Utility Business for Palm Oil Mills

When the priority is to obtain the maximum profit, good environmental management and ease, efficiency and stability of production as an option, then utility matters at the palm oil mill may be collaborated with other parties. This specialization becomes important because of the priority choices above. The utility problems in question are electricity and steam. Electricity is produced from a steam turbine and steam is produced from a boiler. High pressure steam enters the steam turbine to drive a generator and produce electricity and low pressure steam output from the steam turbine is used for the fresh fruth bunch (FFB) sterilization process. Water treatment for boiler feed is also part of the utility problem, as well as for boiler operations to produce output in the form of electricity and steam.

Regarding cooperation or business models, palm oil mills can pay for the electricity and steam they receive. But because the fuel or energy to produce electricity and steam comes from palm oil mills, of course the price is cheaper. If currently almost all palm oil mills use their boiler fuel from mesocarp fiber and palm kernel shell (PKS), then with this specialization it is possible for palm fiber (mesocarp fiber) and empty palm fruit bunches (EFB) to be used as fuel or energy sources while palm kernel shells (PKS) can 100% sold and even exported. Palm kernel shells (PKS) as biomass fuel can be sold directly and are in great demand, and are also the main competitor for wood pellets in the global biomass fuel market.

Under these conditions, there are efforts to increase the efficiency of utility production such as steam and electricity as optimally as possible, not only combustion technology with static grates, moving grates, reciprocating grates to fluidized beds, but it is even possible to use pyrolysis. EFB or empty palm fruit bunches, which were previously unprocessed and were an environmental problem, can become a potential energy source so that 100% of the palm kernel shells / PKS from palm oil mills can be commercialized/sold. And even if the utility provider uses pyrolysis, biochar will also be obtained. Biochar provides many benefits related to soil fertility and climate.

Upgrading the Palm Oil Industry in Indonesia

With Indonesia's palm oil plantation area reaching around 15 million hectares and palm oil mills reaching 1000 units, efforts to upgrade the palm oil industry are important and strategic. Indonesia's palm oil or CPO production per year is around 46 million tons (while Malaysia is in second place at around 19 million tons/year). Efforts to upgrade the palm oil industry will increase productivity/efficiency, sustainability and encourage the creation of new products/markets as well as added value for palm oil. Things that can be upgraded include a number of key areas including bioenergy, biomaterials and oleochemicals, food and feed, soil fertility (land, soil and cultivation), post-harvest and processing, waste processing and the environment as well as socio-economics, management and business.

One concrete thing that can be done is the production of biochar from palm oil mill waste, especially empty fruit bunches (EFB) and palm fiber (mesocarp fiber). Biochar production by pyrolysis will produce excess energy (syngas & biooil) which can be used as boiler fuel in palm oil mills. Furthermore, the application of biochar with fertilizer on palm oil plantations will become slow release fertilizer (SRF), thereby increasing nutrient use efficiency (NUE). The condition of many oil palm plantations on acidic soil will also increase in pH when biochar is applied.

In palm oil plantation operations, fertilizer is the highest cost component so that if you can increase fertilizer efficiency it will provide significant benefits. The use of biochar is the solution, namely SRF. SRF also minimizes environmental pollution due to the use of fertilizer. Meanwhile, in palm oil mill operations, energy is a vital component, and if this can maximize the use of waste that has no economic value, it will certainly be very economical apart from of course overcoming environmental problems caused by this waste. Currently, palm oil mills use palm fiber (mesocarp fiber) and some palm kernel shells (PKS/palm kernel shell) for boiler materials, while generally the empty fruit bunches (EFB) have not been used, even though these palm kernel shells (PKS) can be sold directly and sell well. This means that if the energy source only comes from palm fiber (mesocarp fiber) and empty fruit bunches (EFB), 100% of the palm kernel shells (PKS) can be sold. This can be done by pyrolysis.

Biochar in the soil can last hundreds or even thousands of years. Biochar which comes from agricultural waste such as empty fruit bunches (EFB) and palm fiber (mesocarp fiber) will become a carbon sink through carbon sequestration, so that the concentration of CO2 in the atmosphere is reduced as long as the biochar is not decomposed. From a climate perspective, this is very beneficial and later you can get compensation in the form of carbon credits. A number of standards and verification methods to facilitate monetization are currently being developed.

Empty fruit bunches (EFB) and palm fiber (mesocarp fiber) are waste from palm oil mills, whereas biochar is applied in palm oil plantations. Management in the palm oil industry generally separates the mill division and the plantation division, so new management methods are needed if biochar production using pyrolysis is carried out. Apart from using biochar for core plantations (managed by palm oil company), it can also be used for plasma plantations (managed by farmer).

Biofuel or Electric Vehicle First?

The decarbonization trend continues and has penetrated almost all lines, including the transportation sector. In the transportation sector, there are 2 things that can be done, namely the use of fuel from renewable energy or biofuel and the use of emission-free vehicles such as electric vehicles. In vehicles with 100% renewable energy or biofuel, the emissions produced are carbon neutral (even though the emissions contain CO2) while electric vehicles produce no emissions at all because there is no combustion process in the operation of the electric vehicle.

Currently, the majority of vehicles are vehicles with internal combustion engine technology, so they use fuel for their operations and the most widely used fuel is fossil fuel, especially in liquid form or liquid fuel. To achieve carbon neutral conditions, this fuel must be replaced with 100% biofuel. But currently, even though the use of biofuel has been carried out, the portion is not yet 100%. Indeed, technically there are restrictions on the use of biofuel so that it cannot be 100% like bioethanol, so this is also a concern. However, of course efforts to use 100% biofuel will also be the main target, apart from the emissions factor to achieve carbon neutral conditions, internal combustion engine technology is also the majority so it only needs minor modifications or even no modifications at all.

Another fact is that currently most electric vehicles still use electrical energy sources from fossil fuel power plants, especially coal. Even though these electric vehicles are non-emissions, basically the energy source is fossil energy, only the locations are far apart. Electric cars as a new product are also generally more expensive, even double or more than cars in general. This condition also affects the amount of use of the cars or electric vehicles themselves.

Indonesia as a tropical country has enormous potential as a biofuel producer because various plants or trees can grow well. Even though palm oil is currently the largest vegetable oil producing crop and Indonesia is ranked first in the world with an area of palm oil plantations reaching around 15 million hectares, the oil from palm oil competes with edible oil and the maintenance costs are high. not cheap. Meanwhile, vegetable oil from energy trees such as nyamplung (calophyllum inophyllum), apart from its oil productivity, is not inferior to palm oil, and the oil does not compete with edible oil, read more details here. Apart from that, the nyamplung tree, which grows well in areas near the coast, also provides its own advantages, namely because Indonesia has the second longest coastline in the world after Canada, namely 99,093 km and the nyamplung tree is also a multi-purpose tree. Meanwhile, biofuel from biomass waste can also be done, but because production costs are still expensive, it still requires a number of stages for implementation.

Under these conditions, the development of biofuel, especially from trees such as nyamplung, should be prioritized. Meanwhile, even though electric vehicles are emission free, their electricity source still uses fossil fuels. Efforts to reduce fossil fuels in power plants by cofiring have been carried out but the portion is still very small, so the climate benefits are not yet significant. If the source of electrical energy can be 100% renewable energy, then the use of electric vehicles can also be said to be like the use of 100% biofuel in internal combustion engines.

From Carbon Neutral to Carbon Negative : Development of Batteries, Wood Pellets, Carbon Capture and Storage (CCS) and Biochar

Research to develop large capacity batteries continues to be carried out so that electricity produced from renewable energy power plants such as wind and solar can be stored and used at any time. Electricity generation that comes from wind and sun is intermittent, that is, at any time the wind may not blow or there will be thick clouds or at night so there is no sunlight and electricity cannot be produced. In this condition, it is necessary to use a large capacity battery that can store this electricity. It is predicted that the development of this battery will not only require large costs but will also take a long time. It is predicted that it will take several decades for this battery to become a reality.

The current electricity supply, the majority of which still uses fossil fuels, especially coal, which has been proven to be environmentally unfriendly (carbon positive), needs to continue to be reduced and the portion of renewable energy in the form of wood pellets (carbon neutral) added by cofiring. The portion or ratio of cofiring can continue to be increased and can even be 100% using wood pellets (fulfiring). If the coal power plant can be changed 100% to a biomass or wood pellet fueled power plant, the power plant will become environmentally friendly or carbon neutral. And at a time when renewable energy sources are abundant and the electrical energy products can be stored in large capacity batteries, it is possible that power plants using combustion technology could be closed or stopped.

The use of wood pellets can be said to be an intermediate solution before the battery era. Large capacity wood pellet production will ideally use energy plantations as a supplier or source of raw materials. Fast rotation crops and plantations from legume groups such as calliandra and gliricidae are the right choice for these energy plantationns. Energy plantations themselves can act as carbon sinks or absorb CO2 from the atmosphere. With good management so that the volume of biomass or wood harvested is smaller or maximum equal to the plant growth rate, the function of energy plantations as carbon sinks continues to be maintained. Using wood pellets as carbon neutral fuel while managing energy plantations as a carbon sink or negative carbon provides optimal environmental benefits.

 

The use of 100% biomass fuel in power plants is carbon neutral, the same as the use of renewable energy from wind, water and sun. However, the use of biomass energy, especially wood pellets, is not intermittent and is always available when needed. Using batteries will be a solution to the intermittent problem. This 100% biomass fueled power plant can become carbon negative when using CCS (carbon capture and storage) devices. And this is very good because it can return the CO2 emitted into the atmosphere back to the bowels of the earth (carbon negative). And when coal power plants are installed with CCS devices, they will become carbon neutral. However, the CCS device is still very expensive and its operation is also not cheap.

And when the battery era arrives so that electricity generation using combustion technology is closed or stopped, the wood from the energy plantations that have been created will be used as raw material for biochar. It is possible that the wood from these energy plantations is still made into wood pellets to save transportation costs and make handling easier and then taken to pyrolysis facilities for biochar production. Biochar used in agriculture has dual benefits, namely improving soil quality and as a carbon sink. Using biochar with fertilizer will create slow release fertilizer, thereby increasing NUE (nutrient use efficiency) for plants, thereby saving fertilizer costs and reducing environmental pollution. Biochar is able to last or not decompose for hundreds of years or is permanent in the soil. The more biochar used, the more benefits it will provide for soil fertility and climate. Biochar as a carbon sink or carbon sequestration is also carbon negative. Energy plantations with good management will become carbon sinks and the biochar is also a carbon sink in the form of carbon sequestration, of course this provides the most optimal climate benefits.

Palm Kernel Shell (PKS) Exporter Company and Developing Wood Pellet Production Business

PKS loading for export

The decarbonization trend that continues to increase along with the increasing demand for biomass fuel has made a number of palm kernel shell (PKS) exporting companies plan to expand their business into wood pellet production. Established palm kernel shell exporters usually have sales contracts with overseas buyers, which can be short-term or long-term contracts. This palm kernel shell exporters only collect palm kernel shells from a number of palm oil mills/CPO factories, then cleans them and simply dries them before they are ready to be shipped. Indeed, there are also a number of overseas buyers of palm kernel shells which do not need cleaning and drying so the price is also cheaper. Cleaning palm kernel shells usually uses a sieve (screening) machine, either a vibrating screen or a rotary screen, for more details, you can read here. Meanwhile, for drying, it is usually only aired by occasionally turning over the pile of palm kernel shells with an excavator.

Palm kernel shells and wood pellets are two popular biomass fuels in the global biomass fuel market. Palm kernel shells are the main competitor of wood pellet products because they have almost the same properties such as calorific value, ash content, size and so on, but palm kernel shells are usually cheaper because they are a by-product or waste from palm oil mills and only require a simple process to produce then exported. Meanwhile, wood pellets, although the raw material can come from woodworking industry waste or sawmills, require a more complex production process and investment in the equipment required. 

Typical Circulating Fluidized Bed (CFB) power plant in Japan

Palm kernel shells and wood pellets are mostly used as fuel for power plants abroad such as Japan and Korea. Wood pellets can be used in almost all coal power plants by cofiring, while palm kernel shells are more limited. This is mainly because crushing palm kernel shells and mixing them with coal powder (cofiring) in pulverized combustion is more difficult. Palm kernel shells can be used 100% in power plants with fluidized bed or stoker technology. And currently quite a lot of power plants in Japan use fluidized bed technology.

And because they are in the same market, palm kernel shell exporters are also very likely to know the need for wood pellets. Buyers of palm kernel shells abroad are usually also buyers of wood pellets too. The practice of collecting palm kernel shells from palm oil mills is almost the same activity as collecting wood waste from wood processing industries and sawmills, so it should not be difficult for exporters of palm kernel shells. But creating energy plantations as raw material for wood pellet production is the ideal solution. Collecting wood waste or collaborating with the wood industry that produces this waste is an intermediate solution and energy plantations are the ideal solution. Thus, it is very reasonable for palm kernel shell exporters to expand into the wood pellet production business.

Projections for Indonesia's Future Waste Management: Production of RDF and Biochar Enriched Compost

Photo taken from here

The MSW problem is a concern in a number of areas currently. This is because MSW, apart from being a serious environmental problem, also has an impact on social problems. The public is starting to become more aware of this MSW problem, especially for urban communities who no longer have land to pile up or burn their MSW and what's more, final disposal sites are no longer able to accommodate the MSW produced by these communities. Flooding, groundwater pollution, air pollution are some of these environmental problems which, if not addressed, will cause a number of serious environmental problems. Public awareness regarding waste should be getting better day by day, and various efforts should be made to overcome it.

One of the composting unit in Indonesia

Currently the central government and regional governments are working hard to overcome the waste problem namely this MSW. Despite hard efforts, generally only a small portion of the MSW can be handled and most of it is still accumulating and accumulating so that it continues to pile up. An example is the current MSW problem in Jakarta, the capital of Indonesia namely with an average daily waste volume of 7,500 tons/day, only around 1,000 tons per day can be processed. With the RDF production unit at Bantar Gebang TPST, with raw materials of 2,000 tons of waste per day originating from 1,000 tons of new MSW and 1,000 tons of old waste (landfill mining), approximately 700 tons/day of RDF is produced. So with only 1,000 tons/day of new waste that can be processed, that means only 13% of the total daily waste volume. Meanwhile, conditions in a number of regions in Indonesia are also almost the same.

 

Future MSW processing must be able to process the 100% of MSW or have zero waste. Apart from that, the MSW processing product must also have useful and economic value. One of them is large capacity RDF and compost production. Almost all organic waste can be composted, while non-organic waste, especially plastic, can be made into RDF. Other waste such as iron, glass, ceramics and metals are separated first so that it does not interfere with the RDF and compost production process. RDF is commonly used as an alternative fuel, especially in cement plants. However, with high chlorine content, the use of RDF in cement plants needs to be limited.

Sometimes the distance between RDF production and the cement plant makes transportation costs expensive and RDF products become uncompetitive. This means that RDF needs to be compressed into RDF pellets. By increasing the density of RDF into pellets, apart from saving transportation costs, it will also make handling, storage and use easier. Meanwhile, biochar can be added to compost to improve its quality. Biochar is added during the composting process and later there will be more nutrients contained in the compost. Biochar with its micro pores will be used as a place to store these nutrients. Apart from that, biochar is used as a carbon sink / carbon sequestration and can survive in the soil for hundreds or even thousands of years. This also has the potential to provide additional income from carbon credits. Biochar production by pyrolysis will also produce heat energy which can be used for drying waste in RDF production and pyrolysis of organic materials.

Decarbonization in the Steel Industry

World steel production reached 1.9 billion tons in 2020, with China accounting for around half and followed by European Union countries. Germany, with annual production of around 42 million tonnes, is the largest steel producer in Europe or around a quarter of European steel production, while the other quarter is Italy and France, followed by Belgium, Poland and Spain. The steel industry contributes 8% of CO2 globally, each ton of steel production produces an average of 1.85 tons of CO2 emissions and compared to iron ore mining, iron and steel production contributes much more to CO2 emissions. Efforts to decarbonize the steel industry begin with the use of renewable energy for its smelters. Biomass-based fuel in the form of charcoal which has a high carbon value can replace the use of coke derived from coal. And the use of hydrogen from renewable energy sources is the ultimate target for decarbonization in the steel industry. 

Currently, the steel industry mostly uses coal as fuel using blast furnaces. To reduce carbon intensity, natural gas is used as fuel. The use of gas fuel in the form of natural gas is also a transition medium and basically because it comes from fossil fuels it is also a carbon positive fuel. Apart from that, the use of CNG in the form of natural gas is also a transition fuel before switching to hydrogen from renewable energy. The use of biomass-based carbon fuel in the form of charcoal has a better effect on the climate because it is a carbon neutral fuel. Apart from that, technically, because it is a solid fuel, the same as coal, practically there is not much or even no need for changes or modifications to the smelting furnace. The availability of high quality charcoal, large volumes and continuous supply are still the main obstacles.

The use of charcoal for metallurgy or steel making has actually become commonplace for some time. In the early 1900s, world charcoal production experienced its heyday with production of more than 500 thousand tons. In the 1940s, charcoal production decreased to almost half of what it was in the early 1900s, due to other carbon materials, namely coke from coal, replacing charcoal in the manufacture of metals.

With the current conditions of using coal as the main fuel in smelting furnaces or blast furnaces, slag will be produced. Slag or GGBFS (Grounded Granulated Blast Furnace Slag) from the steel plant is used in cement plants as a cement additive or SCM (supplementary cementious material) thereby reducing the portion of clinker in cement production. In the cement plant itself, the more slag or SCM used, the more clinker use is reduced, thereby also reducing CO2 emissions. In cement production, the clinker production section contributes the most to the CO2 emissions produced, so the use of slag or SCM is part of decarbonization in cement plants. It is estimated that around 70% of world steel production uses the blast furnace or BF-BOF process which produces quite a lot of GGBFS, even in China more than 90% of steel production uses the BF-BOF process. It is worth noting that the decarbonization of the steel sector is resulting in a shift away from blast furnaces, which will impact the availability of GGBFS worldwide in the coming decade. However, this change will occur slowly and gradually and, in the meantime, there are a number of GGBFS that will be available for use as SCM to reduce the carbon footprint of cement and concrete.

To be able to produce charcoal in large quantities, raw materials are also needed in large quantities. Raw materials in the form of biomass, especially wood, can be produced from energy plantations. Energy plantations from fast growing species and short rotation crops will be suitable to meet the need for raw materials because apart from the fast harvest period they also have high productivity. Apart from that, there is no need to replant every time it is harvested and it is easy to grow and easy to maintain. To produce steel per ton, an average of 6,000 MJ of energy is required (equivalent to 50 kg of hydrogen) or the equivalent of 200 kg of charcoal and requires around 600-800 kg of wood biomass as raw material. Apart from raw materials from energy plantation wood, raw materials from agricultural and plantation wastes can also be used.

The future palm oil industry could produce hydrogen from biogas. Each ton of steel will require 50 kg of hydrogen, while each palm oil mill with a capacity of 30 ffb/hour can produce 1 MWh of electricity, while the production of 1 kg of hydrogen requires 50 KWh, so that with the capacity of the palm oil mill it can produce 20 kg of hydrogen. Areas with a high concentration of palm oil mills such as Riau province could create a hydrogen pipeline network for environmentally friendly steel mills.

With higher prices for steel produced with renewable energy (green steel), market share is also limited. Currently, only certain uses, such as automotive, buy such premium or green steel. Decarbonization efforts in steel industries can also be carried out in stages, along with the development of renewable energy. With the increasing supply of renewable energy, the price will decrease so that environmentally friendly steel (green steel) will also become more competitive in price. New steel industries can be built close to these cheap renewable energy sources so that green steel production can become competitive.