Decarbonization of Coal Mining with Reclamation for Energy Plantations for Wood Pellet Production

Wood pellets are carbon neutral fuel so they do not add CO2 to the atmosphere, which is different from fossil fuels such as coal which are carbon positive, namely adding CO2 to the atmosphere, which is part of the climate solution. Net zero emissions and decarbonization efforts are also accelerated by the use of carbon neutral fuel such as wood pellets. This is an important and main reason for the production of wood pellets in mining companies, especially coal, so that they can reduce CO2 emissions from burning coal. Post-mining land at coal companies can be reclaimed in another form, namely by creating energy plantations as raw material for wood pellet production. There are millions of hectares of ex-mining land that have potential as energy plantations, for more details read here.

Cofiring coal with biomass is an easy and cheap entry point for coal power plants to gradually use renewable fuels. Over time the biomass to coal cofiring ratio can continue to be increased so that CO2 emissions from carbon positive coal are reduced. Technically, a cofiring ratio of up to 5% does not require equipment modifications at the coal power plants. The amount of CO2 that can be replaced (carbon offset) with carbon neutral fuel such as wood pellets also has the opportunity to get carbon credits or other compensation. The implementation of a carbon tax also increasingly encourages a reduction in the use of coal in power plants and vice versa, namely encouraging an increase in the use of renewable fuels, especially wood pellets in these coal power plants or an increase in the cofiring ratio, even ideally fulfiring can be done, namely 100% using renewable fuel.

The implementation of a carbon tax in Indonesia is planned for 2025, after several postponements. The lowest carbon tax rate is IDR 30 per kilogram of carbon dioxide equivalent (IDR 30,000 or around US$ 2 per ton of CO2 equivalent). This tariff is actually much smaller than the initial proposal of IDR 75. With a tariff of IDR 30, Indonesia is one of the countries with the lowest tariff in the world for carbon tax. By burning 1 ton of coal, it will produce around 3 tons of CO2 emissions, so the carbon tax imposed will reach IDR 90,000 per ton of coal. Meanwhile, the use of renewable or carbon neutral fuels such as wood pellets is not subject to the carbon tax. Apart from that, mining companies are also obliged to reclaim their post-mining land, which if not done will be subject to heavy sanctions.

Energy plantation plants are a type of pioneer plant, easy to grow, efficient at using water, fertilize the soil and have strong roots to resist erosion. Legume types such as calliandra and gliricidia are commonly used as energy plantation plants. Integration of energy plantation product processing must be carried out so that optimal benefits are obtained, namely the main product is wood for wood pellet production, leaves as ruminant animal feed and honey as high quality food. The energy plantation must also be created to be able to produce sustainably, namely by maintaining a balance between wood productivity for wood pellet production, environmental functions in the form of maintaining erosion and groundwater, and the volume of wood harvested must not exceed the growth rate or be at least the same (carbon balance) and using by-products for additional revenue, such as using leaves for animal feed and honey from honey bee farms.