Looking for PKS Supply from Indonesia

Palm Oil Mill

With the number of palm oil mills estimated to reach more than 1,000 units with 12 million hectares of palm oil plantations and more than 40 million tons / year of CPO, the potential of the PKS (palm kernel shell) produced reaches 15 million tons / year. With properties almost similar to wood pellets and prices are much cheaper, PKS is a prime of biomass fuel. But with the location of palm oil mills located mostly very remote and PKS still considered a waste for palm oil mills, often getting PKS supply is not easy. Infrastructure factors and the distance from export ports are often obstacles. This makes some palm oil mills only dispose of or stockpile PKS in locations around their mills. For palm oil mills that have the main business of palm oil or CPO, there are still many palm oil mills lacking attention to PKS as an additional source of income.

PKS Stockpile

Japan in particular is the largest PKS consumer, followed by Korea and several European countries. Their needs are estimated to be up to millions of tons every year. PKS exports to Japan and Korea are easier and often done because the distance is relatively close compared to Europe. PKS exports to Japan and Korea are usually quite economical with a volume of 10,000 tons per shipment while for Europe with a longer distance so in order to remain economical the shipping volume must be quite large, for example more than 25,000 tons per shipment. It is predicted that in 2021 or 2022 the needs of Japanese PKS will increase rapidly and then be relatively stable for the next 20 years. This is because biomass power plants can be said to be fully operational that year. The original plan for 2019 is that the biomass power plants can operate, but because of a number of obstacles, it will be delayed until 2021 or 2022. For more details about the delay in the construction of power plants in Japan, please read here.

The PKS comes from a palm oil mill and is collected somewhere to reach a certain volume so it is ready to be shipped. In order to be accepted by the power plant, PKS is cleaned from a number of impurities and dried until the water content is below 20%. Cleaning of the impurity is done by means of a sieve and drying is carried out only with the sun light or aerated. In addition to being able to maintain the cleanliness and dryness of PKS, especially in the rainy season, buildings such as large warehouses and concrete floors are needed. Even not a few PKS buyers from Japan require large warehouse buildings with concrete floors so that the quality of PKS can be maintained.

Typical Biomass CFB Powerplant in Japan

Fluidized bed combustion technology for electricity generation is widely used in Japan. With the circulating fluidized bed combustion technology, PKS can be used as fuel, even biomass pellets from agricultural waste can also be used for this technology. Fluidized bed combustion technology with lower operating temperatures than pulverized combustion makes it more tolerant of various types of fuel. It also means EFB pellets (empty fruit bunch pellets), and wood pellets from energy plantations can be used for fluidized bed combustion fuels.

Biomass power plants that rely on PKS for a period of 20 years certainly pay close attention to the continuity of PKS supply in that range. Anything that can interfere with the supply of PKS both in the short and long term will seriously concern them. As an example of the use of domestic PKS there is also an increasing tendency which could be an increase in the use of biomass as fuel or other sectors such as the production of activated carbon from PKS. In these conditions, of course they will make calculations regarding PKS supply and PKS exporter. The palm oil plantation extensification program will also increasingly supply PKS on the other hand because the palm oil mill will process FFB  (fresh fruit bunch) from the plantation and produce PKS as waste or by-products.

PKS Loading into Mother Vessel for Export Market

PKS players or exporters now generally have contracts with Japanese buyers both for spot trading and even for longer contracts. And not a few of the exporters have run out of PKS quota / supply for new buyers. In such conditions a new buyer must be able to find another PKS supplier / exporter. New suppliers may not have export experience and do not even have a number of facilities to process PKS, but only have a network with a number of palm oil mills as PKS sources or producers. This condition makes the PKS export unable to be carried out directly, but requires a number of preparations from both parties. Considering there are still more than 1-3 years from now on, both parties can prepare the business from now on, so that the long-term business can be carried out and as expected.