Indonesia mulls hoarding UCO to hit emissions goals

Indonesia may impose restrictions on used cooking oil (UCO) exports from next year to help fuel its own renewable energy targets, according to the Indonesian Palm Oil Association's vice-chairman for trade and sustainability Togar Sitanggang.

With Indonesia's already ambitious 30pc biodiesel mandate and further measures needed to meet its 2060 net zero emissions target it will need full use of its own feedstocks, Sitanggang said at the Argus Biofuels Europe and Asia Markets Virtual Conference.

Nothing official has been announced and details are yet to be outlined, but the implication will alarm the European biofuels community that relies heavily on UCO to meet its own renewable targets. It is already facing a long-term structural shortage because of the generous incentives impressed on waste-based feedstocks.

Asia has long been a biodiesel and feedstock factory for Europe, with traders fearing that other countries will also start controlling foreign outflows to meet their own carbon reduction targets.

"It's just a matter of when," according to one seller. India has already imposed similar restrictions on biofuel imports and exports to boost its domestic market and become energy self-sufficient.

A UCO export cap will also be a rebuke to the EU that slapped anti-dumping duties on Indonesian biodiesel. By 2030 it will phase out palm oil from its transport fuel mix, of which Indonesia is the world's largest producer.

Indonesia exported 256,000t of UCO between January-September this year. A combined 40pc was delivered to the Netherlands and Spain and another 30pc to Malaysia, where the majority is bulked together with other regional cargoes before heading to Europe.

By Amandeep Parmar