Fast Markets (23/02/2026) - Indonesia will maintain its ban on exports of crude palm oil mill effluent (POME) and crude used cooking oil (UCO) as President Prabowo Subianto doubles down on plans to secure domestic feedstocks for sustainable aviation fuel (SAF) production and position the country as a leading global aviation fuel supplier.

Key takeaways:

• Indonesia confirms it will maintain the current ban on crude POME and UCO exports to support domestic energy security and the aviation fuel industry.
• President Prabowo aims to make the nation a leading global producer of aviation fuel by keeping strategic bio-based residues within the country.
• Market participants expect the restrictions on crude material to continue. But hope refined products will remain free from export bans to avoid price volatility.

Prioritizing domestic use over crude palm oil exports

The 2026 National Coordination Meeting (Rakornas) of central and regional governments in Sentul, West Java, took place on Monday February 2. President Prabowo framed palm-based residues as strategic energy resources that should be prioritized for domestic use rather than exports.

“I travelled around the world. Almost all the leaders of the country asked Indonesia to supply CPO palm oil. Egypt, Pakistan, Russia, Belarus. Everywhere. It means it’s a very strategic commodity,” he said. “I’m sorry for the other nations. I ban the exports of palm oil wastes [from Indonesia].”

He added that Indonesia intends to build a globally competitive aviation fuel industry. He said the country aims to become one of the largest producers of aviation fuel derived from bio-based materials.

“We will be the largest aviation fuel producer. We can be the largest in the world. Even the waste of palm oil, used cooking oil, is a material for aviation fuel,” Prabowo said, linking feedstock retention directly to Indonesia’s ambition to develop a regional aviation and SAF supply hub.

Background on the export restrictions

Indonesia first restricted exports of crude POME and crude UCO in January 2025. The reason being to secure supply for its expanding biodiesel program and emerging biofuel projects. Under the current framework, refined grades of POME and UCO have continued to be exported. While crude material remains barred from overseas shipments.

Maintaining the ban on crude palm oil exports

Prabowo’s latest comments were seen by market participants as confirmation that the crude export ban will stay in place for the foreseeable future as part of a broader energy security and downstream industrialization strategy, sources said. Officials did not clarify whether restrictions will extend to refined products yet.

The feedstock push aligns with Indonesia’s longer-term aviation strategy. This includes a mooted SAF blending mandate of around 1% for international flights from 2027, with higher blend targets expected later in the decade as new production capacity comes online.

Market expectations regarding crude palm oil exports

Singapore-based traders told Fastmarkets that the market largely expects the restrictions to remain unchanged rather than widen. One trader said participants have already adjusted to the absence of crude Indonesian supply. He also believes it is likely the government will maintain the status quo. He further added that the industry hopes refined POME and UCO will continue to move freely to avoid disrupting established trade flows.

A second trader shared a similar view, saying that President Prabowo’s comments reinforce domestic prioritization but that most buyers and sellers expect the ban to stay limited to crude material. This is believed since extending it to refined grades would tighten regional availability and amplify price volatility.

Future outlook for biofuel feedstocks

Indonesia is seeking to channel more residues into SAF and biodiesel production. And it is doing so while cultivating its role as a key aviation fuel supplier. As such, the country’s stance on POME and UCO exports is expected to remain a central driver of Southeast Asian biofuel feedstock balances and pricing in the months ahead, sources said.

Read more at https://www.fastmarkets.com/insights/indonesia-restricts-crude-palm-oil-exports-waste/