Indonesia Tightens UCO and POME Exports as Residue Shipments of 3.45 Million Tonnes Outpace CPO

Jakarta — Indonesia's Ministry of Trade has tightened exports of used cooking oil (UCO) and two palm oil mill residues, palm oil mill effluent (POME) and high acid palm oil residue (HAPOR), under Trade Minister Regulation (Permendag) No. 2 of 2025. Trade Minister Budi Santoso signed the regulation on 7 January 2025, and it took effect on 8 January 2025. The government says the aim is to secure feedstock for the cooking oil industry and to support the B40 biodiesel mandate.

Exports of UCO and residues now depend on an allocation

Permendag 2/2025 amends Permendag 26/2024 on export rules for palm oil derivative products. CNBC Indonesia and RMOL report that the key change is in Article 3A. Under this article, export policy for UCO and residues is discussed and agreed in an inter-ministerial coordination meeting on food. The same meeting decides whether there is an export allocation at all, and an allocation is required to obtain an Export Approval (PE).

CNBC Indonesia summarised the other provisions as follows:

• Article 11 covers how to apply for a PE and what exporters must do once it is issued.
• Article 15 covers reporting on implementation and changes to PE data.
• Article 22 requires exporters to report realised and unrealised exports electronically to the Ministry of Trade by the 15th of each month.
• Article 24(2) sets sanctions for failing to report. These start with a warning and can go as far as suspension of the PE and/or a halt to issuing or amending PEs.

As a transition measure, exporters that already hold residue or UCO export approvals under Permendag 26/2024 may keep exporting until those approvals expire. "The PE remains valid until its validity period ends," Budi said, as quoted by RMOL.

Government suspects CPO is being shipped as residue

The government cites export data to justify the move. Ministry figures quoted by CNBC Indonesia and RMOL show POME and HAPOR exports of 3.45 million tonnes in January–October 2024. CPO exports in the same period were only about 2.70 million tonnes (both outlets printed "2.70 tonnes", which appears to mean million tonnes). In 2023, POME and HAPOR exports reached 4.87 million tonnes, more than the 3.60 million tonnes of CPO exported.

The five-year trends also point in opposite directions. Between 2019 and 2023, POME and HAPOR exports grew by an average of 20.74% a year, while CPO exports fell by an average of 19.54% a year. Budi said a reasonable export volume for POME and HAPOR would be only about 300,000 tonnes. In his view, the volumes being shipped are probably not pure residue but contain CPO.

CNBC Indonesia also reported a second concern. Fresh fruit bunches (FFB) are being diverted to so-called "berondolan" mills, which leaves conventional palm oil mills short of fruit. "If this continues, it will be worrying for the availability of CPO as an industrial raw material," Budi said, according to RMOL.

Domestic industry and B40 come first

Budi acknowledged that the policy will have consequences, but he said domestic industry takes priority. Warta Ekonomi lists three goals for the tighter rules: securing raw material for cooking oil producers, supporting the people's cooking oil programme, and supporting B40, which blends 40% palm-based biodiesel into diesel.

Used cooking oil has long been seen as a possible biodiesel feedstock. In April 2021, the Ministry of Energy and Mineral Resources (ESDM) estimated Indonesia's UCO potential at about 3 million kL a year. It said this could cover around 32% of national biodiesel needs, provided the oil meets biodiesel specifications and processing is economically viable. The new regulation does not set aside a specific UCO quota for biodiesel producers. Instead, the split between exports and domestic needs will be decided through the allocation mechanism in the coordination meeting.

Other biodiesel-related regulations are listed on our biodiesel regulations page.