Business Model Utilization of Palm Oil Empty Fruit Bunches to Maximize the Profit of the Palm Oil Industry

Palm oil empty fruit bunches  (EFB) are still a problem for the palm oil mills in general. The scenario of utilizing palm oil EFB as the goal should be able to cope well with the environment and provide economic benefits. Overcoming environmental problems is clearly a top priority and must be met, but the best use of EFB scenarios should also benefit the environment, both short term and even long term. Likewise for economic benefits, economic benefits should also be obtained in line with these environmental benefits, not counterproductive. That is the best scenario for the use of palm oil EFB, which is currently still a problem.

Palm oil plantations are the production base for palm oil mills, both CPO mills and PKO mills. Without the palm fruit produced from the palm oil plantation, the palm oil mill will not be able to produce. Operation of palm oil plantations is indeed not an easy and expensive thing. This is mainly a factor of the large usage fertilizer demand, so as to reach around 60% for the operation of the palm oil plantations themselves or with an area of ​​20,000 hectares of palm oil plantations, the cost needs reach more than 70 billion rupiahs ( (around US$ 4,766,667), for more details, please read here. The factor to reduce the cost of fertilizer and maintain the productivity of palm oil fruits or fresh fruit bunches and even increase them is the main target for the utilization or processing of palm oil  EFB. If the cost of palm oil plantation operations can be reduced, the greater the benefits. Biochar is a palm oil EFB processing product that can be used to reduce fertilizer requirements in the palm oil plantation. Biochar production using pyrolysis as shown below.

In the process of pyrolysis, besides producing the main product in the form of biochar, then biooil and syngas are also produced. The biooil and syngas are then used as fuel generator to produce electricity. In palm oil mills or CPO mills, fiber waste is also commonly found. The fiber waste is often just piled up and never utilized so it tends to pollute the environment. Though these fibers can be made pellets for export and become fuel for power plants. In addition, currently millions of hectares of old palm oil plantations in Indonesia need to be immediately replanting. Millions of tons of old oil palm trunks are also potential for pellet production. If old oil palm trunks are only left in the plantation so they rot and decay, then it will become lava media and subsequently become a beetle which actually disrupts productive palm oil plantations as well as other plantations, for more details read here. The production of pellets from fiber or palm trunks requires electricity and this can be supplied from the pyrolysis of palm oil EFB like the scheme above. Although palm oil mills also produce electricity, but generally only for the purpose of CPO production, so it is not enough for the production of fiber pellets and oil palm trunk pellets (OPT pellets). 

EFB Pellet is Difficult Accepted by the Market, It's Time for EFB Charcoal Briquette to Come as a Solution

When the EFB pellet properties cannot be accepted by the market, and the solution to upgrade the fuel is not yet economical, it needs a precise solution that can really solve the problem. Most power plants that use pellets as fuel use pulverized combustion technology, where pellet EFBs that have high chlorine levels are less acceptable. Chlorine is corrosive to metals so that the lifetime of the power plant is short. Whereas EFB pellets will be more suitable for power plants that use fluidized bed combustion technology, or even gasification, as a reference can be read here.

The right solution to overcome the EFB problem is to be processed into EFB charcoal briquette, which is by briquetting and followed by carbonization. The market segment of EFB charcoal briquette for barbecues is clearly very different from a power plant. So the product specifications needed are also a little different. Electricity needs for the production of EFB charcoal briquette can also use the EFB, so some of it is used for fuel in electricity generation and partly for the raw materials of the EFB charcoal briquette. The electricity needs for the production of charcoal briquette EFB are not as big as for palm oil mills and also do not need steam, so they do not have to use steam turbines, but it can be with Stirling engines which are external combustion engines, ORC (Organic Rankine Cycle) or even gasification.

EFB is the most solid waste produced by palm oil mills, as an illustration for palm oil mills with a capacity of 60 tons / hour FFB will produce 264 tons of EFB. The EFB continues to be produced and if it is not treated it will cause more problems. Most EFB is currently only as waste and untapped. As a profit-oriented business entity the palm oil industry, EFB processing or utilization is certainly sought not only to overcome environmental problems but also generate profits. And with the production of EFB charcoal briquette, InsyaAllah, this goal can be achieved. Although the quality of the EFB charcoal briquette will be below the sawdust charcoal briquette, which is woody biomass raw material, there should be a reasonable price for the charcoal briquette EFB product.

The main markets or users of sawdust charcoal briquette are Turkey, Middle East and Saudi Arabia, which use them to roast meat, especially lamb. The charcoal briquette EFB can be used for substitution or an alternative to the sawdust charcoal briquette. Even for the palm oil mill industry which has very large land, it can also develop the livestock industry on the land. Cattle farming in oil palm plantations has started to be done a lot, but what about sheep? Why are sheep farms not getting enough attention? I try to explain in writing here, to try to answer the question above. As in palm oil cultivation on its extensive plantations using certain techniques to maintain its productivity, so also with livestock businesses should also use certain techniques to maintain productivity such as rotation grazing.

The implementation of the EFB charcoal briquette business and livestock in the palm oil industry also requires processes, such as adjusting the company's organizational structure. If the current palm oil industry company organization is only divided into plantation units and CPO mill units, then for the development of new businesses it can create new divisions such as the EFB charcoal briquette division, sheep breeding division and so on, so that the potential of land and all resources can be optimized.

EFB Densification To CPO Downstream Industries

Energy is generally the highest cost component in the production process.  Energy savings would give a significant impact on production costs and product prices. So that the energy must be obtained at a low cost for production efficiency. Utilization of wastes available is a surefire way to get the production efficiency, especially these wastes generated daily is available or even with a large number or capacity.

EFB (empty fruit bunch) is waste that is generated every day in the palm oil mill or CPO factory. The EFB volume or capacity pretty much every day, for example: the CPO mill with a capacity of 30 ton FFB (fresh fruit bunch) / hour will be generated tankos 8.1 tonnes / hour (5.7 tons of water, 2.4 tons of dry weight) or 162 tonnes each day (114 tons of water, 48 tons of dry weight). EFB utilization for energy source in refining or downstream of CPO, is the perfect solution for waste management and the source of energy.

EFB is wet waste of palm oil and large size from the CPO mill can not be directly used but must be processed in advance so that a fuel or energy source ready. Densification or compaction of EFB into pellets or briquettes is the solution to fuel or energy source that is ready to use it.

Since the Government implemented customs exit (BK = Bea Keluar in Indonesian) CPO, downstream palm oil industry in Indonesia is growing. Finance Minister Regulation (PMK) No. 67/2010 on Stipulation of Export Goods Subject BK and BK Rates mentioned, CPO exports imposed BK from 0-25% depending on price developments in Rotterdam, Netherlands. But the government ultimately lowering the amount of BK to 22.5% after the oil palm planters protest. Magnitude BK was arranged through the PMK No. 128/2011 regarding the Stipulation of Export Goods subject to export duty on August 15, 2011.  Analogy in the fields of petroleum, sell export crude oil should be restricted or even banned, but the industrial products which have undergone treatment so as to give a great added value supported and encouraged as much as possible. Indonesian palm oil product exports 60-70% is in the form of CPO, while the downstream products is only 30-40%. Refinery or refining of CPO was built and some have already been produced. In general, oil products are divided into crude palm oil (CPO), refined products of CPO, palm kernel oil (PKO) and refined products of PKO, biodiesel and oleo-chemical.

Purification or CPO refinery is now generally only owned by CPO large factories, while the small and medium-sized CPO factories in general do not have the CPO purification unit. Indonesian Palm Oil Association (GAPKI) noted that currently there are 1,911 oil palm industries in Indonesia which produce 23.5 million tonnes of crude palm oil (CPO) from an area of 8.2 million hectares of land. Utilization of wastes optimally so that the production process of CPO into zero waste and energy cost savings (energy efficiency), the target of all production processes. Briquetting and peletting of EFB as a source of cheap energy, environmentally friendly (carbon neutral) and sustainable for CPO refining industries means will drive the downstream palm oil products, and can be more affordable for the small and medium sized factories.

Simply put the small and medium palm oil mills are going process or producing EFB briquette thereby increasing revenue, making it more profitable than throw away or sold cheaply, while large factories which have CPO purification unit can buy it as fuel for the CPO refining. EFB briquettes price could be cheaper than other energy but still profitable for the EFB briquette producer. In addition to getting energy from burning EFB briquettes, the briquettes buyers will also get an additional benefit from the use of ash.

EFB Ash, photo is taken from here

Nutrient in Banana fruit and K have large portion on it

Effect of  K in banana yield

After EFB densification or compaction product in the form of briquettes or pellets then burned it will leave ash as combustion residue or waste. Ash has many benefits for the life of plants. Ash from EFB palm oil are also rich in various compounds, especially potassium (K) which is necessary for the plant with the percentage ranges from 30-40%.  Potassium has many functions for plant namely transporting sugar, to control stomata on the leaves by maintaining electro-neutrality in a plant cell, a co-factor of more than 40 enzime and reduce the occurrence of various diseases. The ash of EFB can then be used as organic fertilizer in the palm oil plantation itself and other plantations, like banana. The high content of potassium in bananas and leaves, indicating potassium is the most important nutrients in banana production. Some of potassium from the soil is taken or removed from the plantation in the form of a banana crop very much.

Banana fruit

Estimated loss of the potassium element from the soil through the banana fruit alone reached 400 kg (equivalent to 480 kg K2O) per hectare with a production of 70 tons of fruit. Based on these reason, the banana still require high amount of potassium supply, although the content of potassium in the soil is already quite high. A study on the banana tree with K2O giving as much as 1000 grams / tree has given a bunch of banana weighing 29.4 kg. Some plants are also less suitable and sensitive element of chloride (Cl), so that the portions need to be reduced or even eliminated. In the banana plant, for example the high chloride make banana seedling growth is disrupted and empty fruit. K2O is a compound in EFB ash can be used as ideal organic fertilizer, replacing KCl fertilizer. Potassium fertilizers on the market today KCl and K2SO4 (ZK). The price of KCl fertilizer is cheap because of subsidy, while K2SO4 (ZK) fertilizer is expensive, following the dollar exchange rate because it is not subsidized so that only generally only used by large estates/plantations. Whereas if our plants need potassium fertilizer and does not contain chloride, and ZK fertilizer price in the market is much more expensive, the EFB ash fertilizer that rich of K2O can be a perfect solution.

Scrambling Biomass Waste Empty Fruit Bunch of Palm Oil: For Paper or Pellets?

In an effort to optimize the full potential of a number of oil companies are planning to process their wastes that resulting from the CPO production process. One of them is empty fruit bunches (EFB).  Two alternatives are being hotly debated is made pellets for energy and for the paper. Viewed from the business side, if it is profitable so is certainly not a problem for the production of both products. Availability of raw materials into one of the important factors in terms of production and business in general.

Further analysis can be done by looking in more detail in the production process technology, the amount of investment, ROI, environmental aspects, sustainability of core business (palm oil) and benefits of the products produced are a number of factors that will make it easier to eventually choose one. Further know more detail about the characteristics of each business such products will also further increase the stability of both products. In the end, the higher score determines the choice or priority of both, and if it turns out an analysis of both the same score then also no problem if both run concurrently if the resource is also capable.

Although the quality of pellets and paper products from palm oil waste raw material was also not the best grade when compared with paper products or pellet of woody raw material, but then when the business is profitable then it is nice to be produced as well. This dilemma is also experienced as agro-based plant (agro-industry), such as sugar cane factories, where baggase can be processed into paper or pellets.

EFB Pellets Great Potential in Indonesia and Malaysia Has Not Been Taken

Wood pellets are still occupying the highest grade biomass fuel than biomass pellets fuel from other than wood. This is because its combustion properties are better than others. But as the magnitude of the biomass energy needs,  it is necessary to look for some other alternatives. Palm oil empty fruit bunch (EFB) is a potential raw material for pellets. Currently, Indonesia is the biggest palm oil producing country, especially crude palm oil (CPO) in the world with an area of palm oil plantations of more than 7 million hectares and hundreds of palm oil milss to process the palm oil fruits. Palm trees require warm temperatures, sunshine and high rainfall, so that only some parts of the world can do that, those are Asia, Africa and South America. Palm oil production is dominated by Indonesia and Malaysia with an amount between 85-90% of world palm oil production. Empty fruit bunches itself is a waste of CPO production which are numerous and today generally untapped.

Another factor driving this is when the supply of raw materials by planting some sort of energy plantation perceived longer and require more capital, or when the availability of raw materials such as woody biomass derived from wastes of the wood processing industries has been limited, the empty fruit bunches of palm oil can be a strong candidate. While the other factor come from the palm oil mill itself that many industries were overwhelmed to handle empty fruit bunch waste itself. Those things are more encouraging empty fruit bunch (EFB) processing into EFB pellets.

In terms of combustion properties as EFB pellet is lower quality from wood pellets, so it should also be used technologies that are more appropriate (suitable) in accordance with the character of the EFB pellets product. Type of fluidized bed combustion technology is the best choice because it is able to optimally handle EFB pellets at once able to reduce the content of a number of negative traits. Chlorine is the most avoidable component of mainly pellets made from agricultural wastes such as EFB. The fluidized bed combustion technology has also been developed from along ago so that is supposed to achieve optimum combustion conditions of EFB pellets become easy thing to do.

EFB Briquetting For Bioenergy And Other Purposes

Solid waste such as Empty Fruit Bunch-EFB numbers are very abundant in palm oil mills and to this day are generally not processed moreover utilized optimally.  EFB waste is generally just dumped somewhere and left to decompose naturally through biological processes. Some places have used it as mulch or as an organic fertilizer. But compared to the amount produced, processed EFB are few in number and little added value. The biological processes are also running slow so it takes a big investment to process all EFB waste every day when will use the process. Eco-friendly palm oil mills and "zero waste" certainly impossible achieved.

As energy needs continue to increase every time the diversification of energy becomes important and should be done. These shorter process and results can be used immediately would be an option for the EFB waste processing. Desification technology of biomass into briquette is an attractive option to implement. Briquetting is the shortest route to process the EFB commercially. Process variables such as the size of the briquettes, moisture content, particle size, ash content and plant investment looser than pelleting make it the quickest route of the EFB waste processing. While the briquettes usage  is not a massive pellets but also very large needs. A number of companies producing briquettes, and briquettes are used itself to produce electricity by gasification, pyrolysis and direct combustion technology. Gasification, pyrolysis and direct combustion technology also requires the size and shape of certain raw materials to get optimal performance.

Make the sustainable palm oil business from upstream to downstream is the desire of almost all palm oil businessman. When the palm oil plantation land in need of nutrients that can be supplied from the palm plant itself (EFB for example) but when taken out without anything coming into the soil will also interfere with the palm oil plantation soil fertility in the long term. So it need a good strategy to achieve a sustainable palm oil business. Briquetting is basically the biomass densification that will save transport to its user so that when the briquettes EFB if you want to use as compost can also be parsed again with biological processes to put into the ground so that the balance of soil fertility can be maintained.