Become the Trendsetter of the World's Vegetable Oil Producers

In the vegetable oil market, there are 4 types of vegetable oils that are widely consumed around the world, namely soybean oil, sunflower oil, palm oil and rapeseed oil. Based on USDA data (2018) the total area of the 4 vegetable oil-producing plants in 2017 was around 208 million hectares. Soybean plantations have the largest proportion of area, namely 126 million hectares (61 percent), while the area of palm oil plantations is only 21 million hectares (10 percent). However, with an area of 126 million hectares, soybeans are only able to produce 56 million tons of oil or only 32 percent of the production of the world's 4 main vegetable oils. In contrast, palm oil with an area of 21 million hectares is capable of producing 73 million tons or 42 percent of the production of the world's 4 main vegetable oils.

The high level of palm oil production is obtained from the productivity of palm oil plantations which is much higher than the productivity of other vegetable oil producing plants. According to Oil World (2018), the average productivity of oil palm is 4.27 tons/hectare, while the productivity of other vegetable oil-producing plants is only 0.4 – 0.6 tons/ha. The productivity of palm oil is much higher, around 8-10 times compared to other types, making palm oil have a comparative advantage over other vegetable oils. This comparative advantage can be interpreted as saving deforestation in various regions of the world if palm oil is consumed by the global community or to produce the same amount of oil, the land needed for oil palm is 8-10 times smaller than other crops.

With an average annual productivity of 4.27 tons/hectare of palm oil or 17 tons of FFB/year, this is actually still quite low and productivity can be increased up to around 30 tons of FFB/hectare or 7.5 tons/hectare of oil. Increasing the productivity of palm oil is primarily by increasing soil fertility so that fertilization efficiency increases. Slow release fertilizer (SRF) is an efficient fertilizer that is economical and environmentally friendly. In addition, the use of biochar, apart from being a slow release agent in the fertilizer, will also improve soil quality or fertility by increasing soil porosity, providing organic carbon, raising soil pH, retaining water and nutrients so that they are more available to plants and as a medium for soil microbial colonies. By increasing the productivity of palm oil, followed by saving fertilizer due to increased efficiency, minimizing environmental pollution so that production costs can be reduced, it means that it is equivalent to increasing land efficiency by 76%. This means that the productivity of palm oil per year is 30 tons of FFB/hectare, or 7.5 tons/hectare oil and when compared to other vegetable oils it is 15 times more land-efficient or per tonne of palm oil requires 0.13 hectares while other vegetable oils require 2 hectares of land.

The climate solution in the form of carbon sequestration / carbon sink can also be done simultaneously with the biochar application. Every 1 ton of biochar will store or reduce CO2 (carbon dioxide) in the atmosphere by approximately 3 tons. Carbon credit from the application of biochar is a significant additional income apart from fertilizer efficiency and increased crop productivity, including palm oil yields. Moreover, the value of carbon credit tends to increase and the carbon (CO2) removal mechanism with biochar will become a trend in the future. The amount of income from carbon credit is proportional to the number of biochar applications in the oil palm plantation which will also be proportional to the area of the palm oil plantation.

The area of palm oil plantations ranging from thousands to tens of thousands of hectares owned by a company is common in Indonesia. This indicates the business potential that can be done. With the current area of palm oil plantations in Indonesia reaching around 15 million hectares, as much as 40% (6 million hectares) are smallholder plantations so that the company's plantation area is 60% (9 million hectares) which is divided into owned by Large Private Plantations (PBS), which is 8 .42 million ha (55.8%) and State Large Plantations (PBN) covering an area of 579.6 thousand ha (3.84%), for more details read here. Palm oil trees themselves can only produce well in the tropics because the temperature factor affects production through the rate of biochemical and generative reactions in the plant's body. To some extent, higher temperatures lead to increased fruit production. The temperature of 20°C is referred to as the minimum limit for generative growth and an annual average temperature of 22-23°C is required for continued fruit production. That is why not all locations on earth can be cultivated for palm oil even though the productivity of the oil is the largest compared to other plants, so that it becomes a comparative advantage in itself.

Meanwhile, from biochar production technology, it is also possible to reduce the use of solid fuels such as palm kernel shells (pks) which are commonly used in boilers at palm oil mills. Palm kernel shell which is a biomass fuel and used as boiler fuel in palm oil mills besides fiber (mesocarp fiber), can then be sold directly for both the domestic market (local) and the international market (export). The palm kernel shells can also be further processed into charcoal or activated carbon. The use of energy from biochar production technology (pyrolysis) will also increase the efficiency of boilers at palm oil mills, in addition to additional income from selling palm kernel shells or further processing. Becoming a trendsetter in the world's vegetable oil producers is very possible based on the reasons mentioned above. With Indonesia's current condition in particular, or other palm oil producing countries, with a little improvement, it is very possible to do this. Moreover, the palm oil industry produces a lot of biomass waste which is very potential as raw material for making biochar.