Arya News - The government too is tightening oversight of UCO exports to reinforce governance, prevent fraud and maintain Malaysia’s credibility as a trusted supplier.
PETALING JAYA – As more Malaysians turn to selling used cooking oil (UCO) for extra income, stakeholders have raised concerns over how some may exploit this trend by selling new, unused oil as UCO.
The government too is tightening oversight of UCO exports to reinforce governance, prevent fraud and maintain Malaysia’s credibility as a trusted supplier.
UCO collecters say there have been cases where some individuals try to sell new cooking oil under the guise of used oil.
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“We have encountered a few suspicious cases in the past,” said Hillton Lee, co-founder of Recircle, a company that simplifies recycling items, such as UCO, through a digital app.
“Such cases usually come through our customer service touchpoints or directly from collection partners.”
In these instances, individuals inquire about buy-back rates and provide information for collection.
“As part of our evaluation process, we request images for verification. Some submissions clearly showed packaged or unused oil, raising immediate red flags,” Lee said.
These requests are rejected as they violate industry regulations.
“Attempting to pass off new oil as used undermines the sustainability goals we’re working to achieve. We take these matters seriously to ensure the transparency and credibility of the buy-back system,” she said.
Subsidised cooking oil is sold at RM2.50 per 1kg packet, which could see some individuals resell it for up to RM3.50 per kilo to UCO collectors.
According to the Association of Used Cooking Oil Development Malaysia, UCO is typically sold in bulk to collectors who transport it to depots for pretreatment by licensed companies. After pretreatment, the UCO is sent to biodiesel manufacturers for conversion into biodiesel.
The International Sustainability Carbon Certification (ISCC) guidance notes that the degraded properties of UCO makes it particularly suitable for specific biodiesel conversion processes.
In contrast, virgin cooking oil is not classified as waste, and its use undermines the sustainability goal of transforming waste into energy. It also competes with the food supply and increases land-use emissions, counteracting the waste-to-energy conversion purpose.
Dr Chatichai Chong, Arus Oil’s chief marketing officer, noted that UCO generally looks darker and has higher acidity compared to virgin oil.
“However, certain oil grades also have a darker tone,” he said.
Arus Oil’s main UCO collections come from households, restaurants and processing factories.
“However, we have yet to encounter fraudulent cases ourselves,” Chong said.
Arus Oil is licensed under the ISCC, requiring them to declare each point of origin for the used cooking oils.
“We also declare our monthly volume with the Malaysian Palm Oil Board (MPOB),” he added.
As part of measures to prevent fraud, government agency MPOB is increasing oversight of UCO exports to strengthen governance.
“The board is reviewing standards and policies to better distinguish UCO from by-products like sludge palm oil (SPO), focusing on export integrity,” said MPOB director-general Datuk Dr Ahmad Parveez Ghulam Kadir.
A key initiative is the Sawit Intelligent Management System (SIMS), a digital platform enhancing traceability from collection to export through real-time data logging and source verification.
“It helps detect irregularities and supports enforcement,” Ahmad Parveez said.
Exporters must meet international certification standards, such as ISCC or equivalent frameworks.
Misuse of subsidised cooking oil, including its diversion into the UCO export stream, is strictly prohibited under MPOB regulations, with offenders facing penalties.
When contacted, Deputy Plantation and Commodities Minister Datuk Chan Foong Hin said it is critical to review UCO and SPO policies to avoid discrepancies and meet strict sustainability demands from overseas buyers. He added that MPOB continues to work with other regulators to monitor the industry closely.