Low grade is extremely important to have early game so that you can get furnaces. Once you have a bunch of furnaces, you’ll be able to start smelting your valuable metal ore. The only problem is that it can take forever to get enough low grade for a single furnace.
How do you get Low Grade Fuel? The best way is by destroying the red barrels at the side of the road, and then refining the Crude Oil at an oil refinery.
Sometimes, this method isn't possible in some areas of the map. I'll explain this method more, as well as give you several other great ways to quickly get Low Grade Fuel.
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Refinery Method
At many monuments such as the Dome and the Trainyard, you can find an oil refinery just waiting to be used. With these refineries, you can turn 7 Wood and 1 Crude Oil into 3 Low Grade Fuel. You'll only need 17 Crude Oil total to get enough Low Grade for one Furnace.
It's insanely easy to get a lot of Crude Oil, and it'll get to the point where you'll have so much Crude Oil you'll throw it out. Use a Salvaged Cleaver to quickly break red barrels, and then pick up everything they drop.
The biggest downside of this method is that players nearby can hear when you're refining items. Sometimes you'll become an easy target for players on the hunt, so always be ready to fight.
Animal Fat Method
As you've probably figured out already, animals drop fat when you harvest them. Animal fat is actually insanely useful for making low grade, you just have to know how to get more of it.
Boars and bears are the best animals to hunt for far. When you kill them, use either a Bone Knive or a Combat Knife to harvest the body. These knives will give you the greatest amount of resources to craft Low Grade with.
Horses don't give as much animal fat, but they spawn more often than other animals. I've managed to get a ton of animal fat by going around hunting horses, so it's always worth a shot.
Sometimes you'll barely find animals everywhere, and there's a solution for that. All you have to do is F1 kill yourself and then harvest your body. The more sleeping bags you have around your base, the easier it is to do this.
It could take 5 or 6 times to actually get enough animal fat for 1 furnace, but it's worth it if you are unable to find any fuel anywhere else. Bring some friends with you to do this even quicker.