Used cooking oil from Indonesia: export permits, B50 and 2027 changes

The export permit regime since January 2025

Indonesia did not ban UCO exports, but it made them conditional. Ministry of Trade Regulation 2/2025, effective 8 January 2025, tightened exports of used cooking oil, palm oil mill effluent (POME) and high-acid palm oil residue. The practical gate is twofold: an allocation agreed in inter-ministerial coordination meetings, and an export permit issued only when that allocation exists for the exporter and period in question.

The regulation covers UCO under several tariff lines of heading 1518. That detail matters because trade reports describe attempts to ship UCO under other product descriptions to bypass controls. A buyer should ask for the exporter’s valid permit and allocation letter for the shipment month, and refuse any commercial description designed to hide what is in the tank.

If you are comparing offers from several Indonesian traders, do not assume they share the same allocation pool. Permits attach to named exporters and quantities. A low price with no permit evidence is not a bargain; it is a compliance failure waiting to surface at customs.

Why Indonesia is keeping more UCO at home

The government justified the restriction by the needs of the domestic cooking-oil programme and of biodiesel blending. Those programmes compete directly with export traders for the same waste stream, and policy has moved firmly in favour of domestic use.

USDA reports that Indonesia moved from B40 to B50 in July 2026, ahead of its roadmap, and plans a 1% SAF mandate in 2027. Higher biodiesel blending absorbs more fat-based feedstock and increases the opportunity cost of every tonne loaded for export.

Pertamina, the only Indonesian SAF producer, has tested SAF from a UCO blend. Even if not every test becomes commercial volume immediately, it signals that state-owned fuel companies see UCO as strategic domestic input. Export buyers should expect tighter allocations in peak biodiesel seasons rather than steady growth in permitted export volume.

Separating UCO from palm residues—and from fraud

Indonesian export controls group UCO with POME and high-acid palm residues because all three are waste fats tied to the palm complex. They are not interchangeable products. POME and acid oil have different handling, pricing and refinery routes; used cooking oil must be contracted and analysed as UCO.

Because several heading 1518 lines appear in the same policy frame, dishonest operators may try to dress one product as another on invoices or certificates of origin. Your contract should name the product, reference the specification you tested, and give you the right to reject if inspection shows a mismatch.

Independent inspection at loading remains the buyer’s best defence: sample from the export tank, seal containers, and match results to the certificate of analysis before documents are released. Sustainability schemes such as ISCC EU, where the buyer requires them, must be verified in the issuer’s public register for the collecting point and exporter named on the shipment.

Centralised exports from 2027

Permits are today’s bottleneck; corporate structure may be tomorrow’s. USDA reports that Indonesia plans to centralise exports of palm products from January 2027 through Danantara Sumberdaya Indonesia, a newly appointed state-owned company, with UCO and palm residues in scope.

The details of how traders, collectors and Danantara will interact may still evolve, but the direction is clear: fewer informal paths to export for palm-linked commodities. Contracts that run into 2027 should include a clause allowing repricing, volume adjustment or termination if the counterparty loses export rights or must route cargoes through a new nominated exporter.

If you rely on a long-term Indonesian supplier, ask now how they expect to hold allocation under the centralised model, not after the first refused loading in 2027.

EU import conditions and buyer evidence

Indonesia remains an important origin for EU renewable fuel demand—NGO analyses of official data cite it among sources feeding European biofuel use alongside China and Malaysia—but each cargo still stands on its own file.

For EU destinations, buyers will expect ISCC EU or equivalent chain-of-custody evidence, sustainability declarations, Union Database entries where applicable, and a lot-specific certificate of analysis with inspection. From 19 November 2027, Regulation (EU) 2025/2181 adds animal-health import rules: the Indonesian establishment of origin must be approved or registered, the oil must meet the filtration standard before shipment, and the cargo must travel with the model importer declaration to an eligible receiving plant.

US buyers should separately confirm 45Z eligibility rules: fuel produced after 31 December 2025 cannot use imported UCO from Indonesia for that credit. That is a US rule, not an Indonesian export permit, but it shapes which American buyers can bid for your parcel.

• Valid export permit and allocation for the shipment period
• Product description consistent with the oil shipped
• Clause covering the 2027 export centralisation
• Approved or registered establishment for EU cargoes from November 2027
• ISCC certificate where the buyer requires it
• Independent inspection and lot-specific COA at loading

Contracting and execution in a restricted market

In a permit-limited market, the contract should track government paperwork as closely as it tracks quality. Tie shipment obligations to verified permit and allocation for the loading month, and define what happens if the allocation is cut after signing but before loading—force majeure is not automatic when policy is known and evolving.

Most Indonesian UCO still ships in flexitanks or bulk parcels from major export ports; agree Incoterms, inspection and document release against payment before freight booking. Because domestic biodiesel demand can pull material back inland, build modest buffer time between allocation confirmation and loading.

Turco & Co qualifies Indonesian UCO offers against permit status, product description and documentary traceability. Buyers remain responsible for verifying allocations with their legal counsel and for confirming destination rules with their importer.

Common questions

Sources and evidence

Primary references support the stated technical definitions. Procurement checklists are editorial guidance, not evidence of a specific lot, shipment or certification.

• Indonesia Ministry of Trade — Regulation 2/2025 on UCO, POME and HAPOR exports
• USDA FAS — Indonesia Biofuels Annual 2026 (ID2026-0033)
• Commission Regulation (EU) 2025/2181 — Import of used cooking oil

Confirm laboratory methods, commercial terms and applicable requirements with the buyer and qualified advisers before contracting. No guide establishes stock availability or company certification.