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.

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