Recovered palm oil mill effluent oil sits in a distinct position in the waste feedstock market: cheaper than used cooking oil, more expensive and more useful than raw effluent, and priced off whichever benchmark the buyer's refinery can actually substitute. In practice that means it is priced against UCO and against crude palm oil, with a discount that reflects its higher free fatty acid and its dirtier assay.
Free fatty acid is the single largest price driver. Every additional percentage point of FFA means more pretreatment, more yield loss and more corrosion risk for the buyer, and it is discounted accordingly. Moisture and insoluble impurities are discounted on the same logic, and sulphur is watched closely because it affects both catalyst life and the fuel specification at the refinery.
Supply is structurally concentrated. Indonesia and Malaysia account for almost all global palm milling, so POME oil availability is tied to mill throughput, to how much recovery capacity each mill has installed, and increasingly to regulation on methane capture from effluent ponds. Because recovery is a capital decision at the mill, supply grows slowly and in step with sustainability regulation rather than with price.
Despite the specification penalty, POME oil is bought because it is waste-derived. Under ISCC and the Renewable Energy Directive it qualifies for the incentives and double counting that virgin palm oil cannot, and it lets a converter improve the greenhouse gas profile of its feedstock slate at a lower cost than UCO.
Normally yes, and the discount reflects its higher free fatty acid, moisture and solids. The gap varies with how tight the waste lipid market is; when renewable diesel and SAF demand is strong the discount narrows because buyers are willing to run dirtier feedstock through pretreatment.
Almost entirely from palm oil mills in Indonesia and Malaysia, which together account for the overwhelming majority of global palm oil production and therefore of palm oil mill effluent.
Indirectly but increasingly. Regulators in Indonesia and Malaysia are pushing mills to capture biogas from effluent ponds rather than letting it vent, which changes the economics of effluent handling and makes systematic oil recovery more attractive at the mill.
Typically higher than UCO, often in the 5–15% range depending on how quickly the oil was separated after milling and how it was stored. Fast recovery and good storage keep FFA down and materially improve the price.
It can be processed through the HEFA pathway, subject to the feedstock being permitted under the relevant sustainability scheme and to adequate pretreatment. In practice its FFA makes it more common in renewable diesel and biodiesel than in jet fuel.
