WARUNG KARBON: Community-Based UCO Aggregation for Carbon Credits and Energy Resilience in Indonesia

Abstract

Escalating geopolitical tensions, including Middle East and Russia-Ukraine conflicts, have disrupted global oil supply chains and pushed crude prices to five-year highs in 2026, severely straining Indonesia's fiscal capacity. As a net oil importer since 2003, consuming 1.5 million barrels per day against domestic production of 600,000 barrels, Indonesia's energy security is further eroded by Rupiah depreciation that amplifies import-denominated fuel costs. Domestically sourced renewable fuels are thus a strategic resilience imperative. Used Cooking Oil (UCO), widely discarded by UMKM causing soil and water contamination, offers a high-efficiency solution: life cycle analysis shows UCO biodiesel achieves a net energy ratio of 5.49, six times higher than fossil diesel (0.83) with a carbon footprint of only 0.22 kgCO2eq/kg. This paper proposes WARUNG KARBON, a community-based UCO aggregation model that addresses pollution, fossil fuel dependency, and Indonesia's carbon market supply shortage. UCO collected from UMKM at above-market prices is channeled to biodiesel and Sustainable Aviation Fuel (SAF) producers, supporting the government's B50 mandate effective July 2026, while avoided emissions are monetised as carbon credits on IDXCarbon under CDM AM0047, responding directly to the exchange's 98.5% trading volume decline in 2025. Using Business Model Canvas framework and CDM AM0047 carbon quantification, a pilot of 100 UMKM in Surakarta projects IDR 294-474 million annual revenue and 2,000-3,000 tCO2e carbon credits, requiring under IDR 40 million startup capital. By repositioning UMKM as active carbon and energy agents, WARUNG KARBON delivers innovation, resilience, and inclusive growth aligned with Indonesia's NDC commitments and the conference theme.

Keywords: used cooking oil; green entrepreneurship; energy resilience; carbon credit; IDXCarbon; inclusive growth