Indonesia has clamped down on exports of used cooking oil (UCO) and palm oil residue to ensure supply to domestic cooking oil and biodiesel industries, the government said in a new regulation on Wednesday. The step by the world’s top producer and exporter of palm oil aims to help attain a new mandate starting from this year, of mixing 40% of palm oil-based fuel with diesel fuel, called B40, up from 35% previously, it said.
Authorities in Indonesia have been looking into ways to curb UCO exports, but the extent of the tightening was not immediately clear.
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Last month, an official alleged that some cooking oil sold under a government programme called “Minyakita” had been mislabelled as UCO and shipped overseas for biodiesel feedstock, media said.
The new regulation, which takes effect immediately, requires all exporters of palm oil residue and UCO, including palm oil mill effluent (POME), to acquire an export allocation from the government.
Such allocations will be set at a meeting of officials of ministries such as trade and that which coordinates food affairs. POME can be used to produce biogas, fertiliser, and fuel.
Indonesia’s exports of UCO and palm oil residue from January to November 2024 stood at 3.95 million metric tons, down 13.75% from the corresponding 2023 period, data from Statistics Indonesia showed.
However, government officials have repeatedly said there were signs of scarcity of the Minyakita product, citing retailers’ sale of such items at about a tenth higher than the government’s maximum retail price.
Indonesia mandates all palm oil exporters to sell some of their crude palm oil domestically at a capped price to be made into Minyakita cooking oil, which is then sold at a regulated, affordable price.
Some in the palm oil industry have expressed concern the B40 mandate could disrupt exports.
