From China Digital Space
地沟油 (dì gōu yóu): ditch oil (also known as slop oil, 潲水油)
Slop oil is “refined” from slop or swill, which is the leftover food that people and restaurants throw away. Usually, slop or swill is fed to pigs but some unscrupulous people will gather the slop and “recycle” the oil in the slop to sell as cooking oil. Refining slop oil is illegal because of the negative health effects. See here (Chinese) and here (English).
地沟油实际上是一个泛指的概念，是人们在生活中对于各类劣质油的通称。 潲水油（俗称地沟油）对人体的危害极大，长期食用可能会引发癌症。由于销售地沟油存在不小的经济诱惑，仍有人铤而走险。据说国人每年要吃掉200～300 万吨。据专家估计，国人每吃10顿饭中，可能会有1顿碰上地沟油。