Export of PKS and Wood Pellets for Biomass Power Plants and BECCS in Japan

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. 

Laboratory-Scale Pyrolysis Equipment for Biochar Production Trials and Research

The decarbonization trend continues to grow across all sectors of life as part of a global consensus to save the earth. Biomass plays a strategic role through biotransition, where biomass acts as a carbon-neutral fuel, thus preventing it from contributing to increased CO2 emissions in the atmosphere, and through carbon-negative programs with carbon sequestration. Substantively, decarbonization through carbon-negative programs (CDR/carbon dioxide removal) will be effective if biomass fuel, as a carbon-neutral fuel, or the use of other renewable energy sources, is also increased. In other words, efforts to reduce atmospheric CO2 concentrations cannot simply involve absorbing CO2 from the atmosphere (carbon capture and storage). In the context of biomass-based renewable energy, the practical application of wood chip and wood pellet production as carbon-neutral renewable fuels will complement biochar (carbon-negative). Read more details here.

Biochar, a product of biomass pyrolysis, or biocarbon products used as a medium for climate change mitigation through carbon sequestration/carbon sinks, is not yet as popular as the use of biomass as a renewable energy source, such as wood chips, wood pellets, or palm kernel shells (PKS). For comparison, global biochar production in 2023 was 350,000 tons, while wood pellet production was 47 million tons. With a conversion of biomass to biochar of approximately 30%, the amount of dry biomass processed into biochar in 2023 was 1.2 million tons, compared to 47 million tons of wood pellets in the same year, or only about 2.6% of the biomass used for wood pellets—a significant gap. However, biochar is predicted to gain momentum and be produced on a large scale globally. The application of biochar as part of carbon capture and storage (CCS) is currently experiencing the fastest growth compared to other CO2 reduction (CDR) efforts. Biochar leads in CDR credits in the voluntary carbon market (VCM), with over 90% globally by 2023 as per the cdr.fyi database.

Furthermore, carbon capture and storage (CCS) applications using absorber-stripper columns, where the captured carbon dioxide is stored in the Earth's crust, remain expensive. Pyrolysis technology for biochar production, meanwhile, is increasingly developing, making it easy to operate, efficient, and environmentally friendly, with the potential to produce various by-products that offer additional benefits. These pyrolysis units can even be integrated with processing plants, such as palm oil mills. For more details, read here.

Including the BECCS (Bioenergy with Carbon Capture and Storage) application which is overall a carbon negative program or CO2 removal from the atmosphere (CDR / Carbon Dioxide Removal) but building a bioenergy unit such as a biomass power plant itself is also not cheap, especially with the addition of carbon capture and storage (CCS) equipment. A number of countries that already have many biomass power plants, for example Japan with around 300 biomass power plants, to become carbon negative operations or part of CO2 removal from the atmosphere (CDR / Carbon Dioxide Removal) will be easier by upgrading them with the installation of carbon capture and storage (CCS) equipments. But in general, to absorb CO2 in the atmosphere and achieve climate targets, the application of biochar produced with pyrolysis units is easier, cheaper and strategic.

To anticipate and prepare for the growing era of CO2 removal from the atmosphere (CDR), biochar research must also be enhanced. Pyrolysis equipment that can cover or carry out comprehensive biochar production trials under all measurable production process operating conditions is crucial. Biochar product quality parameters are determined by three factors: the raw material or type of biomass, the production process, and the biomass pretreatment. For more details, read here. Important variables in the biochar production process in the pyrolysis unit, such as duration/residence time, temperature, and heating rate, must also be able to be handled with this equipment.

Furthermore, the issue of exhaust emissions is also crucial. This is because carbon standards organizations like Puro, Verra, and CSI require exhaust emissions to meet certain thresholds. Furthermore, excess heat from pyrolysis and/or liquid and gaseous products must be utilized. This means that laboratory-scale pyrolysis equipment must be sophisticated enough to meet these requirements. Following the methodologies developed by these standards organizations is essential for producing certified biochar to earn carbon credits. With each ton of CO2 equivalent removed from the atmosphere, or CO2 Removal Certificates (CORCs), worth over $150, this is certainly very attractive.

The diverse uses of biochar, such as in agriculture, animal husbandry, and even for concrete construction, further encourage its implementation in the future. Even if there is a question, for example, about the use of biochar in the agricultural sector: should biochar be prioritized for soil fertility or climate solutions first? This is certainly not a dichotomous question, but rather a driving force for its application, which is strongly influenced by factors that are problematic in the region or area. For more details, read here. To achieve the best performance while minimizing the risks of biochar production, increasing biochar production capacity is necessary, starting from the laboratory scale, pilot scale, demo scale, and finally commercial plants. By understanding the characteristics of the production process gradually and in depth, the hope is that the success rate of large-scale or commercial production will also be high. 

Exploring the Market for Bioenergy and Biocarbon Products in the Era of Global Decarbonization

The demand to lower the earth's temperature by reducing greenhouse gas concentrations through various global agreements such as the Paris Agreement and Net Zero Emissions (NZE) 2050, followed by technical follow-up through decarbonization for various sectors and industries, continues. This is the driving force for increasing renewable fuels, especially those based on biomass or bioenergy products, which have been implemented, but are experiencing dynamics in the form of fluctuations in demand and prices. Bioenergy, with its numerous advantages and uniqueness as a renewable energy, cannot be replaced in this era of global decarbonization, even though in the near future some subsidies for biomass fuels or bioenergy will be eliminated.

This is closely related to a government's decarbonization priorities, particularly among the various emerging options. Bioenergy products can vary in quality, but all have their own market segments within specific industries. Furthermore, the sustainability of biomass sources is also a crucial aspect in the business and use of bioenergy, and is strictly enforced by standards such as GGL, FSC, SBP, RED III, and SURE. Industrial groups such as cement, iron and steel, chemicals, and even the aviation sector, which previously relied 100% on fossil fuels or energy sources, are gradually shifting to renewable energy sources.

Bioenergy products such as industrial wood pellets and industrial wood briquettes are primarily marketed in the power generation industry and as fuel for industrial boilers. Industrial wood pellets are very popular and are produced in larger quantities than industrial wood briquettes. Due to the elimination of subsidies and the implementation of sustainability certification, biomass fuel producers are required to produce better quality products using environmentally friendly and accountable raw materials. This also applies to bioenergy derived from agricultural waste, which generally lacks sustainability certification at large production capacities.

Biomass power plants operating near carbon neutrality can then be upgraded to carbon-negative operation, or atmospheric carbon dioxide removal (CDR) by adding carbon dioxide capture and storage (CCS) equipment. Biomass power plants equipped with CCS devices are popularly called BECCS (Bio-Energy Carbon Capture and Storage). It is predicted that the BECCS era will not be far off, and countries with biomass power plants can easily upgrade to BECCS. Expensive CCS equipment and low carbon credit revenue from CDR remain current obstacles. Japan, with around 300 biomass power plants, has great potential to upgrade to BECCS. And as a biomass power plant, the need for fuel will always be needed, such as wood pellets and PKS (palm kernel shells). For more details, read here.

One successful example of BECCS is the Stockholm Exergi BECCS project. BECCS illustrates how existing biomass power generation infrastructure can be leveraged to generate sustainable carbon dioxide sequestration. The Stockholm project, based on sustainably sourced biomass fuel, secured one of the world’s largest carbon sequestration deals with Microsoft, a significant contract worth SEK 500 million (~89 billion rupiah). Their model integrates carbon capture with a district heating system, maximizing energy efficiency while achieving permanent carbon dioxide sequestration.

Similarly, several other large industries, such as cement, aluminum, and chemicals, are also gradually decarbonizing. Biomass fuels, such as wood pellets and agricultural/plantation waste like palm kernel shells (PKS), are preferred in this sector. Besides their high energy content, these biomass fuels are more affordable than derivatives like torrefied biomass and charcoal/biochar. With the gradual transition or decarbonization of these industries, the demand for biomass fuels will also continue to increase.

Meanwhile, biocarbon products such as torrified biomass (biocoal) and carbonized biomass (biochar/charcoal) are starting to attract attention and are expected to reach mass production levels in the near future. Power plants typically favor biocoal due to its higher energy content, hydrophobicity, which allows it to be stored in open areas like coal, and ease of crushing (high grindability index). Meanwhile, biochar/charcoal, especially in the iron and steel industry, is highly suitable for producing low-carbon steel and even green steel. The reductant for blast furnaces, which previously used coke from coal, can be replaced by charcoal or biochar. Charcoal or biochar with high purity (fixed carbon >85%) and low impurities are required for blast furnace reductants. For more details on this, please read here and here.

Meanwhile, the use of biomass for sustainable aviation fuel or SAF (Sustainable Aviation Fuel) is also very possible. This is because currently there are three leading production processes for SAF production: HEFA (Hydro-processed Esters and Fatty Acids), FT (Fischer-Tropsch), and ATJ (Alcohol to Jet Fuel). Biomass through thermochemical processes, namely in FT (Fischer-Tropsch) and biochemical processes, namely in ATJ (Alcohol to Jet Fuel), can be used as raw material or feedstock. Meanwhile, the raw material or feedstock for the HEFA process is not solid biomass but vegetable oil, used cooking oil, animal fats, and so on. So the broad application of biomass as various important energy sources in the era of global decarbonization is a driving force for biomass production both through the forestry sector and sustainable agriculture/plantations.

 

Hydraulic Press Type Biomass Briquettes, Efficient for Small Capacity

Wood processing factories and sawmills that produce small amounts of wood biomass waste, such as 5-10 tons per day, can process it into value-added products, namely briquettes. Briquettes and pellets both use biomass densification technology, but pellets are far more popular than briquettes. Wood pellets are typically used for large-scale power plants with annual demand of tens or even hundreds of thousands of tons. Briquettes (wood briquettes) are typically used for smaller capacities, and there are also wood briquettes for special applications, such as charcoal and BBQs. The question is, which type of wood briquette is suitable for this small amount of waste?

Compared to wood pellets, which only use one type of production technology—a roller press—wood briquette production uses three types: piston press, mechanical press, and screw press. For more details, read here. Of the three, hydraulic wood briquette is the most suitable type for processing this "small" amount of waste. This is because it uses the least electricity, can operate automatically, and is stable, even for 24/7 operation. The sawmill and wood processing industry, in addition to achieving clean production units (zero waste), also benefits from contributing to renewable energy.

Technically, briquette production is also easier than pellet production, due to the looser moisture content and particle size. Even for abrasive biomass materials, briquetting, particularly with piston presses and hydraulic presses, can handle these materials more effectively than roller-press pelletizing. The wear and tear on equipment in pelletizing these materials is much greater, while in briquetting, this is much less. This is because the contact area during pressing/compaction in pelletizing is much larger than in briquetting. Therefore, in briquetting, it is easier to replace certain machine components that wear out due to abrasive materials, unlike in pelletizing, which requires replacing dies and even rollers.

As the era of decarbonization accelerates, the use of renewable fuels, particularly biomass, such as wood waste, is also growing. Briquetting, particularly hydraulic press briquettes, simplifies handling and use in furnaces. Biomass boilers that feed fuel manually will easily utilize these hydraulic press briquettes. Small and medium-sized industries using small boilers will be able to utilize these hydraulic press briquettes.

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.

Green Aluminum and the Role of Biomass-Based Energy

The need for aluminum is predicted to increase, including in the construction, transportation (including aircraft), automotive, household appliances, and electronic equipment sectors. Green aluminum production from bauxite mining, then processed into alumina as an intermediate product from bauxite refining and into the final product in the form of aluminum, is very ideal. Aluminum production, especially from the processing of alumina into aluminum, requires very large electrical energy. For the production of around 300,000 tons/year of aluminum, approximately 1 GW (1,000 MW) of electrical energy is needed. To meet these electrical energy needs, very large power plants need to be built. And if using fossil-based energy sources, especially coal, the need will be very large.

PT Inalum in North Sumatra is an example of green aluminum production in the production of aluminum from alumina. This is because the aluminum production from alumina uses energy from hydroelectric power plants (PLTA) to meet its electricity needs. However, for more than 40 years, the aluminum plant has imported millions of tons of alumina as its raw material. And once the alumina plant from bauxite in Mempawah, West Kalimantan, is operational, the majority of the alumina used as PT Inalum's raw material will be supplied from the alumina plant in Mempawah, West Kalimantan. Approximately 1 million tons of alumina will be produced from the alumina plant in Mempawah, West Kalimantan, or more than 80% of PT Inalum's alumina needs in North Sumatra.

Alumina production from bauxite also requires significant electrical energy, necessitating a power plant capable of meeting the plant's operational needs. Most alumina plants still rely on fossil fuels for electricity production. For decarbonization efforts, renewable energy sources, such as biomass-based wood pellets, are feasible. Wood pellets can be used with a gradual cofiring ratio, ultimately leading to full-firing, or 100% use of wood pellets or other biomass-based energy.

 

The demand for renewable energy, particularly biomass-based energy, is enormous and sustainable, necessitating biomass sources capable of meeting this demand. These biomass sources can be woody biomass or agricultural waste. Woody biomass sources include forestry waste, wood processing industry waste, and wood produced by energy plantations. Meanwhile, agricultural waste sources include agricultural and plantation waste, as well as agro-industrial waste. Sustainability certification also requires attention, and in the near future, it could become mandatory regarding the origin of biomass-based energy sources. 

Biochar for Sustainable Coconut Productivity

Coconut fiber accounts for 30%, or about a third, of the weight of a coconut. This material is generally left in plantations and remains largely unused, potentially polluting the environment. With Indonesian coconut production reaching approximately 2.9 million tons per year, or 15.13 million coconuts per year, the potential for coconut fiber production is enormous, amounting to approximately 1 million wet tons (average moisture content of 60%) or 500,000 dry tons (10%) of moisture.

The volume of coconut husk is largely unaffected by the government's recent policy of exporting whole coconuts, particularly to China, as shown in this video. Many coconut-based industries are struggling to secure raw material supplies, even leading to factory closures. Industries such as dessicated coconut, coconut milk, coconut shell charcoal and charcoal briquettes, and activated carbon are severely impacted by this policy. Selling processed or industrialized coconut products would clearly add greater value and create jobs. Developed countries also export finished or semi-finished goods, not raw materials.

The industrialization of coconut-based products is crucial. Like palm oil, coconut processing products are primarily used for food products. Utilization for energy or biofuel is also very possible, such as for sustainable aviation fuel or SAF (Sustainable Aviation Fuel). Even for palm oil, the use of biofuel is in the form of a mandatory blend of palm oil from CPO (crude palm oil) in biodiesel 40% this year and is being reviewed to be 50% (B50) by 2026, as well as palm oil from PKO (palm kernel oil) for a 3% blend for sustainable aviation fuel or SAF in 2026. The main content of coconut oil is lauric acid, the same as palm kernel oil or PKO. Lauric acid consisting of 12 carbon atoms (C) or MCFA (medium chain fatty acids) is very suitable for the use of sustainable aviation fuel or SAF must have a carbon atom bond or C bond in the range of C10-C15, for more details read here.

 

Coconut productivity continues to decline due to inadequate or slow replanting programs. A similar situation is also experienced by oil palms (for more details, read here), and this presents a unique obstacle. The area of ​​coconut plantations that needs replanting also reaches tens or even hundreds of thousands of hectares. For example, in Riau Province, the target is 43,388 hectares of coconut plantations to be rejuvenated by 2025. In addition to increasing coconut productivity through the use of superior seeds, intensification is also necessary. High coconut productivity and high selling prices are driving this replanting.

Utilizing or producing biochar from coconut fiber is a solution to increase sustainable coconut productivity. Biochar can also significantly support organic coconut plantations. Although coconut trees are generally not fertilized adequately or even not at all, they still bear fruit. Biochar increases fertilizer use efficiency because biochar acts as a slow-release fertilizer agent. Regarding fertilization, coconuts differ significantly from oil palms, which require fertilization for fruiting and are highly dependent on chemical fertilizers. In fact, fertilization is the highest cost component in oil palm plantations. Organic coconut products produce desirable derivative products with high selling prices.

The potential revenue from carbon credits is also very attractive. To obtain carbon credits, or BCR (Biochar Carbon Removal), the biochar application, including the production process, must be verified by a carbon standards agency. Carbon standards agencies such as Puro Earth, Verra, and CSI have developed methodologies that biochar producers must follow to obtain these credits. 

AI for Palm Oil Mills or New Product Development with New Process Design?

AI applications have penetrated various sectors, including palm oil mills or CPO mills. AI applications for palm oil mills are still relatively new, so few, if any, have implemented them. One palm oil mill that has implemented AI is Minsawi Industries in Kuala Kangsar, Malaysia, with a capacity of 45 tons of fresh fruit bunches (FFB) per hour. The use of AI has resulted in annual savings of RM 1.6 million (Rp 6.24 billion) due to reduced oil loss, reduced maintenance costs, and a 33% reduction in labor. However, there are concerns that using AI for palm oil mills could potentially lead to job losses. Even with fewer workers, incomes are higher.

The cost-to-benefit ratio is certainly a crucial consideration for any new technology, including the use of AI. The amount of money spent must yield equivalent or greater benefits. In the case of the AI ​​application in the palm oil mill, the cost of the AI ​​was RM 5 million (~Rp 19.5 billion), meaning that with savings of RM 1.6 million per year, the investment in the AI ​​equipment would be recovered in approximately three years. This is a reasonable return on investment. However, investing that much to improve efficiency in an existing mill, or for example, 15% of the main mill, requires comprehensive consideration.

Several devices, such as sensors, predictive tools, and AI applications, are integrated to improve the efficiency of palm oil (CPO) production. More specifically, the key components of an AI-based palm oil mill include: first, advanced sensors. These sensors are installed throughout the palm oil mill to obtain real-time data on critical parameters such as temperature, pressure, amperage, and machine performance. Second, AI-enabled CCTV cameras. Several cameras are installed at strategic locations to monitor key areas, such as detecting the volume of fresh fruit bunches (FFB) and their quality, and providing this information to control the production process. Third, an AI-driven control system. These systems automatically optimize processes, manage equipment operations, and utilize resources based on real-time data analysis.

Meanwhile, developing new products means increasing the added value of existing materials. This increased added value can be far greater than that gained from increasing factory efficiency through AI applications. Raw materials that were previously underutilized or even discarded, polluting the environment, can generate significant benefits from developing new products. While optimizing factory performance is crucial for achieving high efficiency, innovation in new product development is equally crucial.

In the palm oil industry, new product development can be achieved by creating various derivatives from crude palm oil (CPO) and processing various biomass waste from palm oil operations, both from mills and plantations. Numerous products can be produced from these processes. For example, CPO derivatives produce biofuels such as biodiesel, cooking oil, stearin, olein, and so on. Biomass waste can be processed into bioenergy, biocarbons, biofuels, biomaterials, and biochemicals.

 

Designing efficient production processes is crucial for producing competitive products. Likewise, low-emission production, minimizing waste, or even zero waste, is also a key focus. Integrating various production processes, particularly for energy savings, including waste heat recovery, is highly feasible, enabling efficiency and lower production costs. The significant benefits of AI applications in palm oil mills or CPO production include the potential for further use in new product development, including designing the most efficient production processes possible.

Ultimately, if the development of these new products can be carried out and AI is integrated, the need for labor will increase in these business units, even if each business unit is operating efficiently. The production of various derivative products, including specialty chemicals, is highly possible with the development of new products that keep pace with the times. Furthermore, on the plantation side, AI and mechanization can also be utilized to reduce 3D (dirty, dangerous, demeaning) jobs, resulting in more efficient work and increased income. Even mechanization in oil palm plantations is still low, making it more urgent than AI applications. 

Replanting Palm Oil Plantations and Utilizing Old Palm Oil Trunks Waste (Presentation Version)

Aging plants are one factor in declining palm oil productivity. Palm oil trees begin to decline in productivity after 20 years and need to be replaced after 25 years. Therefore, rejuvenation or replanting must be carried out periodically according to the age of the trees.

Furthermore, the demand for palm oil continues to grow in line with global population growth. For the domestic market, biofuel use takes the form of a mandatory 40% palm oil blend in biodiesel (B40) this year, which is being reviewed to increase to 50% (B50) by 2026, and a 3% blend for jet fuel by 2026. Demand for the international market also continues to grow. The main destinations for Indonesian palm oil are India, China, Pakistan, Bangladesh, the United States, the Netherlands, Spain, Italy, Egypt, and South Africa.

Replanting palm oil plantations is crucial because it maintains sustainable palm oil productivity and prevents or reduces deforestation for new lands. The potential volume of old palm oil trunk waste generated is enormous, and there are numerous utilization options, including bioenergy, biocarbon, biomaterials, biofuels, and biochemicals.

To read and access the presentation, please download here. 

Biochar and Premium Compost Production from Organic Waste Processing

Biochar and compost production both use organic materials. The difference lies in their compatibility level. Wet, nutrient-rich organic materials with little lignin are more suitable for compost production. Dry, lignin-rich organic materials are more suitable for biochar production. Therefore, sorting these organic materials is necessary to achieve optimal results. With organic waste comprising up to 60% of municipal waste, the raw material requirements for both biochar and compost production are estimated to be substantial.

Biochar production is a thermal process, while compost production is a biological process. A biochar production unit, a pyrolysis unit, can be installed adjacent to and integrated with a compost production unit at municipal waste treatment facilities and similar facilities. The biochar product is then used to produce compost, improving the quality of the compost to premium compost and accelerating composting times. For more details, read here. Premium compost can also be sold at a higher price commensurate with its quality. Excess energy from biochar production or pyrolysis operations can be utilized in the waste processing of RDF fractions or others. 

The production potential of this premium compost is enormous. This makes it suitable for use on critical land from post-mining reclamation, which covers millions of hectares, or even hundreds of millions of hectares of degraded drylands. When premium compost is applied to unproductive or less productive land, it becomes fertile. For example, revegetation of post-mining reclaimed land will yield a variety of agricultural or plantation products that are economically, environmentally, and socially beneficial. Biochar, with its high carbon content, will persist in the soil for hundreds of years and, as a carbon sequestration measure, can be offset by earning carbon credits.