Production of Wood Pellets or Charcoal Pellets?

Wood pellets have become a hot talk and tempting business opportunities today. Not a few large companies are planning to produce wood pellets in Indonesia, especially with raw materials from energy plantations. Of course there are still many who remember also some time ago Indonesia was highlighted by the world for its function as the world's lungs with its tropical forests as CO2 absorbers and compensation for carbon trading. Furthermore, will in the current era Indonesia will become the world's main supplier of biomass fuel which is carbon neutral fuel? It is not surprising that Indonesia is a destination country for investment in biomass production, this is because of its tropical climate, available vast land and fertile soil. Almost all regions in Indonesia can be planted for various types of plants and this condition is different from subtropical countries and dry regions such as deserts. Of course, it is important that the business activities of the biomass production and its derivatives provide fair benefits to the Indonesian citizens and government. Do not let the people only become objects even in their own country, like dead chickens in a rice barn. If that happens, then it's really outrageous. The Muslims can capture and take advantage of these opportunities in a way that is syirkah (sharia business cooperation), more detail can be read here.

History has also taught that natural wealth but not managed properly, only invites invaders. Remember, Indonesia was colonized, especially in the military, political, educational and economic terms of 350 years, because initially spices and certainly new style of colonialism (neo-colonialism) also could not happen again for the present and the future. Why are wood pellets so popular? The first reason is the high demand for wood pellets which is driven by a number of pro-environment policies, which in Asia, especially Korea and Japan. The second reason is that electricity generation is one of the biggest sources of pollution with very large CO2 emissions, so it needs to be reduced and even needs to be replaced with carbon neutral biomass power plants. The third reason, the production of wood pellets is cheaper than fuels such as bioethanol. A number of analyzes suggest that bioethanol from lignocellulosic biomass is newly produced when oil prices are above $ 100 / barrel while the current oil price is around $ 80 / barrel.

The main users of wood pellets are large power plants, so that production volume and continuity are needed. A number of strict rules have been applied to the production of wood pellets as examples of quality standards, and the continuity of raw material supply as evidenced by certain certifications such as FSC. The traded wood pellet products must meet these standards or criteria. Long contracts are also commonly used for buying and selling wood pellets. Looking at a number of things above, it can be understood if players or producers of wood pellets must have large capital. Wood pellet production is currently estimated at 20 million tons with the United States and Canada as its main producers, while Europe is the main user, followed by Japan and Korea in the Asian region.

Charcoal is an energy product from biomass processing, especially wood. Wood charcoal has been known for a long time and is produced in a number of places. The process of producing wood charcoal is generally traditional, takes a long time and the quality is not uniform. According to FAO, global wood charcoal production in 2015 was recorded at more than 50 million tons and about half of it was produced in Africa. Every year Europe imports 1 million tons of charcoal, as well as Saudi Arabia and Middle Eastern countries import more than 1 million tons of charcoal. The use of charcoal is mostly the household sector with retail (retail) distribution. In addition charcoal is also used for metallurgy, agriculture (biochar) and activated charcoal (activated carbon) raw materials.

Charcoal production and charcoal marketing have also not been treated by strict rules such as wood pellets. This is mainly due to the large number of charcoal producers, with a small average production and traditional production technology. In addition, the market or buyer also does not require large volumes and long-term contracts. The quality factor remains an important standard, especially for the export market. But it could be that more stringent rules will also apply to production and marketing, given the potential damage caused. The low conversion of traditional charcoal kiln, which is an average of 15%, makes the need extra for wood raw materials, so that to produce 1 million tons of raw materials is needed about 6.5 million tons of wood. The approach to using efficient technology is increasingly urgent especially to serve large and continuous needs. Pyrolysis or continuous carbonization is the solution to this, with a conversion rate to charcoal reaching 30% or almost one third. With this efficient technology, only 3 million tons of wood is needed, or only half that means saving about 3 million tons of wood raw material.

To improve efficiency and ease of transportation and handling and its use, so charcoal can be made into pellets. The heat value of charcoal which is higher than wood, which is about 2 times, also makes charcoal pellets have higher calories than wood pellets. Unlike the production of wood pellets which do not require additional adhesive, because lignin in the wood itself also functions as an adhesive when pressed (compressed) and high temperature, for charcoal pellets require additional adhesive in the form of tapioca flour, this is because lignin has decomposed when carbonization process (pyrolysis). Another advantage of the pyrolysis process is that a number of byproducts provide additional benefits, namely: biooil as a burner / boiler fuel, a ship fuel mixture and can be upgraded to vehicle fuel in general, then syngas which can be used for gas engine fuels for electricity production and wood vinegar which can be further processed into biopesticides and liquid organic fertilizers. For a production capacity of 200 tons / day of INPUT or approximately 70 tons of charcoal / day (OUTPUT), the electricity output produced can reach 5 MW with raw wood chips or sawdust.

The continuity of raw materials for charcoal production is also the same as the production of wood pellets, namely from the energy plantation so that it can continue continuously (sustainable). Optimizing energy plantations with sheep farming plus cattle and honey bee farming is the best option for optimizing land use. In conclusion there are two attractive options in the current biomass fuel business, namely the production of wood pellets with strict requirements ranging from raw material sources and wood pellet product quality, but can get a long-term wood pellet purchase contract that is up to 20 years or the production of charcoal pellets, which the conditions are not as strict as wood pellets, then in the carbonization or pyrolysis stage a number of by-products are also produced which are also profitable, even for electricity it is also very possible for long-term contracts to sell it to PLN with a PPA (Power Purchase Agreement) mechanism for 25 years but for products the product cannot be a long contract. Based on the aforementioned matters, an in-depth study is needed before executing one or even both of these opportunities.