OPT Pellets for Biomass Power Plants and BECCS in Japan and Europe

As a tropical region known for biomass heaven, there are numerous sources that can be utilized for biomass pellet production, particularly OPT pellets or oil palm trunk pellets. This potential is certainly in line with global decarbonization efforts to save the earth from climate change and global warming. Indonesia is currently the world's largest palm oil producer, with approximately 17 million hectares of palm oil plantations. Of this area, 9 million hectares are managed by private companies, 550,000 hectares are owned by state-owned companies (PTPN), 6.1 million hectares are owned by smallholders, and the remainder remains unverified. Crude palm oil or CPO productivity has stagnated over the past five years due to the slow pace of replanting, which is around 45 million tons per year. Therefore, replanting, especially for smallholders, must be encouraged.

Most palm oil companies affiliated with GAPKI have conducted replanting periodically or once a year with an area of ​​4-5%. The palm oil companies that are members of GAPKI are 731, while according to BPS 2023 the number of palm oil companies in Indonesia reached 2,446 companies, spread across 26 provinces. Meanwhile, in smallholder palm oil plantations, replanting is very small, namely in 2024 alone with a target of 180,000 hectares (around 3% of smallholder palm oil plantations) but the realization is less than 40,000 hectares (0.7% of smallholder palm oil plantations) and even because it is so far from the target set in 2025 the government's target for replanting smallholder palm oil plantations was reduced to only 120,000 hectares (around 2% of smallholder palm oil plantations).

With an average of 125 trees per hectare of palm oil plantation, each tree yielding an average dry weight of 0.4 tons, this yields 50 tons of dry biomass per hectare. For an area of ​​10,000 hectares, this translates to 0.5 million tons of dry biomass, and for an area of ​​100,000 hectares, this translates to 5 million tons of dry biomass. Optimistically, Indonesia could achieve 5% replanting, or 820,000 hectares, which would yield 41 million tons of dry biomass per year. Malaysia, with 5% replanting, or 285,000 hectares, would produce 14.25 million tons of dry biomass per year.

For a more practical calculation, let's consider the average palm oil company group in Indonesia with five palm oil mills and 50,000 hectares of palm oil plantations. With annual replanting of 5% of the total plantations, 2,500 hectares are replanted annually. This replanting will produce 125,000 tons of dried oil palm trunks. This volume will then be used to produce oil palm trunk pellets, or OPT pellets, assuming 3% loss during the production process. This yields 121,250 tons of OPT pellets per year.

Using a Handymax vessel with a capacity of 25,000 tons per shipment, five shipments are required, or using a Panamax vessel with a capacity of 50,000 tons per shipment requires two shipments plus one Handymax vessel. Alternatively, using a vessel with a capacity of 10,000 tons per shipment requires approximately 12 shipments per year. Shipments with large capacity handymax and panamax vessels are suitable for the European market, while smaller vessels, namely 10,000 tons/shipment, are suitable for the Japanese market.

Japan, with around 290 biomass power plants, should technically be able to move towards BECCS more quickly, but it's just a matter of policy and regulation. Installing CCS (Carbon Capture and Storage) units in biomass power plants makes the plant's operation carbon negative, or carbon (dioxide) removal (CDR) or Greenhouse Gas Removals (GGR). Furthermore, Europe has a successful example of BECCS implementation, namely the Stockholm Exergi BECCS project. This Stockholm project, based on sustainable biomass fuel, has secured one of the world's largest carbon sequestration agreements with Microsoft.

Furthermore, policy support for biomass power plants with CCS/BECCS or those capable of CDR/GGR is also increasing, as in the UK. This includes the indefinite extension of support for biomass power plants to allow time for plants to transition to BECCS. Modifications and retrofitting of existing power plants will eliminate millions of tons of CO2 annually while still generating electricity from renewable sources. This potential can only be maximized with government support for the transition to BECCS.

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. 

Biochar and Food & Energy Security

As the population increases, so does the need for food and energy. This is why food and energy production must also be increased. Increasing food production is closely related to the quality and quantity of land. However, although the quantity of land is very large, its quality tends to decline so that plant productivity automatically also decreases. The decline in land quality or land damage occurs on very large areas of land up to millions of hectares. With the area of ​​sub-optimal and degraded lands reaching hundreds of millions of hectares consisting of 122.1 million hectares of dry land; 8 million hectares of post-mining land; 24.3 million hectares of critical land; a total of around 154.4 million ha, it can be said that the potential loss of food products also reaches millions of tons. Meanwhile, damaged land will be further damaged if no repair efforts are made. Efforts to upgrade or improve the quality of this land should be an important priority in efforts to achieve food and energy security.

Biochar application is a solution for improving these lands. Raw materials for biochar production are also very abundant, including dry palm oil EFB of around 30 million tons/year, bagasse of 2 million tons/year, corn cobs of 5 million tons/year, cassava stalks of 3 million tons/year, waste wood of 50 million tons/year, rice husks of 15 million tons/year, cocoa shells and so on. With the application of biochar, agricultural productivity can increase by an average of 20% or even up to 100%. If applied on a macro or national scale, say with a 20% increase in production, for example, rice production will increase to 36 million tons/year from the previous 30 million tons/year, corn will increase to 18 million tons/year from the previous 15 million tons/year, crude palm oil or CPO to 60 million tons/year from the previous 50 million tons/year. This will save land use so that the opening of forest land for food crops and (bio)energy such as food estates may not be necessary or at least slow it down. But why until now has biochar not received attention and been used as a solution?

In addition, biochar production with pyrolysis will also produce a number of by-products that can be used for energy applications or others, as in the diagram above. Many agro-industries require drying in their production processes, so this is an additional advantage of using pyrolysis technology for biochar production. While from the environmental aspect, biochar is also a carbon sequestration so that it is a climate solution and can get carbon credit. Likewise in waste management, because the raw material for biochar is biomass waste from agriculture, plantations and forestry, even from organic waste, the pyrolysis and biochar business is also a solution to this problem.

Optimizing Pyrolysis and Biochar in the Palm Oil Industry

Indonesia's CPO production currently reaches around 50 million tons per year with a land area of ​​around 17.3 million hectares. This means that the average CPO production per hectare is only 2.9 tons or per million hectares produces 2.9 million tons. If biochar is used and there is a 20% increase, it means there is an increase of 10 million tons of CPO per year and this is equivalent to saving around 3.5 million hectares of land, or the use of biochar will slow down forest clearing (deforestation) for palm oil plantations.

The average speed of Indonesian palm oil plantation area is 6.5% per year or equivalent to about 1 million hectares per year for the last 5 years, while the increase in palm oil fruit production or FFB (fresh fruit bunches) is only 11% on average. Even the largest expansion of palm oil land occurred in 2017, which increased by 2.8 million hectares. By opening 1 million hectares of forest, national CPO production only increased by 11%, while without the need to open forests, namely with the application of biochar, there could be a 20% increase in productivity. And the 20% increase in FFB yield (fresh fruit bunches) using biochar is a low estimate.

With the number of palm oil mills in Indonesia reaching more than 1000 units and tens of millions of tons of biomass waste, especially empty palm fruit bunches (EFB), the volume of biochar production produced is certainly very large. In addition, pyrolysis technology can replace combustion technology which is generally used in palm oil mills to produce steam for electricity production and sterilization of fresh fruit bunches (FFB) in CPO production. With pyrolysis raw materials using palm oil tankos and being able to replace palm kernel shells, 100% of palm kernel shells (PKS) can be sold or exported. The sale of palm kernel shells or PKS (palm kernel shells) will certainly provide additional attractive benefits for the palm oil company. Palm kernel shells or PKS are the main competitors of wood pellets in the global biomass market.

In addition, the use of biochar also saves fertilizer use and the highest operational cost on oil palm plantations is fertilizer so this is very relevant. Tens of billions of costs spent on fertilizer can be reduced by using biochar, especially since the biochar comes from its own waste so that it will automatically become a solution for biomass waste management. Including biopesticides and liquid organic fertilizers can also be produced from the pyrolysis process. Carbon credit is the next business potential. This is because the application of biochar to the soil for agriculture or plantations is an effort for carbon sequestration / carbon sink.

The benefits that can be obtained from this biochar carbon credit are also large, even globally biochar carbon credit ranks first or more than 90% in Carbon Dioxide Removal (CDR) recorded in cdr.fyi. However, there are indeed many large biochar producers who do not sell their carbon credits because of the methodological requirements of standard carbon companies such as Puro Earth and Verra, and these biochar producers are comfortable with their biochar sales business, especially since these producers have existed (established) since before carbon credits were available for biochar. 

Why Is It Better For Palm Oil Mills To Use Pyrolysis Rather Than Combustion Furnaces?

The palm oil mill production process or CPO production always requires steam for sterilization, this means a boiler is needed. The heat needed by the boiler usually comes from a furnace with fuel in the form of mesocarp fiber and palm kernel shells. Apart from being used for sterilization, the steam is also used to rotate turbines and produce electricity. With continuous pyrolysis, heat for the boiler can be supplied from syngas and biooil products. Apart from that, pyrolysis also produces biochar as the main product and pyroligneous acid, which is a kind of wood vinegar. The last two ingredients will be very useful in palm oil plantations. Using these two fuels (gas and liquid fuel) will make the furnace produce cleaner smoke compared to burning solid fuel in the form of mesocarp fiber and palm kernel shells which is usually done up to now.

Many palm oil plantations are on acidic soils so the pH needs to be raised and biochar can be used effectively. The biggest operational cost for palm oil plantations is fertilizer and the use of biochar will increase fertilizer efficiency thereby reducing fertilizer input and saving costs. The application of biochar in palm oil plantations apart from improving soil quality thereby increasing the productivity of palm oil fruit or FFB (Fresh Fruit Bunch) is also part of the climate solution, namely carbon sequestration which receives compensation in the form of carbon credits. The carbon credits will also provide additional income for the palm oil company. Apart from that, pyroligneous acid can also be used as fertilizer and biopesticide.

The development of combustion technology is also increasingly developing, starting with the use of moving grates to reciprocating grates used to increase boiler efficiency. But the basic question is how profitable is the use of this technology for palm oil companies in overall? The use of the combustion furnace only increases the efficiency of the boiler, whereas the use of continuous pyrolysis in addition to sufficient boiler heat can also produce other benefits in the form of environmental and financial benefits. Environmental benefits from improving soil fertility conditions and minimizing fertilizer being leached or lost into the environment with the slow release fertilizer technique, for more details read here and also the income from carbon credits which is also big.

The application of biochar is for palm oil plantations, while biochar production is from palm oil mills, while the plantation division and mill division are two separate organizations within the palm oil company. The role of the general manager in particular is needed to handle this so that the company's big goals as a profitable, environmentally sound and sustainable company can be achieved. Factors in the form of maximizing profits, improving land and the environment, as well as being part of the climate solution with carbon sequestration will be a strong driving force for the use of continuous pyrolysis compared to combustion furnaces.

Mini Palm Oil Mill Solution to Maximize FFB Processing

It is estimated that around 40% of palm oil plantations in Indonesia are owned by the people, this means that with the current area of palm oil plantations reaching around 15 million hectares, smallholder palm oil plantations reach about 6 million hectares with a total of 16 million smallholders. Of course the amount is not small, so if the palm fruit produced (Fresh Fruit Bunch / FFB) from the plantation can be processed optimally, it will increase the national production of crude palm oil or CPO. The area of ​6 million hectares itself is larger than Malaysia's palm oil plantation, which is the second largest producer of palm oil in the world, after Indonesia.

A number of FFB production from smallholder palm oil plantations are often constrained to supply to palm oil mills related to infrastructure and distance. This makes it take a long time or even too late to supply to the nearest palm oil mill, thus reducing the quality of palm fruit / FFB, automatically producing the crude palm oil. Low quality makes FFB prices cheap and even rejected by palm oil mills because they do not meet the required quality standards. This is certainly detrimental to farmers so that efforts are needed to overcome them.

Palm oil mills usually have a capacity of between 30 tons of FFB/hour to 120 tons of FFB/hour or it can be said that the average capacity is 60 tons of FFB/hour. The palm oil mill is owned by a palm oil company and with this capacity is very large for smallholders with limited palm oil plantation area. A mini palm oil mill with a capacity of 1 - 4 tons of FFB/hour is likely to be suitable for these smallholders. With this capacity, besides being cheaper, it requires narrower land and simpler production techniques so that FFB production from remote locations can be processed easily.

The palm oil production process can also be simplified or simplified so that it can be safe and easy to operate, for example in a large factory that uses high pressure steam, it can be simplified to only use low pressure steam. In large factories, high pressure steam is used to drive a steam turbine which is connected to a generator so as to generate electricity for the palm oil mill operation itself and the steam output from a low-pressure steam turbine is used for FFB sterilization. Meanwhile, if the mini mill has low pressure steam or only atmospheric steam, the steam is directly used for FFB sterilization, while the electricity for the operation of the mini palm oil mill comes from outside (external). With this mini capacity, the need for electricity for these operations is also not big.

The high quality of the palm oil produced can be obtained due to the quality of the raw materials and processes carried out. Good equipment performance also makes the process carried out according to the desired operating conditions. With the capacity of small palm oil mills, the volume of products produced is also small, so to achieve large volumes, it must be collected from a number of these mini palm oil mills. With more and more mini palm oil mills scattered in various locations, less FFB is wasted and quality palm oil products can be maintained. Cheap or falling FFB prices at the farmer level can also be overcome by mini palm oil mills that have good market access for their palm oil products.

Production of EFB Pellet EFB or EFB Biochar ?

One of the main obstacles for palm oil mills to develop their business is the availability of electricity. With locations that are generally located in remote areas in the middle of palm oil plantations, palm oil mills do not get electricity supply from PLN (Indonesia State Owned Electricity Company). Eventhough electricity is very important in a production process, such as in the production of EFB pellets. Even though empty bunches or EFB in general are an environmental problem for palm oil mills. If every ton / hour of EFB pellet production takes 300 KW, then for production of 10 tonnes / hour (5,000 tonnes / month) 3 MW of electricity is needed, export of biomass fuels such as wood pellets and PKS (palm kernel shell)  with bulk shipments usually requires 10 thousand tons / shipment. So if the production of EFB pellets is planned for 10 thousand tons / month so that every month can export the EFB pellets, the factory capacity or EFB pellet production is 20 tons / hour (10,000 tons / month) 6 MW of electricity is needed. For palm oil mills, utilizing liquid waste or POME to become biogas is a potential source of energy for the production of electricity. However, with a palm oil mill capacity of 30 tonnes of FFB / hour, only about 1 MW of electricity is generated from POME biogas, so to produce 6 MW of palm oil mills with a capacity of 6 x 30 tonnes of FFB / hour are generated equal to 180 tonnes of FFB / hour. In fact, the average palm oil mill has a capacity of 45 - 60 tonnes of FFB / hour, so it is impossible to generate 6 MW of electricity from the palm oil mill's POME biogas.

The use of EFB pellets is the same as wood pellets and PKS is mainly for power generation. All three are biomass fuels. The high chlorine and potassium content in empty palm fruit bunches or EFB makes their use limited to power plants due to corrosion and scale causes. Not all power plants can use EFB pellets at large capacities or quantities. The use of coal-fired power plants with pulverized combustion technology can only be used with a small ratio or an estimate of less than 5%, but can be used more or even 100% in fluidized bed and stoker types of power plants. The capacity of fluidized bed and stoker type PLTU is generally much smaller than pulverized combustion.

When the biomass source is managed properly, the use of biomass fuel is an environmentally friendly and sustainable fuel. Biomass fuels like this are carbon neutral fuels, because they do not increase the concentration of CO2 in the atmosphere. This is because the biomass as a fuel source comes from plants whose growth is from the photosynthesis process, one of which uses CO2 from the atmosphere, so that when the biomass is burned, there is practically no addition of CO2 to the atmosphere. In general, there are 2 ways to overcome the CO2 concentration in the atmosphere which causes climate change and global warming, namely the carbon neutral scenario and the carbon negative scenario. In a carbon negative scenario, CO2 in the atmosphere will be captured and absorbed so that it is no longer released and the concentration of CO2 in the atmosphere can be reduced, as in the biochar application below.

Whereas in the production of biochar with pyrolysis, besides not requiring a large amount of electrical power for its operation, electricity can also be generated from the use of excess energy from pyrolysis itself. By using the excess energy from pyrolysis, the palm oil mill boiler fuel does not need to use palm kernel shells and fiber. The use of gas or liquid fuels from the excess energy of the pyrolysis process also makes burning emissions cleaner. To achieve more complete combustion, gaseous or liquid fuels are better than solid fuels. Palm kernel shells so that everything can be sold or even exported. The biochar product applied to palm oil plantations will also improve the quality of the soil so that fertilizer use can be reduced and the productivity of palm oil fruit will increase. Biochar also absorbs CO2 from the atmosphere so that the use of biochar in large palm oil plantations means that with massive applications it can also be used for carbon trading. Recent developments indicate that the use of biochar is increasingly widespread, such as biomaterials for construction, transportation, plastics, packaging, furniture and so on. The use of biomaterials for these products means substituting the use of fossil-derived raw materials.

So based on the above review, the production of biochar with pyrolysis is more profitable and easy to implement for palm oil mills compared to EFB pellet production. The addition of electricity production with a large capacity and the availability of sufficient raw materials is not easy and cheap for the average palm oil mill in Indonesia with a capacity of 45 - 60 tons of FFB / hour. Whereas in the production of biochar with pyrolysis, a certain amount of energy is produced which can be used for various purposes and the use of biochar is also multi-beneficial. Palm oil mills should consider this in particular in the aspects of waste management, plantation productivity, environmental aspects and business development, for more read here. Based on experience, the cost structure of the CPO or palm oil production business consists of about 80% of the cost of production is the cost of crops or plantation aspects, while the other 20% is the cost of processing or mill aspects. And the highest cost aspect of palm oil plantations is the cost of fertilization so that if the need for fertilizer can be reduced and the productivity of palm oil can be increased, of course it is very profitable, biochar is effective and efficient to use for this.

Why Palm Oil Mills Uninterested in Production of EFB Pellets or Fiber Pellets?

EFB (empty fruit bunch) produced by palm oil mills and even tend to be waste that pollutes the environment. Empty bunches are generally just thrown away around the area of ​​their palm oil plantations. In addition, there are also many palm oil mills that produce fiber waste which also pollute the environment. A number of palm oil mills that use high efficiency boilers generally produce this fiber waste due to reduced fuel consumption for the boiler. From the perspective of biomass energy both types of palm oil waste are potential sources of raw materials. Processing both types of waste into pellets for energy is a surefire solution to addressing environmental problems while providing added value economically. But why are almost all palm oil mills currently not interested in the production of EFBpellets and Fiber pellets from these wastes? There are at least 3 factors of analysis in answer to this question, as described below.

A. Electricity needs for the production of EFB pellets or Fiber pellets

Palm oil mills are generally located in rural areas or in the middle of the palm oil plantations, so they have to meet their own electricity needs. In addition to generating electricity at the palm oil mill, it also produces steam, because the technology used is steam turbine. And there are specific reasons why palm oil mills must use the steam turbine technology, for more details, please read here. The electricity production from the palm oil mills generally only meets the needs for the operation of the palm oil mills, so it will not be sufficient if used for the production of these pellets. Electricity needs for the production of each ton / hour of pellet is estimated to require 300 kW (0.3 MW) so that for production of 3 tons / hour requires almost 1 MW. Electricity production from biogas by utilizing liquid waste (POME: palm oil mill effluent) can be a solution to this, for more details, please read here.

B. Ignorance of the biomass fuel business and specifically fuel pellets

Palm oil mills which produce the main product in the form of crude palm oil (CPO) with the use mainly for food products, so that they tend to be less concerned with the energy sector, especially renewable energy and more specifically biomass energy in the form of pellets. Fuel pellets especially wood pellets are being "hot" and are widely used as an energy source in various parts of the world. Indeed, the characteristics of wood pellets derived from woody biomass differ slightly from pellets derived from agricultural wastes such as empty fruit bunches (EFB) and coir (fiber). This affects the users of electricity generation and also the portion of its use.

Another indication that palm oil mills only focus on CPO production is that they are not interested in exporting palm kernel shells (PKS) themselves. In general, palm oil mills only sell these PKS to exporters in their mills. The exporters will then export the PKS to the users namely power plants. Though PKS is also very much needed and as a competitor of wood pellets, because there are many similarities with wood pellets.

C. Need to create a new department for pellet production

Of course it is common to do that a new business unit would require management with new management. Palm oil mills or companies usually operate in two divisions or departments, namely the mill division for CPO production and the plantation division for the production of palm fruit (fresh fruit bunch) as raw material for CPO. Pellets production from empty fruit bunches and fiber also requires separate management to be effective and efficient.

D. Priority scale with the development of CPO derivative products

CPO or crude palm oil is the raw material for a number of palm-derived products. CPO exports are also urged to be reduced and recommended with various other CPO derivative products such as cooking oil, oleochemicals and biodiesel. In addition to increasing added value, exports of raw materials are also less prestigious. That is because the characteristics of developing countries are exporting raw materials to other countries, while the characteristics of developed countries are exporting final products. That is why the production of various CPO-derived products continues to be encouraged. For palm oil mills that are more focused and familiar with CPO production and the development of the CPO derivative industry, then the option to develop their company towards a variety of CPO derivative products may be a priority, compared to processing empty fruit bunches and fibers to produce pellets.