OPT Pellets for Biomass Power Plants and BECCS in Japan and Europe (Presentation Version)

One way to maintain or even increase the productivity of palm oil plantations is through replanting , which is absolutely necessary. Old palm oil trees will decline in productivity, becoming uneconomical. Just as palm oil planting is carried out in stages, replanting oil palm plantations is also carried out in stages and periodically.

Most palm oil companies affiliated with GAPKI have been replanting regularly, or annually, on an area of ​​4-5%. GAPKI currently has 731 members, while according to Statistics Indonesia (BPS) in 2023, the number of palm oil companies in Indonesia reached 2,446, spread across 26 provinces.

Of Indonesia's approximately 16.8 million hectares of oil palm plantations, 9 million hectares are managed by private companies, 550,000 hectares are owned by state-owned companies (PTPN), 6.1 million hectares are owned by smallholders, and the remainder has not been verified. Specifically for replanting, the government is targeting 180,000 hectares per year for smallholders, but by 2024, only 38,244 hectares had been realized, far short of the target.

With an average hectare of palm oil plantation containing 125 trees, each tree having an average dry weight of 0.4 tons, per hectare yields 50 tons of dry biomass. For an area of ​​10,000 hectares, this translates to 0.5 million tons of dry biomass, and for an area of ​​100,000 hectares, this translates to 5 million tons of dry biomass. Optimistically, Indonesia could achieve 5% replanting, or 820,000 hectares, which would yield 41 million tons of dry biomass per year. Malaysia, with 5% replanting, or 285,000 hectares, would produce 14.25 million tons of dry biomass per year.

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OPT Pellets for Biomass Power Plants and BECCS in Japan and Europe

As a tropical region known for biomass heaven, there are numerous sources that can be utilized for biomass pellet production, particularly OPT pellets or oil palm trunk pellets. This potential is certainly in line with global decarbonization efforts to save the earth from climate change and global warming. Indonesia is currently the world's largest palm oil producer, with approximately 17 million hectares of palm oil plantations. Of this area, 9 million hectares are managed by private companies, 550,000 hectares are owned by state-owned companies (PTPN), 6.1 million hectares are owned by smallholders, and the remainder remains unverified. Crude palm oil or CPO productivity has stagnated over the past five years due to the slow pace of replanting, which is around 45 million tons per year. Therefore, replanting, especially for smallholders, must be encouraged.

Most palm oil companies affiliated with GAPKI have conducted replanting periodically or once a year with an area of ​​4-5%. The palm oil companies that are members of GAPKI are 731, while according to BPS 2023 the number of palm oil companies in Indonesia reached 2,446 companies, spread across 26 provinces. Meanwhile, in smallholder palm oil plantations, replanting is very small, namely in 2024 alone with a target of 180,000 hectares (around 3% of smallholder palm oil plantations) but the realization is less than 40,000 hectares (0.7% of smallholder palm oil plantations) and even because it is so far from the target set in 2025 the government's target for replanting smallholder palm oil plantations was reduced to only 120,000 hectares (around 2% of smallholder palm oil plantations).

With an average of 125 trees per hectare of palm oil plantation, each tree yielding an average dry weight of 0.4 tons, this yields 50 tons of dry biomass per hectare. For an area of ​​10,000 hectares, this translates to 0.5 million tons of dry biomass, and for an area of ​​100,000 hectares, this translates to 5 million tons of dry biomass. Optimistically, Indonesia could achieve 5% replanting, or 820,000 hectares, which would yield 41 million tons of dry biomass per year. Malaysia, with 5% replanting, or 285,000 hectares, would produce 14.25 million tons of dry biomass per year.

For a more practical calculation, let's consider the average palm oil company group in Indonesia with five palm oil mills and 50,000 hectares of palm oil plantations. With annual replanting of 5% of the total plantations, 2,500 hectares are replanted annually. This replanting will produce 125,000 tons of dried oil palm trunks. This volume will then be used to produce oil palm trunk pellets, or OPT pellets, assuming 3% loss during the production process. This yields 121,250 tons of OPT pellets per year.

Using a Handymax vessel with a capacity of 25,000 tons per shipment, five shipments are required, or using a Panamax vessel with a capacity of 50,000 tons per shipment requires two shipments plus one Handymax vessel. Alternatively, using a vessel with a capacity of 10,000 tons per shipment requires approximately 12 shipments per year. Shipments with large capacity handymax and panamax vessels are suitable for the European market, while smaller vessels, namely 10,000 tons/shipment, are suitable for the Japanese market.

Japan, with around 290 biomass power plants, should technically be able to move towards BECCS more quickly, but it's just a matter of policy and regulation. Installing CCS (Carbon Capture and Storage) units in biomass power plants makes the plant's operation carbon negative, or carbon (dioxide) removal (CDR) or Greenhouse Gas Removals (GGR). Furthermore, Europe has a successful example of BECCS implementation, namely the Stockholm Exergi BECCS project. This Stockholm project, based on sustainable biomass fuel, has secured one of the world's largest carbon sequestration agreements with Microsoft.

Furthermore, policy support for biomass power plants with CCS/BECCS or those capable of CDR/GGR is also increasing, as in the UK. This includes the indefinite extension of support for biomass power plants to allow time for plants to transition to BECCS. Modifications and retrofitting of existing power plants will eliminate millions of tons of CO2 annually while still generating electricity from renewable sources. This potential can only be maximized with government support for the transition to BECCS.

Opportunities to Supply Biomass Fuels to Japan

Loading palm kernel shells / PKS for export

Japan currently operates approximately 290 biomass power plants. Its installed capacity is 7.3 GW, but only 4.96 GW (~68% of installed capacity) are actively operating, with peak electricity output reaching 2024. A projected 6 GW of additional power plants are expected by 2030, but several slowdowns have occurred due to power reductions and even closures. This has occurred at the Taketoyo JERA plant, which reduced its operating level or power output, and the Suzukawa plant, which was closed due to economic pressures. Despite this, plans for new biomass power plants remain strong, with 11 new plants scheduled to be operational by 2025, which could increase annual biomass fuel demand by approximately 1.1 million tons. The need for biomass fuel is a business opportunity that must be exploited, especially since biomass fuel for biomass power plants in Japan is largely imported. Here are two examples of brief profiles of biomass power plants in Japan :

1. Renova

Renova is a 75 MW biomass power plant located at Omaezaki Port in the southernmost part of Shizuoka Prefecture. The biomass fuel used in the Renova plant is wood pellets and palm kernel shells (PKS).

Fuel quality and sustainability are key concerns for Renova, for example, in palm kernel shells (PKS), where the presence of foreign impurities and moisture content must be within acceptable limits or as low as possible. Meanwhile, for wood pellets, technical aspects such as density and the percentage of fine particles are of concern. This is why Renova feels the need to encourage investment in fuel testing and analysis.

The renewable energy facility had previously delayed its commercial operation twice due to the need for additional time for final adjustments to the boiler and turbine to ensure stable operation. Initially scheduled for December 2023, Renova stated that the launch was also delayed in December 2024, and finally began operations in early 2025. These modifications were necessary to ensure long-term stable operation.

Renova is the largest shareholder in Omaezakikou with a 38% stake. Chubu Electric Power Co. Inc. is second with 34%, while Mitsubishi Electric Financial Solutions Corp. and Suzuyo Shoji Co. Ltd. hold 18% and 10%, respectively. The company is also exploring alternative biomass fuels, such as empty fruit bunches (EFB), to diversify its biomass fuel supply and control costs with lower purchase prices.

2. Kanda

Biomass Energy in Kanda City, northeast of Chiyoda, Tokyo. Inaugurated in June 2021, this 75 MW facility operates exclusively on biomass. With an annual capacity of approximately 500 million kWh, the plant generates enough renewable electricity to meet the electricity needs of 170,000 households.

Kanda Biomass Energy utilizes three types of biomass: wood pellets (60 percent), palm kernel shells (PKS) (30 percent), and wood chips (10 percent). This fuel mix reduces greenhouse gas emissions into the atmosphere by 670,000 tons per year compared to a coal-fired power plant with the same capacity. Wood pellets are imported from British Columbia, Canada, and Vietnam, palm kernel shells (PKS) from Indonesia, and wood chips are sourced locally from northern Kyushu.

The plant has three dedicated fuel tanks for storing wood pellets. Biomass is fed into a circulated fluidized bed (CFB) boiler, which converts it into superheated steam to drive a power-generating turbine. The steam is then cooled, condensed, and recycled back into the system, ensuring efficient and sustainable electricity generation for residential and industrial users in the region.

The Kanda Biomass power plant is owned by Renova (43.07%), Sumitomo Forestry (41.5%), Veolia Japan (10%), Kyuden Mirai Energy (5%), and Mihara Group (0.43%). The biomass power plant was originally developed by Nippon Steel Engineering, Renova, and Sumitomo Heavy Industries.

Production of LOF and EFB Pellets at The Same Time

The leaching process for palm oil empty fruit bunches (EFB) so that it has potassium and chlorine content suitable for EFB pelletproduction on a commercial scale that can be used maximally on a pulverized combustion (PC) boiler at a power plant is not easy and inexpensive. That is because the leaching process requires a solvent to extract the potassium and chlorine content from the EFB material. Ideally the leaching process is carried out with acid solvents, agitation and heat and a long time so the extraction process can run optimally. In fact this is the bottle neck to carry out the leaching process, so that almost no one has done this process commercially today. It is different if the leaching process also has other objectives that also have commercial value, for example for the production of liquid organic fertilizer (LOF).

By simultaneously producing LOF, the costs for leaching can be compensated with the benefits of the LOF. In CPO business operations, especially in palm oil plantations the cost of fertilizer is one of the highest cost components, estimated at 35.75 billion rupiahs (around 2.5 million USD) per year for every 10,000 hectares. If the cost of the fertilizer can be saved from the use of self-produced LOF as well as pellet EFB production, then this is one of the optimization of biomass utilization in the palm oil industry. LOF will have the main content in the form of potassium because the potassium content is quite high at EFB about 30% of the ash produced is potassium. Potassium fertilizer is very beneficial for plants because it is an essential nutrient with benefits including transporting sugar, controlling stomata in leaves by maintaining electro-neutrality in plant cells, co-factor of more than 40 enzymes and reducing the occurrence of various diseases. Some plantations also need large amounts of potassium fertilizer, for example banana plantations. The process of making LOF by soaking EFB for several days is expected to significantly reduce the potassium and chlorine content in EFB and make it a material for pellets that are friendly to the PC boiler power plant.

The EFB pellets produced can then be sold for export as well as meeting domestic needs. With EFB pellet production as well as LOF, it is hoped that export bioenergy will not damage or reduce the fertility of the existing soil, something that is sometimes indeed dilemmatic. In addition, other materials in the plantation such as leaves and frond can still be composted if they are also intended as fertilizer. EFB pellet production also always requires energy in the form of electricity for its plant operations. And for that electricity can be produced from biogas by treating the palm oil mill effluent (POME), for more details, read here. The location of palm oil mills which are generally remote are required to be able to produce their own electricity, including if they are going to process EFB into LOF and EFB pellets, the electricity needs should also be fulfilled by themselves.

EFB pellets without leaching process actually can also be used for FBC (fluidized bed combustion) boiler technology and for a limited number percentage of PC boilers. With this leaching process EFB pellets can be used optimally on the PC boiler. Majority of power plants or coal power plants currently use PC boiler technology. So that if the EFB pellet produced can be friendly with a PC boiler the market is more open automatically. Production of EFB pellets which are agricultural waste pellets will usually be the second priority after the production of wood pellets is constrained mainly in terms of the availability and supply of raw materials.