Support The Implementation Of Biodiesel B40, Ministry Of Trade Tightens Exports Of Palm Oil Factory Waste

Illustration (Photo: Doc. ANTARA)

The government through the Ministry of Trade (Kemendag) has tightened exports of a number of waste palm oil mills.

This step was taken to support the implementation of biodiesel B40.

The tightening of palm oil mill waste includes Palm Oil Mill Effluent (POME), residues of high acid palm oil or High Acid Palm Oil Residue (HAPOR), and refined oil or Used Cooking Oil (UCO).

This policy is regulated through the Regulation of the Minister of Trade Number 2 of 2025 concerning Amendments to the Regulation of the Minister of Trade Number 26 of 2024 concerning Export Provisions for Palm Oil Derivative Products.

Trade Minister Budi Santoso said this policy was to ensure the availability of raw materials for the cooking oil industry in the implementation of the people's cooking oil program. In addition, to support the implementation of biodiesel based on palm oil by 40 percent (B40).

"We emphasize that the government's top priority at this time is to ensure the availability of crude palm oil (CPO) raw materials for the cooking oil industry and support the implementation of B40," he said in an official statement, Thursday, January 9.

The Minister of Trade Regulation Number 2 of 2025 will take effect on Tuesday, January 8, which will tighten the Policy for Exporting Residual Palm Oil Derivative Products, namely POME and HAPOR, and UCO, including conditions for obtaining Export Approval (PE).

Budi is not happy that this policy will have an impact. But unfortunately, he did not explain in detail what the negative impact was.

"Of course there will be an impact from this policy. However, once again we emphasize, the interests of the domestic industry are the most important," he said.

In the Minister of Trade Regulation 2 of 2025 Article 3A, the export policy of palm oil derivative products in the form of UCO and Residu was discussed and agreed in a coordination meeting between ministries/non-ministerial government agencies that organizes coordination, synchronization, and control of government affairs in the food sector.

In addition, he continued, discussions at coordination meetings included the presence and absence of export allocations were a requirement to obtain export approval.

"However, for exporters who have received the PE Residu and PE UCO which have been issued based on Permendag Number 26 of 2024, they can still carry out exports. The PE is still valid until the validity period ends," said Budi.

Exports Exceeding Reasonable Capacity

Budi said that so far the export of palm oil mill waste has far exceeded the reasonable capacity it should have.

Furthermore, Budi said, during January jinhh October 2024, exports of POME and HAPOR reached 3.45 million tons.

The export volume is greater than CPO exports in the same period which was only 2.70 tons.

Meanwhile, in 2023, PAME and HAPOR exports reached 4.87 million tons. The export volume is also much larger than CPO exports in that period which was only 3.60 million tons.

Meanwhile, exports of POME and HAPOR in the last five years (2019 to 2023) grew by 20.74 percent.

Meanwhile, CPO's export volume fell by an average of 19.54 percent in the same period.

Based on this data, said Budi, exports of POME and HAPOR were recorded far beyond the reasonable capacity that should have been or only around 300,000 tons.

This justifies that the exported PAMEs and HAPORTs are not pure of residue or residue of processed CPO results alone, but are also mixing the CPO with the original POME or HAPOR.

In addition, the increase in exports of POME and HAPOR can also be caused by the processing of fruit from Taman Buah Segar (FFB) which is rotted directly into POME and HAPOR.

Budi assessed that this condition leads to the large number of FFBs that are diverted to be processed by the Palm Oil Factory (PKS) or known as PKS loosely. This has resulted in conventional PKS having difficulty getting FFB.

"If this condition continues, it will be worrying for the availability of CPO as the raw material for domestic industries," he said.