Monday, April 24, 2017

Wood Pellet, PKS and Biomass Power Plant Market in Japan


PKS (Palm Kernel Shell) to be a hot topic of renewable energy source or fuel commodity currently in Japan. This is because PKS is the cheapest biomass fuel and is currently still available in large quantities. PKS is a waste of palm oil mill from CPO production. So it is automatically PKS is widely available in areas of palm oil mill or CPO producers, namely in Indonesia, Malaysia, and Thailand. Selection of PKS as fuel also its characteristics that can be poured, high calorific value and high density also. 
What about wood pellets? The world's leading producer of wood pellets today, certainly not Indonesia or other Southeast Asian countries, but North American and Scandinavian countries. Even for Indonesia itself wood pellet is a new thing, so its production capacity also not big. Wood pellet price is more expensive than PKS. Most wood pellets are produced in Indonesia from wood waste such as sawdust, wood shaving, plywood waste and so on. The development potential for quantity enlargement is also very possible with energy plantations. Technically the properties of wood pellets are not much different from the PKS.
Japan biomass power plant status map, red means already operating, yellow means in the development stage, blue means in the planning.
Biomass is one of the alternatives  fuel of power plants in Japan, following the accident or destruction of the Fukushima nuclear power plant (NPP) in 2011.  PKS becomes the favorite choice of biomass power plants there. Most of these biomass power plants use PKS as their energy source, and only a few operate with wood pellets. The large number of biomass power plants built, automatically also requires a lot of fuel supply. Most of the biomass power plants are built in 2015 and by 2017 some of them are in operation and by 2019 it is estimated that they are all operating, so it can be imagined the need and competition to get the supply of the PKS.

Japan is a country that almost all rely on imports to meet domestic needs, this is because the potential of the natural resources is minimum there, including the energy sector. With a population of approximately half of Indonesia, their energy consumption is almost 5 times Indonesia, so practical energy needs including fuel is also huge. The biomass power plant that uses wood pellets predicts that in the next 1 - 2 years there will be a shortage of supply of PKS, so early on it has anticipated, although at present the advantage of selling electricity is smaller, because of its more expensive raw material (wood pellet) prices. With this experience they will confident if next years wood pellets become more common fuel. 
PKS must meet the specifications before being exported to the destination country. Some key specifications for PKS are: moisture content, calorific value and impurities or contaminants (foreign materials). All three variables must meet a certain level to achieve export quality. Japanese markets or their consumers generally require contaminants from 0.5 to 2%, while European 2% - 3%. A simple process can be done to get the quality of the PKS as above. Japan usually buys with a volume of 10,000 tonnes per shipment or their import, so for PKS providers must prepare a sufficient stockpile for the PKS. The location of PKS stockpile that close to the seaport is the ideal condition to facilitate transportation to shipment. 
Wood pelletproduction process is more complex than PKS, so wood pellet is categorized as finished product. PKS can be said raw product because of its industry activity is very minimal and simple, as explained above. In the production process of wood pellet will include selection of raw materials and the properties namely : cleanliness, drought, size, shape and hardness. Based on the characteristics of these raw materials, the next process varies until become the wood pellet products. The wood pellet production process is very much like the wood briquette. The quality of wood pellet is generally viewed from its density, calorific value and ash content. Indonesia wood pellet export is not as big as PKS, it is also because of the limited producers of wood pellet itself. Japan buys wood pellets from Indonesia mostly for testing on their biomass power plants. Shipping or export by container is still common in wood pellet commodity because the volume is still small.

For short-term orientation exporting PKS is a profitable business. This PKS some time ago only waste that contaminate and unworthy then large amount of it only used for road hardening and so on, but currently become a “hot” commodity.  Wood pellets with raw materials from energy plantations by planting the legume types such as calliandra are medium-term solutions to meet biomass fuel needs in Japan.  Torrefaction followed by densification can be a long-term orientation, so the torrified pellets product is superior to wood pellets because it can save transportation and facilitate handling, hydrophobic and higher calorific value.
Torrified Pellets
Government Regulation namely Indonesian Minister of Finance Regulation No. 67/2010 on Stipulation of Export Goods Subject to export duties (BK = Export Duties) have purpose to push downstream or production of various derivative products from oil palm including PKS. But the fact is not much that happened in the field related to PKS. In fact, many PKS providers are experiencing setbacks and even closed their businesses. This BK has made the price of PKS higher, thus making the market demand decrease. The higher the BK for the raw product and the lower the BK for the finished product the downstreaming will be faster, but it must be done through the process gradually, well-planned and comprehensive. Ideally the BK for the finished product is zero percent. Does the government ask people to wait next 2 years when PKS prices are high because their needs are projected to rise sharply? We don't know. While the best scenario is to reduce taxes so that the industries can grow so then they can start develop new products. Torrefaction of PKS becomes torrified PKS becomes the best solution for next development, because upgrading of PKS quality will give more economic value added. Carbonization or pyrolysis of PKS to PKS charcoal (PKSC = palm kernel shell charcoal) and then followed by densification into PKS charcoal pellets is also an attractive alternative.

Friday, April 14, 2017

EFB Densification To CPO Downstream Industries


Energy is generally the highest cost component in the production process.  Energy savings would give a significant impact on production costs and product prices. So that the energy must be obtained at a low cost for production efficiency. Utilization of wastes available is a surefire way to get the production efficiency, especially these wastes generated daily is available or even with a large number or capacity.

EFB (empty fruit bunch) is waste that is generated every day in the palm oil mill or CPO factory. The EFB volume or capacity pretty much every day, for example: the CPO mill with a capacity of 30 ton FFB (fresh fruit bunch) / hour will be generated tankos 8.1 tonnes / hour (5.7 tons of water, 2.4 tons of dry weight) or 162 tonnes each day (114 tons of water, 48 tons of dry weight). EFB utilization for energy source in refining or downstream of CPO, is the perfect solution for waste management and the source of energy.


EFB is wet waste of palm oil and large size from the CPO mill can not be directly used but must be processed in advance so that a fuel or energy source ready. Densification or compaction of EFB into pellets or briquettes is the solution to fuel or energy source that is ready to use it.

Since the Government implemented customs exit (BK = Bea Keluar in Indonesian) CPO, downstream palm oil industry in Indonesia is growing. Finance Minister Regulation (PMK) No. 67/2010 on Stipulation of Export Goods Subject BK and BK Rates mentioned, CPO exports imposed BK from 0-25% depending on price developments in Rotterdam, Netherlands. But the government ultimately lowering the amount of BK to 22.5% after the oil palm planters protest. Magnitude BK was arranged through the PMK No. 128/2011 regarding the Stipulation of Export Goods subject to export duty on August 15, 2011.  Analogy in the fields of petroleum, sell export crude oil should be restricted or even banned, but the industrial products which have undergone treatment so as to give a great added value supported and encouraged as much as possible. Indonesian palm oil product exports 60-70% is in the form of CPO, while the downstream products is only 30-40%. Refinery or refining of CPO was built and some have already been produced. In general, oil products are divided into crude palm oil (CPO), refined products of CPO, palm kernel oil (PKO) and refined products of PKO, biodiesel and oleo-chemical.

Purification or CPO refinery is now generally only owned by CPO large factories, while the small and medium-sized CPO factories in general do not have the CPO purification unit. Indonesian Palm Oil Association (GAPKI) noted that currently there are 1,911 oil palm industries in Indonesia which produce 23.5 million tonnes of crude palm oil (CPO) from an area of 8.2 million hectares of land. Utilization of wastes optimally so that the production process of CPO into zero waste and energy cost savings (energy efficiency), the target of all production processes. Briquetting and peletting of EFB as a source of cheap energy, environmentally friendly (carbon neutral) and sustainable for CPO refining industries means will drive the downstream palm oil products, and can be more affordable for the small and medium sized factories.

Simply put the small and medium palm oil mills are going process or producing EFB briquette thereby increasing revenue, making it more profitable than throw away or sold cheaply, while large factories which have CPO purification unit can buy it as fuel for the CPO refining. EFB briquettes price could be cheaper than other energy but still profitable for the EFB briquette producer. In addition to getting energy from burning EFB briquettes, the briquettes buyers will also get an additional benefit from the use of ash.

EFB Ash, photo is taken from here

Nutrient in Banana fruit and K have large portion on it
Effect of  K in banana yield
After EFB densification or compaction product in the form of briquettes or pellets then burned it will leave ash as combustion residue or waste. Ash has many benefits for the life of plants. Ash from EFB palm oil are also rich in various compounds, especially potassium (K) which is necessary for the plant with the percentage ranges from 30-40%.  Potassium has many functions for plant namely transporting sugar, to control stomata on the leaves by maintaining electro-neutrality in a plant cell, a co-factor of more than 40 enzime and reduce the occurrence of various diseases. The ash of EFB can then be used as organic fertilizer in the palm oil plantation itself and other plantations, like banana. The high content of potassium in bananas and leaves, indicating potassium is the most important nutrients in banana production. Some of potassium from the soil is taken or removed from the plantation in the form of a banana crop very much.

Banana fruit
Estimated loss of the potassium element from the soil through the banana fruit alone reached 400 kg (equivalent to 480 kg K2O) per hectare with a production of 70 tons of fruit. Based on these reason, the banana still require high amount of potassium supply, although the content of potassium in the soil is already quite high. A study on the banana tree with K2O giving as much as 1000 grams / tree has given a bunch of banana weighing 29.4 kg. Some plants are also less suitable and sensitive element of chloride (Cl), so that the portions need to be reduced or even eliminated. In the banana plant, for example the high chloride make banana seedling growth is disrupted and empty fruit. K2O is a compound in EFB ash can be used as ideal organic fertilizer, replacing KCl fertilizer. Potassium fertilizers on the market today KCl and K2SO4 (ZK). The price of KCl fertilizer is cheap because of subsidy, while K2SO4 (ZK) fertilizer is expensive, following the dollar exchange rate because it is not subsidized so that only generally only used by large estates/plantations. Whereas if our plants need potassium fertilizer and does not contain chloride, and ZK fertilizer price in the market is much more expensive, the EFB ash fertilizer that rich of K2O can be a perfect solution.

Coal Companies and New Business Development in Renewable Energy (Wood Pellets and PKS)

Coal is a fossil fuel which is one of the main causes of greenhouse gases, especially CO2, which causes global warming and climate change. E...