Indonesia restricts the export of palm residue and used cooking oil to domestic users

Indonesia has tightened its export restrictions on used cooking oil, palm oil residues and palm oil waste to supply the domestic cooking oil industry and biodiesel. The government announced this in a new regulatory on Wednesday.

It said that the move by the top palm oil producer and exporter in the world aims to achieve a new mandate, starting this year, which calls for mixing 40 percent of palm-oil-based fuels with diesel fuel (called B40), up from 35 percent previously.

The Indonesian authorities are looking at ways to restrict UCO exports. However, the extent of this tightening is not yet clear.

Media reported that an official claimed last month that cooking oil sold as part of a government program called "Minyakita", had been mislabeled UCO, and sent overseas to be used for biodiesel.

All exporters of palm residues and UCO (including palm oil mill effluent) must obtain an export allocation under the new regulation.

These allocations will take place at a meeting between officials from ministries like trade and the one that coordinates food matters.

The POME is used to make biogas, fertilizer, and fuel.

Statistics Indonesia data showed that Indonesian exports of UCO, palm oil residue and palm oil residue between January 2024 and November 2024 were 3.95 million metric tonnes, down 13.75 percent from the 2023 period.

Government officials have said that there are signs of scarcity for the Minyakita products, citing the fact that retailers sell such items at a price about a 10th above the maximum retail price set by the government.

Indonesia requires all palm oil producers to sell a portion of their crude oil to the domestic market at a fixed price. This oil is then processed into Minyakita cooking oils, which are sold at an affordable, regulated price.

The B40 mandate has caused some concern in the palm industry. (Reporting and editing by Clarence Fernandez; Bernadette Cristina)

(source: Reuters)