Maximizing Palm Oil Mill Profits with Cogeneration Utilization of EFB (Empty Fruit Bunch) and Export of PKS (Palm Kernel Shells)

As a profit-oriented company, maximizing profits is a natural and ongoing endeavor. Besides increasing efficiency, innovation can also be pursued, creating or developing new businesses. This is especially true if the innovations involved in creating new businesses also address environmental issues, such as utilizing palm oil mill biomass waste. In palm oil mills, empty fruit bunch (EFB) waste is generally underutilized, or if utilized, it is still suboptimal or inadequate, such as composting empty fruit bunches (EFB).

Empty fruit bunches (EFB) are a significant biomass waste product from palm oil mills, accounting for approximately 22% of the total production, but are generally underutilized and pollute the environment. Utilizing EFB through cogeneration will not only address the problem of EFB, but also generate heat or energy to replace the use of palm kernel shells (PKS) as boiler fuel, and also produce high-quality organic potassium ash fertilizer.

If the PKS used for boiler fuel reaches 50%, then using this technology means that 50% of the PKS can be recovered, or 100% of the PKS can be sold or exported. For example, a palm oil mill normally sells 3,000 tons of PKS per month. With this technology, the mill can sell 6,000 tons of PKS per month. This would certainly increase the supply of PKS significantly.

Even if applied on a larger/macro scale, namely in Indonesia with CPO production of around 50 million tons/year, the actual production of PKS is around 12.5 million tons/year. However, with the current practice of utilizing PKS as boiler fuel, say reaching 50% of PKS production, the actual amount of PKS that can be sold/exported by palm oil mills is 6.25 million tons/year. Now, with the use of this technology or the installation of equipment (EFB furnace cogeneration), the amount of PKS that can be sold/exported will be close to or equal to the PKS production in the mass balance or diagram above (not subtracting the amount burned in the palm oil mill boiler).

The demand for palm kernel shells (PKS) is increasing in line with the global decarbonization trend. In fact, PKS is a major competitor for wood pellets in the global biomass fuel market. Large PKS users come from Japan and Europe. PKS exports to Japan typically reach around 10,000 tons per shipment, while those to Europe typically reach a minimum of 30,000 tons per shipment due to the longer distances and the use of handymax or even panamax vessels. Cogeneration of empty fruit bunch (EFB) furnaces with palm oil mill boilers will increase the volume of PKS that can be sold or exported. Implementing this technological innovation, besides being the fastest and most practical, also offers multiple benefits, making it worthy of consideration. It could even become a trend and even a standard operating procedure in Indonesia's approximately 1,000 palm oil mills.

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.

Optimization of Palm Oil Mill Operations to Maximize Profits by Utilizing EFB Waste

As a profit-oriented company, palm oil companies will also do various things necessary to maximize their profits, both in the operations of their palm oil mills and on their plantations. The more efficient the operations of the palm oil mill, as well as on its plantations, the higher the profits obtained. Minimizing the environmental impact of waste produced, even zero waste, and becoming part of responsible and sustainable environmental management practices, including part of climate solutions, are important parts of this industry that cannot be abandoned. That is why palm oil mills must innovate to achieve optimal conditions. To achieve these conditions, it can be done by evaluating current practices and finding better solutions.

CPO (crude palm oil production) requires steam for the sterilization process. This is why palm oil mills definitely need boilers for their production process, for more details read here. Steam from the boiler is also used for power generation with steam turbines to drive generators. The operation of the boiler is generally carried out by burning fiber (mesocarp fiber) and some palm kernel shells / PKS, so that some palm kernel shells /PKS can still be sold or even exported. This common practice in palm oil mills has also been running for decades, but it turns out that there is still a lot of biomass waste from palm oil mills that has not been utilized, especially empty fruit bunches or EFB (empty fruit bunches) which account for around 23% of the fresh fruit bunches (FFB) processed. These EFBs are usually only piled up behind the palm oil mill and tend to pollute the environment.

The EFB can be processed into biochar. Biochar production with thermal processes, either pyrolysis or gasification, will produce energy as cogeneration in palm oil mills. Cogeneration is the right solution for biochar production while supplying energy needs for boiler operations. In this way, 100% of palm kernel shells / PKS can be sold or even exported, meaning that palm oil companies' profits are greater. But to maximize biochar production, pyrolysis is the right choice. This is because gasification technology is to maximize gas products while pyrolysis is to maximize solid products (biochar). By-products from pyrolysis are also beneficial for the palm oil industry.

Empty fruit bunches (EFB) are solid waste from palm oil or CPO production which is the largest in number. This is what makes many machine manufacturers make these EFB processing machines. Most of the machines made are equipments for cutting and pressing the EFB so that the water content decreases and the material size becomes smaller. However, both the water content and the size of the EFB as the output of the machine or equipment still do not meet the requirements to be further processed into biochar. The typical output is more than 4 inches and the water content is more than 45%. EFB must have a low water content of 10% and can be less than 1 inch for biochar production or as fuel in the boiler.

  

To obtain the EFB with a dryness level or water content of 10%, waste heat recovery from palm oil mills can be utilized for the drying process. Other biomass waste from the palm oil industry can be utilized as fuel or a source of heat energy for drying the EFB. By utilizing these biomass wastes, mill operations can be more efficient so that profits are maximized and environmentally friendly with zero waste. 

Tips for Choosing PKS

For the CPO producers, tenera is preferred because the thick coir (mesocarp fiber) will produce more CPO. Whereas for PKS (palm kernel shell) users such as power plants and a number of industries, the type of dura palm oil is preferred. PKS tenera has a thin shell (0.5-4 mm) so that the calorific value tends to be lower than the dura with a thicker shell (2-8 mm). Old palm oil plantations usually use tenera types to maximize CPO yield, while old palm oil plantations usually use a type of dura. PKS as a byproduct or one of the solid wastes in a CPO mill is actually not a major concern for palm oil mills, and CPO is clearly the main focus. PKS is primarily a concern of traders and users, so quality factors emerge as a consequence of buying and selling transactions.

Indonesia has around 12 million hectares of palm oil plantations at present, consisting of 4.8 million hectares of smallholder plantations, 6.2 million hectares of private plantations and 0.8 million hectares of state plantations. There are still many regions in Indonesia that use the type of dura on their palm oil plantations. Smallholder palm oil or community palm oil plantations are one of the many that produce this type of dura palm. When PKS demand increases sharply as it is today, especially for export markets to Japan and Korea (more information read here), then PKS dura types are the first choice. In practice it is difficult to find PKS that is 100% dura because the source of palm oil fruits used in CPO production also comes from various sources. The source of the nucleus (company plantation) can be the majority in the form of tenera, while palm oil from community plantations can be the majority of the dura. The composition of the dura and tenera also varies depending on composition the nucleus and plasma plantations. For example, a CPO mill with a nucleus plantation which is majority still new plants so that the palm oil fruit majority comes from the community plantation. Or it could be that the nucleus plantation has entered the replanting phase so that supply is limited and relies on community plantations and so on.

According to botany, dura-type plants have dominant alela homosigot (sh + sh +) so produce thick shells. Whereas hybrids from dura with pisifera, which are tenera-type plants that have alela heterosigot (sh + sh-) have thin shells and are surrounded by fiber rings in the mesocarp. Pisifera type plants themselves have recessive alela homosigot (sh-sh-) so they do not form shells. Generally this type of pisifera is not used as a commercial for palm oil plantations because it fails to form fruit. But indeed there are several types of pisifera that are still fertile and capable of reproducing. Dura type plants can also be said to be parent plants because the tenera type is a crossing of dura and pisifera.

PKS For CFB Powerplant

49 MW Japan Biomass Powerplant
Operates Since 2015 That Use PKS As Fuel

The fluidized bed combustion (FBC) technology is not new since it has been used since 1960 to burn city waste and industrial waste. After proven successful, then made more than 300 units worldwide. The advantages of this technology are higher fuel flexibility, high efficiency due to good mixing, relatively low combustion temperature so as to minimize the problem of ash deposits due to melt and the use of small excess air, also increasing the efficiency and reduce the resulting flue gas. FBC technology is suitable for large capacity that is above 20 MW. In the development of this technology is divided into 2, namely bubbling fluidized bed (BFB) and circulating fluidized bed (CFB). In general the difference is not much, such as fuel size, unit construction and air-fuel ratio. PKS (palm kernel shell) or palm shell is more suitable for CFB powerplant because its size is less than 4 cm. The power plants in Japan in particular, which use PKS or palm shells as fuel because they use this CFB technology.

With relatively low operating temperature ie 650-900 C then the ash problem can be minimized. Certain biomass fuels sometimes have high ash levels and ash chemicals that potentially damage these generating units. In addition, the fuel cleanliness factor is also very important, this is because technically certain impurities such as metal can close the air pores on the perforated plate of FBC unit, whereas air, especially oxygen is absolutely necessary in the combustion process and also the making the fuel bed in fluidized condition. The requirements for clean fuel must be met by the provider or seller of the biomass fuel, therefore the purchasers require an acceptable amount of impurities (contaminants), ranging from less than 1%. Cleaning of PKS is done by sifting (screening) either manual or mechanical machine, for more detail biomass fuel cleanliness problem can be read here.

In addition to PKS, pellet fuel from agricultural wastes or agro-waste pellets such as EFB pellets that have a high ash content and low melting point can also be used and not to worry for the fuel with this technology. Agro-waste production can be encouraged if there is a buyer, namely a biomass power plant with CFB technology. Although agricultural wastes are abundant in Indonesia but generally only burned or in pile only, because they are considered as a problem or pollutant. Why are these wastes not processed into pellets? One is because they have not found a market or buyers, although there is basically there's always a market for every type of pellet fuel. While the PKS that can be produced in Indonesia with the current palm oil plantations of 12 million hectares is estimated to reach 10 million tons / year, can be directly used for the power plant CFB. This is why the PKS is more sought after by current buyers.

The weakness of the CFB power plant is the high concentration of the flue gas so that the dust precipitator and the boiler cleaning system must be able to work efficiently. In addition the bed material is also lost with ash, so periodically need to be added again. Bed material commonly used is silica sand and dolomite. To reduce the cost of bed material usually reused after separated with ash. The technique is that the ash mixture is separated from a large size material with fine particles and silica sand in a water classifier. Next the fine material is returned to the bed. More specifically, CFBs are more efficient and less flue gas than BFBs so that boilers and flue gas cleaning systems can be designed to be smaller.

Biomass fuel gets a 4.3% share in Japan on their 2030 energy projections. This means that biomass accounted for 4.3% of 245 million MW per year with renewable energy or about 6,000 MW of biomass. To reduce CO2 emissions from coal Japan also make regulations on the efficiency of the coal power plants, to a minimum of 41% by 2030 while most of the current coal power plant efficiency is around 30-35%. Currently power plants that have an efficiency of more than 41% are only ultra supercritical pulverized coal. Modification of power plants can also be done to improve the efficiency, but certainly require more costs, so that the condition is increasingly becoming the driving force of biomass power generation especially CFB powerplant and the effect of increasing PKS demands.