Surplus Conditions, Why Import? Does Not Make Sense!!!

It is common practice that a country always protects its domestic products. Developing and increasing the quality and quantity of domestic products is one of the country's responsibilities in the economic field. It is strange and implausible when a country has a surplus of certain products, but on the other hand it imports similar products. This, of course, besides damaging the economy also directly affects the producers. The easiest example is in food or agricultural products. As an agricultural country producing rice when the surplus is clear, there is no need to import. Rice produced by farmers is not bought as well as sugar cane and so on, if at the same time a surplus such as a harvest is imported similar products. This is an economic murder for these farmers.

When the market goes increasingly liberal, the chances of cheating are also getting bigger. It could be that a country makes a hoax that discredits certain state products to protect the country's products. Especially if this is done by a large influential country. Of course this has a negative impact on the target country products so that the product does not sell well in the market or at a minimum the price falls. The evil trade politics are mostly done to bring down business opponents. Such efforts should not be carried out, but can use other better methods such as providing incentives for producers or users of domestic products. This further encourages the use of domestic products and revives the country's economy without harming other countries.

Recently Korea made a slight revision of the use of wood pellet fuels. Wood pellets produced from within the country are prioritized over imported products. This has encouraged the growth of the wood pellet industry in the country. With the large amount of wood pellet needs, it is very likely that the country will still not be able to meet its needs due to the lack of raw materials related to its natural factors. This is how it keeps them imported. But with this policy, Korea has taken sides with its domestic industry. As more and more countries in the world use wood pellets, wood pellet producers can also choose buyers at the best prices.

Korea's Choice Gricidae Energy Plantation?

There are many similarities between calliandra and gliricidae namely, the leguminoceae group, the wood has a high calorific value, easy to grow, suitable for cultivated energy plantation with fast growing capability after harvesting the wood, and can be integrated with the livestock business by utilizing the green leaves. But gliricidae sepium is easier and more common in many places. This is because gamal has several advantages over calliandra ie as shade trees, fences plants and simple building poles. Gliricidae can also grow in various places and types of soil, evident from the sea to the high mountains. As for the energy sector, calliandra wood has an advantage with faster dry so it can be exploited or easier to process further.

As a group of leguminoceae both gliricidae and calliandra are able to fertilize the soil because its roots are able to bind nitrogen from the atmosphere, increase soil organic matter, improve physical characteristics of soil, aeration and drainage, reduce soil erosion, lower soil temperature and reduce ground water evaporation. Critical land, marginal and unused land will be repaired with the leguminoceae. Human essential matter issues such as water, energy and food can also be fulfilled by the plantation. As with calliandra, for optimization of gliricidae can also be integrated in 5F projects for the world!.

Since implementing the RPS (Renewable Portfolio Standard) in 2012 Korea committed to increase the use of renewable energy, especially biomass and more specifically wood pellets in its energy sector. Based on the RPS, Korea requires a coal-fired power plant to use a minimum 2% of renewable energy by 2012, with  0.5% per year increase until 2020. By 2020 they will need a minimum of 10% renewable energy with 60% renewable energy composition coming from wood biomass , while the remaining 40% from other sources. Palm kernel shells also become short and medium term solutions, and wood pellets for the long term. Since a few years ago some gliricidae energy plantations have been created by cooperating with Korea. Although until now the commercial production of gliricidae wood pellets not yet realized, but it seems in the near future will be realized. Some of the driving forces include the limited availability of palm kernel shells, wood pellets from raw materials of wood wastes are also limited, and biomass pellets from various agricultural wastes are of low quality and often require various treatments before they are pelleted. It seems that gliricidae will soon be massively cultivated to meet renewable energy in Korea. 

Looking Wood Pellet Market In Asia

Wood pellet market growth projections indicate Europe as the main market with a consumption of 25-30 million tons in 2020, about 2.5 times more than the consumption in 2010 of 12 million tonnes. The  countries main producing wood pellet currently are Canada, USA, Sweden and Germany. The United States is the largest producer of wood pellets, but the majority of its production for domestic consumption for space heating (home heating), while Canada as the largest manufacturer of wood pellets after the United States, approximately 80% of production is for export. The big market changes that occurred in the Asian markets of less than 1 million tons in 2010 to about 15 million tonnes in 2020. Global wood pellet production also increased which grow up to 300% from 2012 to 2020, from 16 million tons to 40-50 million tons.

Global Energy Production by Source
Source: EIA 2008

Areas that are able to produce wood pellets with low prices would be a major exporter of wood pellets. Two components that are very influential in the production of wood pellets is the price of raw materials to factories and transportation costs to market. The position of Indonesia is located in the Asian region with a tropical climate so the potential to becomethe largest producer of biomass has a strategic role of being a manufacturer of wood pellets for the Asian market. Below are three major countries in Asia as market for wood pellets:

South Korea’s energy consumption by type. Source: Economic Intelligence Unit 2009

South Korea Market Development

Although South Korea is a small country, but a country 10th in the world with the energy user fifth oil importer and second importer of coal. Currently produces about 65% of the electrical of fossil fuels. South Korea seriously to reduce greenhouse gas emissions to 30% reduction in CO2 emissions from 2010 levels by 2020. South Korea has also issued a RenewablePortfolio Standard (RPS) which requires a minimum power plant to use the 2% renewable energy by 2012, with an increase of 0.5% / year until 2020. In 2020 they will need a minimum of 10% renewable energy with the expected composition of 60% of renewable energy derived from wood biomass, while the remaining 40% from other sources.

Japan’s energy portfolio. Source: U.S. Energy Information Administration 2010

Japanese Market Development

Japan has almost no natural resources, so that imports nearly all of almost all the coal, oil and gas. Japan is the largest importer of natural gas and petroleum ranked second in the world. Since the accident or the explosion of Fukushima nuclear power plant in 2011, the Japanese government review of national energy policy and resource development. The policy indicates that for the next 10 to 20 years for renewable energy, the increased use of non-fossil energy to 50% and greenhouse gas reductions in electricity generation from 34% to 70% in 2030.

China’s energy consumption by type. Source: Economic Intelligence Unit 2009

China Market Development

China is currently the second largest energy user after the United States. Energy is the foundation of economic growth in China. Coal is the main energy in China that make this country the largest user of coal in the world. Although very little renewable energy policy announced by the Chinese government, China in its five-year plan to allocate $ 750 million in direct subsidies, incentives and tax exemptions for building 200 green energy demonstration project in 2015 or at least 15% of its energy needs from renewable energy. China has also set up a biomass energy production with a target of 50 million tonnes of coal equivalent by 2012. Although the 5-year plan does not indicate specific green energy projects to be addressed, a number of assumptions stated China will produce wood pellets to replace coal. The majority of the production of wood pellets also comes from domestic production so that its import was minimal.

Racing for Lowering The Temperature Of The Earth

Although the carbon neutral scenario does not reduce greenhouse gas concentrations in the atmosphere, but with this scenario does not add more greenhouse gases in the atmosphere. The use of carbon neutral fuel from biomass is the concrete step. Gradually the role of the biomass fuel usage is improved and strengthened with the support by the state regulations. A number of countries have dared to take an ambitious policy for the utilization of biomass in the massive scale. Confidence factor such as the solution to the environmental problems of climate change and global warming, depletion of fossil fuel reserves, the image of an environment friendly country that will be known the world , and the economy are driving some of those countries to implement the policy.

For Asia, South Korea has started using biomass massively with the officially issued the Renewable Portofolio Standard (RPS) in Korea in 2012. The regulation state that 2% of the electricity shall come from renewable energy. Percentage of renewable energy needs will increase in incremental reach 10% in 2022. Another driving force is the emissions trading scheme which will be issued in January 2015. Whereas in Japan the energy strategy to be the hit of nuclear reactors has since abandoned some time ago. The actual strategy including the manufacture of power plants with the composition of nuclear and renewable energy from 30% to 70% until 2030. Japan with a population about half the residents of Indonesia but its energy consumption 5 times in Indonesia. Japan is also targeting production of energy from biomass power plants with a capacity of 1100 MW until 2020. As for the use of renewable energy have a target to reduce Japan's emissions of CO2 by 1990 levels by 2030. While China has a goal to use the 11.4% from non-fossil fuels from primary energy consumption in 2015. Its CO2 emissions will be reduced by as much as 17%. The Target reduction of CO2 emissions by as much as 40-45% by 2020 to reach such a level in 2005. In Europe, with a target of 20-20-20 has prompted demand especially for biomass pellets fuel. Target 20-20-20 is a greenhouse gas reduction of 20%, 20% renewable energy use and energy efficiency at 20%. Effective tool in Europe to achieve the targets is the emissions trading scheme (emission trading scheme EU ETS/).

  

Indonesia has also announced to reduce fossil energy by 2025, with the share of fossil fuels 83% and renewable energy around 17% in particular biomass gets a share of less than 5%. The energy potential of biomass in Indonesia is huge i.e. equivalent electric 49,810 MW but in utilized is still less than 4% or equivalent of 1,680.4 MW. Critical land and unused land that reach millions hectares, become an extraordinary potential to provide energy plantations to produce biomass as an energy source. Optimisation of the potency will support the target achievement the energy consumption of biomass as renewable energy in total energy mix. . Finally the creation of a low-carbon economy can be a solution for the welfare of society and improve the quality of the environment, with the most popular commodities i.e. wood pellets. The Global market for these pellets predicted to rise from 16 million tons (2010) becomes 47 million tons in 2020.