Slowing Palm Oil Land Expansion: Replanting or Biochar ?

The reckless expansion of palm oi plantations is definitely offside sustainability. Instead of palm oil being a blessing due to their highest productivity among other vegetable oil sources (soybeans, sunflowers, rapeseed, coconuts, etc.), growing only in tropical regions and contributing 40% of the global vegetable oil supply, they have instead become a natural disaster. The cost of this disaster is no small matter, costing thousands of lives, in addition to other material losses. This issue was particularly highlighted during the recent floods in Sumatra. Are the profits from palm oil worth the loss of life?

Clearing tens or even hundreds of thousands of hectares of oil palm plantations produces valuable timber. It's even possible to generate substantial profits from land clearing alone, even though palm oil plantations and production haven't even begun. This is what drives entrepreneurs to flock to this plantation sector, driven by the sole goal of maximizing profits without considering their own needs, resulting in widespread disasters. Furthermore, the implementation of mandatory B-40 or even B-50 biodiesel, currently being discussed, will undoubtedly create a new market for palm oil/CPO, much easier and more flexible than exporting to Europe, which is subject to the European Union Deforestation Regulation (EUDR), or to the US, which faces high tariffs.

Moreover, it has already been established that palm oil/CPO consumption for biodiesel has exceeded food demand. The mandatory implementation of the B-50 program also requires a 20% increase in CPO production capacity, or 60 million tons per year. The most profitable and fastest way to do this is through extensive deforestation, as the timber from cleared forests can be sold directly.

When the goal is to increase palm oil production gradually, safely, in a planned, and sustainable manner, adequate consideration is required, not blindly and recklessly clearing forest areas (deforestation) under the guise of land conversion. Besides the use of superior seeds, there are at least two ways to increase palm oil productivity: replanting and biochar application (part of land intensification).

According to Joko Supriyono, former chairman of GAPKI (Indonesian Palm Oil Producers Association) for the 2015-2018 and 2018-2023 periods, in his book "Is Indonesian Palm Oil Still Successful?", it is stated that if replanting of palm oil in Indonesia successfully reaches 300 thousand hectares per year, it is estimated that CPO and CPKO production in 2045 will reach 80 million tons. While currently CPO and CPKO production is around 55 million tons. And with the use of biochar, palm oil productivity will increase by an average of 30% in 5-10 years, meaning that by 2035 CPO and CPKO production will reach 71.5 million tons. Moreover, if the two methods are combined, the results should be even better.

Indonesia's current CPO production reaches approximately 50 million tons/year, covering a land area of ​​16.8 million hectares with an average CPO production of 3.55 tons/ha per hectare, or 3.55 million tons per million hectares. If biochar is used and productivity increases by 30%, this means an increase of 15 million tons of CPO (a total of 65 million tons of CPO/year) and this saves approximately 4.2 million hectares of land, or the use of biochar will slow down forest clearing for palm oil plantations. The application of biochar with compost will improve the quality of the compost to become premium compost. For more details, read here. This allows the palm oil industry to operate by utilizing all its biomass waste.

The replanting movement of palm oil plantations must be encouraged to continuously increase palm oil production. The problem of biomass waste from palm oil trees, which cover thousands of hectares, also poses a challenge. With such a large volume of old palm oil trees, utilizing them for value-added products is crucial. With an average hectare of palm oil plantations consisting of 125 trees, each tree having an average dry weight of 0.4 tons, this yields 50 tons of dry weight of biomass per hectare. For an area of ​​10,000 hectares, this yields 0.5 million tons of dry weight, and for an area of ​​100,000 hectares, this translates to 5 million tons of dry weight. An optimistic estimate suggests that Indonesia could achieve 5% replanting (very optimistic) or 820,000 hectares, which would yield 41 million tons of dry weight of biomass per year. Similarly, Malaysia, with 5% replanting or 285,000 hectares, would produce 14.25 million tons of dry weight per year.

Business readiness factors, both technologically and in terms of the market or user base, need to be carefully assessed. With such a large volume, biomass processing plants or industries can be established and operate optimally without worrying about raw material shortages. Products such as pellets, briquettes, biochar, and other bioproducts, such as other biocarbons, biomaterials, biofuels, and biochemicals, are also possible from this old palm oil trunk biomass waste. Old, dead oil palm trunks, often left unattended on land, should be utilized to produce these useful, value-added products. For more details on utilizing trunk waste for fuel pellet production (OPT Pellets), please read here. 

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.

Replanting Palm Oil Plantations in Indonesia to Maintain Palm Oil Productivity and Potential Utilization of Oil Palm Trunk Biomass Waste

One way to maintain or even increase the productivity of palm oil plantations is through replanting or rejuvenation, which is absolutely necessary. Old palm oil trees will decline in productivity, making them uneconomical. In keeping with the gradual planting of palm oil trees, replanting palm oil plantations is also carried out in stages and periodically. Furthermore, the use of superior seeds is also necessary, and one way to produce superior oil palm seeds is by using high-quality planting media, such as biochar. For more details, read here.

Palm oil companies generally replant 4-5% of their total land area annually. However, smallholders generally do not replant properly. This is due to the cost of replanting and the 4-5-year waiting period for fruiting to resume. However, because old palm oil trees naturally decline in productivity even with additional fertilizer, replanting is the only solution. Of Indonesia's approximately 16.8 million hectares of palm oil plantations, 9 million hectares are managed by private companies, 550,000 hectares are owned by state-owned enterprises (PTPN), 6.1 million hectares belong to smallholders or smallholders, and the remainder has not been verified. Specifically for replanting, the government is targeting 180,000 hectares per year for smallholders, but by 2024, only 38,244 hectares had been realized, far from the target.

Even in 2025, implementation of the replanting program will remain low, reaching only 11,777 hectares in the first quarter. Based on this reality, the government has finally lowered the annual replanting target from 180,000 hectares to 120,000 hectares. To accelerate the replanting program, the government could provide additional replanting funds to smallholder farmers. This additional funding would ideally come from business profits, specifically from the utilization of palm oil waste. Various biomass-based products are produced from the processing of palm oil waste.

For businesses based on the utilization of oil palm trunks, business readiness factors, both technologically and market-specific, require careful assessment. With an average hectare of palm oil plantations containing 125 trees, each tree having an average dry weight of 0.4 tons, per hectare yields 50 tons of dry biomass. For an area of ​​10,000 hectares, this translates to 0.5 million dry tons, and for an area of ​​100,000 hectares, this translates to 5 million dry tons. Optimistically, Indonesia could achieve 5% replanting, or 820,000 hectares, which would yield 41 million dry tons of biomass per year. Malaysia, with 5% replanting, or 285,000 hectares, would yield 14.25 million dry tons per year.

The issue of biomass waste from palm oil trees, which covers thousands of hectares, also presents a unique challenge. With the vast volume of old palm oil trees, utilizing them to create value-added products is crucial. This vast volume allows biomass processing plants or industries to be established and operate optimally without worrying about raw material shortages. Products such as pellets, briquettes, and biochar are made from this old palm oil trunk biomass waste. Old palm oil trunks, which are often left abandoned on land, should be utilized to create these useful, value-added products.

For a presentation on palm oil replanting, click here.