battles continue to this day, often
toward new bans being put in place or existing ones that still havent been lifted22.
Also, it is to be expected that in the near future more animal fats can be proven to
be safe for human health and will be classified as category 3 fats rather than
category 1 and 2 fats.23

19
In the UK separate prices for cat 2 animal fats existed until 2008 with a price that was around 50
lower than category 3, grade 6 (see section 2.3); UK special chemicals association, UK biodiesel
producer, German Oleochemical company, Dutch trader in animal fats.
20
Interview with Dutch animal fats trader. RBD means refined, bleached, deodorised.
21
Dutch animal fats expert
22
Render. The International Magazine of Rendering, vol. 40, nr 2 (April 2011), p. 24.
23
Interviews with several market actors.
9/11
4. References

- Interviews with relevant industry and other stakeholders

- AEA Energy and Environment, advice on the Economic and Environmental Impacts
of Government Support for Biodiesel Production from Tallow (UK, 2008)

- BREF document, Integrated Pollution Prevention and Control Reference Document

on Best Available Techniques in the Slaughterhouses and Animal By-products
Industries (May 2005).

- MVO (Dutch Product Board for Margarine, Fats and Oils) statistical yearbook 2010.

- David L Meeker for the National Renderers Association, Essential rendering. All
about the animal by-product industry (Arlington USA, 2006).

- Anneliese Niederl and Michael Narodoslawsky, Life cycle assessment. Study of

biodiesel from Tallow and Used Vegetable Oils (Graz, 2004)

- Render. The International Magazine of Rendering, vol. 40, nr 2 (April 2011).

- Clearpower ltd., A resource study on Recovered Vegetable Oils and Animal Fats
(Ireland, 2003).

- Website Servicegesellschaft Tierische Nebenprodukte mbH www.stn-vvtn.de

10/11
Annex A Price development of tallow
Source: Presentation of Warwick Lywood of Ensys, available at http://assets.dft.gov.uk/publications/biofuels-events-calendar/wastes-residues-biofuel-use.pdf