Market Condition of Biomass Fuel

Indonesia has enormous biomass production potential because of its tropical climate, and extensive land. Biomass fuels from Indonesia which are now exported are wood pellets and palm kernel shells. Wood pellet production is still low in the range of 80 thousand tons / year, while the palm kernel shell is quite high at around 10 million tons / year. Both types of biomass fuels are mostly for export while in domestic is not yet widely used. Why the domestic market itself has not used much of both types of biomass fuel? This is because people are still dependent on fossil fuels, namely LPG gas to cook households and coal in the industrial sector. The government policy to increase the use of renewable and alternative energy needs to be encouraged so that biomass energy is increasingly used.

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As for the export market, the need for biomass fuel needs is greater and projected starting in 2020 will increase sharply. For palm kernel shells (pks) buyers are Korea and Japan. Currently there are many sellers of palm kernel shells, while the number of buyers is still limited. This raises the business conditions that are less healthy because the price of these commodities will be more determined by the buyer (oligopsoni). The practice should be avoided and resolved if the number of buyers and sellers is relatively balanced. How to increase the number of buyers of biomass fuel from Indonesia? For export markets other than two countries namely Korea and Japan which have been importing mainly Indonesian palm kernel shells for power plants, then promotion to look for other markets, such as China and Europe may also do. Currently there have also been buyers from Taiwan and Thailand although their needs are still relatively small for its use for heating in industrial boilers.

The market condition of palm kernel shells (pks) is different from wood pellets. The difference is that the wood pellet producers spread almost all over the world, as the raw materials of woody biomass are located almost all over the earth. While sales of bulk Palm kernel shells are only done in Indonesia and Malaysia which is the biggest CPO producer in the world as well as the largest palm oil plantation owner in the world. In addition, a number of large countries are promoting its wood pellets on a large scale so that the wood pellet becomes very popular, so the demand is increasing sharply and some countries are starting to start for wood pellet production. Wood pellets are more famous and worldwide than palm shells although the properties or characteristics of both as biomass fuel are almost the same. This condition should further encourage the Indonesian government to promote the palm kernel shell. In global market conditions with the number of producers and users of wood pellets that are also quite balanced in number, the market conditions are better, although some countries become major producers and control most of the market. While domestic pellet market is still small so it still needs to be encouraged its use as well as its production. Along with the public unrest due to LPG gas scarcity, the motivation to use wood pellet is also getting bigger.

While also waiting for 2020, the market or users in the country also needs to be made so that will increase the number of biomass fuel buyers. The use of biomass fuel is proven to provide economic and environmental benefits if the management is good and sustainable. When the biomass fuel market is large, then production should also be added. If the palm kernel shells (pks) are palm oil waste depending on the amount of CPO production, wood pellets can be produced separately especially with raw materials from the energy plantation so that the capacity can be very large. Currently, Indonesia's CPO production is around 35 million tons/year with a palm oil plantation area of ​​12 million hectares. The energy plantation can be optimized with sheep farming and honey bee farming (see 5F project for the world!), As well as for palm oil plantations (see Transmigration For Sheeping In Palm Oil Pantation, Could It Be?). Empty fruit bunches and old palm oil trunk that are not productive can also be made pellets. And especially for oil palm pellets (OPT pellets) we currently have demand for volume of 1,000 tons / month, for those interested in becoming a manufacturer, please read more here.