Sustainable Recycling Mechanisms for Waste Cooking Oil in China’s Third-Tier Cities: Evidence from Restaurant Practices

The conversion of waste cooking oil (WCO) into biodiesel is a key strategy for advancing energy sustainability, particularly within China’s rapidly expanding restaurant industry. In third-tier cities such as Shantou, Guangdong Province, WCO collection faces unique challenges. Through in-depth interviews with 20 restaurant operators, this study identifies multiple barriers to effective WCO management, including an aging population, underdeveloped local economies, limited technological infrastructure, and unequal access to educational opportunities, all of which hinder the adoption of advanced filtration systems and broader environmental sustainability initiatives. Moreover, the non-standardized operations of third-party WCO collection services, coupled with space constraints in small restaurant kitchens, further exacerbate inefficiencies in recovery processes. To address these challenges, this study develops a comprehensive framework for WCO collection that is adaptable to regions with similar socio-economic conditions. Integrating grounded theory, Interpretive Structural Modeling (ISM), and Latent Dirichlet Allocation, the framework fills critical gaps in existing research. The analysis reveals that government financial incentives occupy the foundational layer of the ISM hierarchy and serve as a key driver of recycling behavior among restaurant operators; educational attainment enhances awareness and compliance but is moderated by structural constraints; and trust in third-party recyclers exerts a relatively limited influence. Correspondingly, H1 receives qualitative support, H2 is partially supported, and H3 gains only limited support. Building on these findings, the study proposes a multi-stakeholder governance framework that includes a “community-school-family” education system, an intelligent third-party management platform, and a government-led industrial chain to promote the formation of a closed-loop circular economy. The results demonstrate that the proposed framework not only offers actionable policy recommendations but also facilitates the adoption of sustainable practices and deepens the understanding of socio-economic and operational factors affecting WCO management, thereby providing strong support for energy and environmental sustainability.