Palm Kernel Shell (PKS) Exporter Company and Developing Wood Pellet Production Business

PKS loading for export

The decarbonization trend that continues to increase along with the increasing demand for biomass fuel has made a number of palm kernel shell (PKS) exporting companies plan to expand their business into wood pellet production. Established palm kernel shell exporters usually have sales contracts with overseas buyers, which can be short-term or long-term contracts. This palm kernel shell exporters only collect palm kernel shells from a number of palm oil mills/CPO factories, then cleans them and simply dries them before they are ready to be shipped. Indeed, there are also a number of overseas buyers of palm kernel shells which do not need cleaning and drying so the price is also cheaper. Cleaning palm kernel shells usually uses a sieve (screening) machine, either a vibrating screen or a rotary screen, for more details, you can read here. Meanwhile, for drying, it is usually only aired by occasionally turning over the pile of palm kernel shells with an excavator.

Palm kernel shells and wood pellets are two popular biomass fuels in the global biomass fuel market. Palm kernel shells are the main competitor of wood pellet products because they have almost the same properties such as calorific value, ash content, size and so on, but palm kernel shells are usually cheaper because they are a by-product or waste from palm oil mills and only require a simple process to produce then exported. Meanwhile, wood pellets, although the raw material can come from woodworking industry waste or sawmills, require a more complex production process and investment in the equipment required. 

Typical Circulating Fluidized Bed (CFB) power plant in Japan

Palm kernel shells and wood pellets are mostly used as fuel for power plants abroad such as Japan and Korea. Wood pellets can be used in almost all coal power plants by cofiring, while palm kernel shells are more limited. This is mainly because crushing palm kernel shells and mixing them with coal powder (cofiring) in pulverized combustion is more difficult. Palm kernel shells can be used 100% in power plants with fluidized bed or stoker technology. And currently quite a lot of power plants in Japan use fluidized bed technology.

And because they are in the same market, palm kernel shell exporters are also very likely to know the need for wood pellets. Buyers of palm kernel shells abroad are usually also buyers of wood pellets too. The practice of collecting palm kernel shells from palm oil mills is almost the same activity as collecting wood waste from wood processing industries and sawmills, so it should not be difficult for exporters of palm kernel shells. But creating energy plantations as raw material for wood pellet production is the ideal solution. Collecting wood waste or collaborating with the wood industry that produces this waste is an intermediate solution and energy plantations are the ideal solution. Thus, it is very reasonable for palm kernel shell exporters to expand into the wood pellet production business.