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Indonesia has imposed restrictions on exports of used cooking oil and palm oil residues to ensure sufficient supplies for its domestic cooking oil and biodiesel industries, according to new regulations issued by the government on Wednesday.
The move by the world's largest palm oil producer and exporter aims to support the implementation of a new mandate taking effect this year, which requires blending 40% palm oil-based fuel into diesel, known as B40, up from 35% previously.
Indonesian authorities had been considering ways to curb exports of used cooking oil, though the extent of the tightening had not been clear until now.
Last month, some cooking oil sold under a government programme called "MinyaKita" was allegedly mislabelled as used cooking oil and shipped abroad as feedstock for biofuel production, according to media reports.
The new regulations, which take effect immediately, require all exporters of palm oil residues and used cooking oil — including palm oil mill effluent (POME) — to obtain an export allocation from the government.
These allocations will be determined at a meeting involving officials from ministries such as Trade and the Coordinating Ministry for Food Affairs.
Palm oil mill effluent (POME) can be used to produce biogas, fertiliser and fuel.
Indonesia's exports of used cooking oil and palm oil residues from January to November 2024 totalled about 3.95 million tonnes, down 13.75% from the same period in 2023, according to data from Indonesia's Statistics Agency.
Government officials have repeatedly acknowledged signs of shortages of the MinyaKita product, noting that retailers have been selling it at prices roughly 10% above the government-set ceiling.
Indonesia requires all crude palm oil exporters to sell a portion of their output domestically at a fixed price for use in producing MinyaKita cooking oil, which is then sold at a regulated, affordable price.
Some players in the palm oil industry have expressed concern that the B40 mandate could affect exports.
Source: Reuters