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The Hidden Cost of Used Cooking Oil Waste in Indonesia

Indonesia is one of the world’s largest producers and consumers of palm oil, a versatile vegetable oil that is used for cooking, cosmetics, biofuels, and other products. However, the massive use of palm oil also generates a huge amount of waste: used cooking oil (UCO).

UCO is a waste product that is often disposed of improperly, causing environmental pollution and health risks. According to a study by the National Team for the Acceleration of Poverty Reduction (TNP2K) and Traction Energi Asia, Indonesia generated about 9.72 million kiloliters of UCO in 2019, but only collected 3 million kiloliters, or 18.5% of the total. Out of the collected UCO, only 570 kiloliters were converted into biodiesel, while the rest were either used as recycled cooking oil or exported.

The low conversion rate of UCO into biodiesel is due to several challenges, such as the lack of a systematic collection mechanism, the asymmetric distribution of UCO sources and biodiesel processing plants, the inefficient processing technologies, and the quality standards of UCO-based biodiesel. Moreover, the government’s policy to mandate the use of palm oil-based biodiesel (B30) in diesel fuel may reduce the incentive to use UCO as an alternative feedstock.

The unutilized potential of UCO for biodiesel production represents a missed opportunity for Indonesia to reduce its dependence on fossil fuels, mitigate greenhouse gas emissions, and create economic benefits for the urban poor. UCO can be a sustainable and low-cost source of biofuel, as it is biodegradable, non-toxic, and does not require additional land or water resources. UCO can also provide income and employment opportunities for the informal sector, such as waste collectors, small-scale processors, and biodiesel distributors.

Some initiatives have emerged to promote the recycling of UCO into biodiesel in Indonesia, such as Lengis Hijau, a social enterprise that collects UCO from hotels and restaurants in Bali and converts it into biodiesel for transportation, electricity, and heat generation[^3^][3]. Another example is Arkad, a company that collects and recycles UCO and plastic from households, restaurants, factories, and hospitals in Jakarta and other cities, and supplies ISCC-certified UCO to biodiesel manufacturers.

These initiatives show that UCO can be a valuable resource for Indonesia’s energy transition, if supported by appropriate policies, technologies, and awareness. UCO waste is not only a problem, but also a potential solution for Indonesia’s environmental and social challenges.

Developing Used Cooking Oil Business: A Win-Win Solution for Indonesia

Indonesia is a major producer and consumer of palm oil, a versatile vegetable oil that has many applications, from cooking to cosmetics to biofuels. However, the massive use of palm oil also results in a huge amount of waste: used cooking oil (UCO).

UCO is a waste product that is often dumped improperly, causing environmental and health problems. According to a study by the National Team for the Acceleration of Poverty Reduction (TNP2K) and Traction Energi Asia, Indonesia produced about 9.72 million kiloliters of UCO in 2019, but only collected 3 million kiloliters, or 18.5% of the total. Out of the collected UCO, only 570 kiloliters were converted into biodiesel, while the rest were either used as recycled cooking oil or exported.

The low utilization of UCO for biodiesel production is due to several challenges, such as the lack of a systematic collection mechanism, the asymmetric distribution of UCO sources and biodiesel processing plants, the inefficient processing technologies, and the quality standards of UCO-based biodiesel. Moreover, the government’s policy to mandate the use of palm oil-based biodiesel (B30) in diesel fuel may reduce the incentive to use UCO as an alternative feedstock.

However, UCO can be a valuable resource for Indonesia’s energy transition, if supported by appropriate policies, technologies, and awareness. UCO can be a sustainable and low-cost source of biofuel, as it is biodegradable, non-toxic, and does not require additional land or water resources. UCO can also provide income and employment opportunities for the urban poor, such as waste collectors, small-scale processors, and biodiesel distributors.

Some initiatives have emerged to promote the recycling of UCO into biodiesel in Indonesia, such as Lengis Hijau, a social enterprise that collects UCO from hotels and restaurants in Bali and converts it into biodiesel for transportation, electricity, and heat generation. Another example is Arkad, a company that collects and recycles UCO and plastic from households, restaurants, factories, and hospitals in Jakarta and other cities, and supplies ISCC-certified UCO to biodiesel manufacturers.

These initiatives demonstrate that UCO can be a win-win solution for Indonesia’s environmental and social challenges, if focused on by various related parties. UCO waste is not only a problem, but also a potential solution for Indonesia’s renewable energy concept.

Rekosistem: A Climate-Tech Startup that Optimizes the Waste Value Chain in Indonesia

Indonesia is facing a serious waste management problem, especially in urban areas. According to the Ministry of Environment and Forestry, Indonesia generated about 67.8 million tons of waste in 2019, but only 39.2% of it was managed properly¹. The rest was either dumped in open landfills, burned, or disposed of in waterways, causing environmental pollution, health risks, and greenhouse gas emissions.

To address this challenge, Rekosistem, a climate-tech startup founded in 2018, offers waste management and recycling services to optimize the waste value chain. Rekosistem, derived from a combination of two words; ‘re’ and ‘ecosystem’ (in Bahasa: Ekosistem). Re- stands for (1) reduce, (2) reuse, (3) recycle, (4) renewable, and (5) all sustainable related principles that will be implemented on their products. Ecosystem means that their solutions will revamp the existing behavior into a more eco-friendly community and conform them with how the ideal and organic interaction should happen⁵.

Rekosistem operates a digital platform that connects waste generators, such as households, restaurants, hotels, and factories, with waste collectors and recyclers. Through the Rekosistem app, users can report their waste, locate the nearest Rekosistem drop points or waste stations, and exchange their waste for Rekopoints that can be redeemed for vouchers and GoPay⁵. Rekosistem also provides a free once a week inorganic waste pickup service for certain areas in Jakarta and its surroundings, called Repickup Cluster⁵.

Rekosistem collects various types of waste, such as plastic, paper, metal, glass, electronic, and used cooking oil (UCO). The collected waste is then sorted, processed, and sold to recycling partners or converted into value-added products, such as biodiesel, compost, and handicrafts. Rekosistem also collaborates with various stakeholders, such as government agencies, private companies, NGOs, and communities, to implement sustainability and extended producer responsibility (EPR) programs⁵.

Rekosistem’s vision is to create a circular economy model that benefits both the environment and the society. By recycling waste, Rekosistem reduces the demand for natural resources, mitigates greenhouse gas emissions, and prevents environmental degradation. By empowering waste collectors, Rekosistem provides income and employment opportunities, improves living conditions, and raises awareness for waste management. By engaging waste generators, Rekosistem incentivizes behavioral change, promotes sustainable consumption, and fosters social responsibility.

Rekosistem has achieved impressive results since its inception. As of December 2020, Rekosistem has successfully recycled and processed more than 10,000 metric tons of waste, managed more than 20,000 houses and 100 commercial places, and implemented more than 20 sustainability and EPR programs⁵. Rekosistem has also secured USD 5 million investment round from Marubeni Corporation, a Japanese conglomerate, to expand its waste circularity ecosystem in Indonesia⁷.

Rekosistem is one of the leading climate-tech startups in Indonesia that is transforming the waste management sector with innovative solutions. Rekosistem is not only solving a problem, but also creating a solution for Indonesia’s environmental and social challenges.