The demand for biomass fuels as renewable energy, including PKS (palm kernel shells), is growing in line with the global decarbonization trend. Likewise, the use of biofuels such as biodiesel is also increasing. Biomass fuels like PKS and biofuels like biodiesel are both carbon-neutral bioenergy products. Both can be produced from palm oil trees. Biofuels like biodiesel are primarily used in the transportation sector, while biomass fuels like PKS are used for power generation or industrial boiler fuel. Palm oil produces its primary product namely crude palm oil and crude palm kernel oil (CPO and CPKO), while the PKS are byproducts or waste, such as EFB (empty fruit bunches) and mesocarp fiber.
Over time, the demand for palm oil has also increased, commensurate with population growth, and its use in the energy sector (biofuel) is even greater than in the food sector. To stabilize prices and avoid sharp fluctuations in palm oil prices, the Indonesian government launched the B-50 program, which uses 50% biodiesel from palm oil and 50% diesel from petroleum. With the B-50 program, palm oil demand has increased by approximately 20% over current average production.
This necessitates increasing palm oil productivity. One such effort is the use of superior seeds. By maximizing CPO production from mesocarp fiber, these superior seeds have thick fiber, thin shells (even shellless), and small kernels. The Psifera variety, with its various unique names by seed producers, is an option for this purpose. These superior seeds are even certified to assure consumers of their quality.
The initially thick PKS of the dura variety, which are favored and most sought after by PKS exporters for use in power plants, will gradually decline. However, considering the slow pace of replanting programs and minimal extensification efforts, the transition from dura to psifera PKS will be lengthy. PKS exporters can still safely export thick dura PKS. The less thin tenera PKS, as a transition to psifera, will likely become more common.
If very thin psifera PKS become commonplace, their calorific value will be low and they will be less desirable for energy applications. If this occurs, special treatment is required to make the psifera PKS more technically and economically viable for energy use. This can be achieved through compaction/densification or processing through torrefaction or pyrolysis to produce higher fixed carbon and calorific value. Furthermore, they can be compacted/densified into pellets or briquettes.
Palm oil mills produce a large amount of biomass waste, and one of the largest in their daily operations is empty fruit bunches (EFB). Comprising approximately 22% of the fresh fruit bunches (FFB) processed by the mill, the volume becomes enormous and piles up daily if not managed properly. For example, a palm oil mill with a capacity of processing 60 tons of FFB per hour for 20 hours per day produces 264 tons of empty fruit bunch waste per day (approximately 6,600 tons per month and 79,200 tons per year). This enormous amount would resemble a hill if piled up in one place.
Incinerators have recently become popular, particularly in Indonesia, for processing empty fruit bunches due to their speed and practicality. Furthermore, the ash produced by burning them can be used as fertilizer due to their high potassium content. However, these incinerators produce exhaust emissions that pollute the environment, including black smoke and particulate matter. These emissions, which pollute the environment and exceed the threshold permitted by the Ministry of Environment (KLH), have led to the prohibition of incinerators. This ban has led to an increasing number of unmanaged empty fruit bunches. Using empty fruit bunches for mulch is also less effective, and composting, a biological process, takes a long time.
This problem demands an immediate and effective solution. The quickest practical solution is to upgrade the incinerator to make it environmentally friendly or to reduce emissions below the required threshold. This can be achieved by using adequate emission control devices to meet these environmental requirements. While many emission control devices are available, cost and target output are crucial considerations when selecting them. This approach not only addresses the problem of empty fruit bunches, but the resulting ash can also be used as a potassium fertilizer.
Furthermore, by upgrading the incinerator with emission controls (basic type), the equipment can be developed into several types, as follows: the second type is a cogeneration boiler for palm oil mills, allowing 100% palm kernel shell (PKS) to be sold, even for export. The third type is by adding a new boiler and steam turbine for electricity production, which is then sold to PLN (Indonesia State Owned Electricity Company) under a power purchase agreement (PPA). The fourth type is equipped with waste heat recovery equipment, allowing for more general use. This also means the combustion process in the upgraded incinerator can also be upgraded so that the combustion process can run optimally. Several combustion technologies, such as chain grates, step grates, or reciprocating grates, can be considered to achieve maximum performance, including the removal and handling of ash product.
Empty fruit bunches (EFB) processing can vary, although the primary focus is addressing environmental pollution caused by them. However, their large volumes certainly represent a potential raw material for processing units. Therefore, in addition to addressing this waste, the technology used must also provide financial benefits. Of the numerous EFB processing technology options, the cost-to-benefit ratio of a technology application will be a crucial consideration for EFB processing.
In addition to combustion using conventional or this upgraded incinerator, thermal processing routes also include pyrolysis, with slow pyrolysis specifically for biochar production and fast pyrolysis for bio-oil production. Another pyrolysis variant is mild pyrolysis or torrefaction for the production of torrified biomass. Then there's gasification to maximize gas (syngas) production from biomass. Furthermore, empty fruit bunches of palm oil can be used as fuel or an energy source. To facilitate handling, storage, and reduce transportation costs, empty fruit bunches need to undergo biomass densification technology, with the final product being pellets or briquettes.
In Japan, with approximately 290 biomass power plants, the transition to BECCS should be faster, but it's just a matter of policy and regulation. Installing CCS (Carbon Capture and Storage) units at biomass power plants makes the plant's operation carbon-negative, or carbon dioxide removal (CDR) mode. The amount of carbon captured and stored, separating it from the atmosphere, can earn carbon credits that can be used for CCS operations at biomass power plants. Decarbonization to achieve the 2050 Net Zero Emissions (NZE) climate targets and the Paris Agreement are the driving force.
And because biomass power plants always require biomass fuel for their operations, this presents an opportunity for Indonesia to supply wood pellets and palm kernel shells (PKS). Power plants in Japan, most or the majority of biomass fuel comes from imports, such as the Kanda Biomass Power Plant (Kanda Biomass Energy) in Kanda City, northeast of Chiyoda, Tokyo. Kanda Biomass Energy uses three types of biomass: wood pellets (60 percent), palm kernel shells (PKS) (30 percent), and wood chips (10 percent). Wood pellets are imported from British Columbia, Canada and Vietnam, palm kernel shells (PKS) from Indonesia, and wood chips are imported locally from northern Kyushu. This facility consumes approximately 170,000 tons of wood pellets, then 120,000 tons of palm kernel shells (PKS), and 60,000 tons of wood chips per year.
Biomass power plants in Japan generally use fluidized bed combustion (FBC) technology in their boilers. The reasons for using this technology are higher fuel flexibility, high efficiency due to good mixing, relatively low combustion temperatures, which minimize the problem of ash deposits due to melting and the use of excess air. It also further increases efficiency and reduces flue gas production. FBC technology is suitable for large capacities above 20 MW. Over time, this technology has been divided into two types: bubbling fluidized bed (BFB) and circulating fluidized bed (CFB). Generally, the differences between the two are not significant, such as fuel size, unit construction, and air-fuel ratio. Palm kernel shells (PKS) are more suitable for CFB power plants because they are less than 4 cm in size. Power plants in Japan, in particular, that use PKS or palm kernel shells as fuel because they use CFB technology.
With relatively low operating temperatures of 650-900°C, ash problems can be minimized. Certain biomass fuels sometimes have high ash content and ash chemistry that can potentially damage the generating unit. Furthermore, fuel cleanliness is also very important, this is because technically certain impurities such as metals can block the air pores in the perforated plate of the FBC unit, even though air, especially oxygen, is absolutely necessary for the combustion process and also maintains the fluidized fuel bed condition. These fuel cleanliness requirements must be met by the supplier or seller of the biomass fuel. Therefore, the buyer requires the amount of impurities (impurities/contaminants) that can be accepted is very small, namely around less than 1%. PKS cleaning is done by sieving either manually or mechanically. For more details on biomass fuel cleanliness issues can be read here.
The demand for biomass fuel is predicted to continue to increase. And biomass power plants continue to expand, with an estimated 6 GW of additional power plants projected to be installed in Japan by 2030, with an installed capacity of 7.3 GW by 2024. In fact, 11 new power plants are scheduled to come online by 2025, increasing annual biomass fuel demand by approximately 1.1 million tons. If Indonesia could also supply wood pellets to Japan by maximizing forest residue, sawmill waste, or other wood processing industry waste, that would be extraordinary.
As an estimate of forest waste utilization, for example, a production forest with an area of 200,000 hectares (approximately 2,000 km2) and because it is located in a tropical area with an average woody biomass growth rate of 20 tons/hectare/year, then the forest will produce 4,000,000 tons/year of wood every year from new growth. An area of 200,000 hectares may seem very large, but with Indonesia having almost 70 million hectares of production forest, an area of 200,000 hectares is only 0.29%.
For example, we set the default setting for wood utilization from production forests: 35% for building materials, furniture, flooring, etc., 30% for paper, tissue, and packaging, with 5% of the harvested wood remaining in the forest. Furthermore, 15% of sawmill waste (sawdust, chips, etc.) is used for wood pellet production, and the remaining sawmill waste is sent to pulp and paper mills and engineered wood industries.
And it is estimated that 35.3% of the 3.8 million tons/year of wood waste annually goes to wood pellet factories (approximately 1.34 million tons annually). In some locations the actual percentage is much lower because paper mills and engineered wood industries use more raw materials with the same raw materials as wood pellet factories. Therefore, in general, wood pellet factories are not located in locations that already have demand or existing use for pulp and paper and engineered wood industries. With the high water content, drying is necessary for wood pellet production, so the estimated wood pellet production is 650,000 tons/year. With the size of a handymax vessel that can carry 25,000 tons/shipment, this means 26 shipments are needed to Japan each year, or with a panamax vessel that can carry 50,000 tons/shipment, this means 13 shipments to Japan each year.
The need for biomass fuel as a decarbonization effort because it is a renewable fuel that is carbon neutral is increasing. Two biomass fuels that are popular in the world and compete fiercely are wood pellets and palm kernel shell (PKS). Under normal conditions or without a spike in demand, the price of wood pellets is usually more expensive than PKS. This is understandable because wood pellet production requires more effort than PKS. Wood pellet production requires a number of equipment with an expensive investment, while PKS only requires minimal equipment, namely just a screening/sieving machine.
But what if the prices of wood pellets and PKS are almost the same or even PKS is even more expensive? This can happen due to several factors, namely first, the influence of market demand. High market demand, especially PKS from Indonesia and Malaysia, means supply is reduced or inadequate. PKS production in Indonesia and Malaysia is indeed much greater than wood pellet production from these two countries. Apart from the larger production volume, factors such as availability and continuity (long-term security of supply) can be guaranteed more than wood pellets. This is because it is estimated that there are 1500 palm oil mills in Indonesia and Malaysia that produce PKS which is a by-product or waste of palm oil mills. This allows for long contracts between sellers or suppliers (exporters) and buyers who are usually not end users but trading companies in Japan and Korea.
Loading PKS for export with transhipment (ship to ship)
The second factor is levy and tax. PKS exports in Indonesia are subject to levy and tax whose value is correlated with the price of crude palm oil (CPO). This is because PKS in Indonesia is included in the palm oil derivative product category, whereas in Malaysia it is not subject to these levy and tax, because PKS in Malaysia is included in the palm oil waste category. When levy and tax are high, the price of PKS will automatically become expensive. This levy and tax factor is something that PKS exporters cannot control. Through the APCASI organization (Indonesian Palm Kernel Shell Entrepreneurs Association) they are fighting for levy and tax to be more measurable or cheaper, even if they can be eliminated like in Malaysia.
Basically buyers will buy the best possible goods at the cheapest possible prices, or better quality goods but cheaper prices. The quality of wood pellets is better than PKS, namely in terms of calorific value, ash content, shape uniformity and moisture content. However, due to volume factor and continuity (long-term security of supply) which are often or still widely in doubt, the choice to go to PKS is still being made. To overcome this, wood pellets production must meet production capacity with a reliable source of raw material supply. Production of wood pellets from energy plantations is the solution.
With wood raw materials from energy plantations, the supply of raw materials will be more stable, unlike those that rely on collecting wood waste from sawmills or wood processing industries. With Indonesia's production forest area reaching tens of millions of hectares, of course land is not a problem in wood pellet production. Wood pellet production centers can be created on these production forest lands, for more details, you can read here.
With Indonesia's palm oil plantation area reaching around 15 million hectares and palm oil mills reaching 1000 units, efforts to upgrade the palm oil industry are important and strategic. Indonesia's palm oil or CPO production per year is around 46 million tons (while Malaysia is in second place at around 19 million tons/year). Efforts to upgrade the palm oil industry will increase productivity/efficiency, sustainability and encourage the creation of new products/markets as well as added value for palm oil. Things that can be upgraded include a number of key areas including bioenergy, biomaterials and oleochemicals, food and feed, soil fertility (land, soil and cultivation), post-harvest and processing, waste processing and the environment as well as socio-economics, management and business.
One concrete thing that can be done is the production of biochar from palm oil mill waste, especially empty fruit bunches (EFB) and palm fiber (mesocarp fiber). Biochar production by pyrolysis will produce excess energy (syngas & biooil) which can be used as boiler fuel in palm oil mills. Furthermore, the application of biochar with fertilizer on palm oil plantations will become slow release fertilizer (SRF), thereby increasing nutrient use efficiency (NUE). The condition of many oil palm plantations on acidic soil will also increase in pH when biochar is applied.
In palm oil plantation operations, fertilizer is the highest cost component so that if you can increase fertilizer efficiency it will provide significant benefits. The use of biochar is the solution, namely SRF. SRF also minimizes environmental pollution due to the use of fertilizer. Meanwhile, in palm oil mill operations, energy is a vital component, and if this can maximize the use of waste that has no economic value, it will certainly be very economical apart from of course overcoming environmental problems caused by this waste. Currently, palm oil mills use palm fiber (mesocarp fiber) and some palm kernel shells (PKS/palm kernel shell) for boiler materials, while generally the empty fruit bunches (EFB) have not been used, even though these palm kernel shells (PKS) can be sold directly and sell well. This means that if the energy source only comes from palm fiber (mesocarp fiber) and empty fruit bunches (EFB), 100% of the palm kernel shells (PKS) can be sold. This can be done by pyrolysis.
Biochar in the soil can last hundreds or even thousands of years. Biochar which comes from agricultural waste such as empty fruit bunches (EFB) and palm fiber (mesocarp fiber) will become a carbon sink through carbon sequestration, so that the concentration of CO2 in the atmosphere is reduced as long as the biochar is not decomposed. From a climate perspective, this is very beneficial and later you can get compensation in the form of carbon credits. A number of standards and verification methods to facilitate monetization are currently being developed.
Empty fruit bunches (EFB) and palm fiber (mesocarp fiber) are waste from palm oil mills, whereas biochar is applied in palm oil plantations. Management in the palm oil industry generally separates the mill division and the plantation division, so new management methods are needed if biochar production using pyrolysis is carried out. Apart from using biochar for core plantations (managed by palm oil company), it can also be used for plasma plantations (managed by farmer).
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.
Palm oil mills that have excess energy, especially electrical energy, will have more freedom to develop their business. The excess electrical energy could have come from the production of electricity from the use of biogas. Liquid waste (pome) from palm oil mills is the raw material for biogas production. A palm oil mill with a production capacity of 30 tons of FFB/hour will be able to generate 1 MW of electricity and so on. One of the products that can be processed from the utilization of palm oil solid waste as well as the development of this business by utilizing excess energy is EFB pellets production. With the high price of palm kernel shells or PKS and wood pellets, the driving force or need for EFB pellets is increasing. Global awareness regarding decarbonization or CO2 removal (CDR) or CO2 reduction is the main driving force.
Apart from that, the production of EFB pellets can also be carried out by a separate company by purchasing the raw materials for EFB from palm oil mills. With conditions in Indonesia where there are still very few palm oil mills that have biogas units so that they have electricity supply and can process EFB into EFB pellets, there is still a lot of EFB that has not been utilized and becomes waste that pollutes the environment. This makes EFB pellet producing companies not have to worry about the supply of EFB raw materials. In fact, because the amount or volume of EFB is very large, the EFB pellet plant will be overwhelmed by the abundance of this raw material.
However, due to the high content of EFB in potassium and chlorine (ash chemistry), the use of EFB pellets is limited or can only be used in certain types of power plants, especially stokers and fluidized beds. In fact, most power plants currently use pulverized combustion technology. This is so that the chemical content of ash in EFB must be made as friendly as possible to boilers, especially those with pulverized combustion technology. This can be done so that the chemical content of the ash in the form of potassium (K) and chlorine (Cl) is only less than 2000 ppm. Potassium (K) with a low melting point causes deposits or scale to form in the heat exchanger pipes in the boiler so that the efficiency of heat exchange decreases while chlorine (Cl) is corrosive which shortens the life of the equipment. The treatment was even successful in reducing K and Cl by up to 80% so that the problem of fouling thickness and corrosivity was also reduced by 80%. With the number of palm oil mills in Indonesia reaching around 1000 units, of course the amount of EFB that can be processed into EFB pellets is also very large.
