Not Only Reduce Steam Cost, but Also Reduce Water Treatment Cost for Boiler Feed Water and Even Also Increase Revenue with EFB Cogeneration

Even though biomass waste is abundant in palm oil mills, the use of efficient boilers is also needed. Efficient use of biomass waste according to the type/specifications will also provide additional benefits for palm oil mills. The longer the biomass waste, the more diverse its uses, ideally even zero waste. Apart from mesocarp fiber which is usually used 100% and added with a number of palm kernel shells (PKS) and sometimes also a few empty palm fruit bunches (EFB), an efficient boiler will optimize the type and amount of biomass. For example, PKS as a commodity that can be sold are used as little as possible for boiler fuel, so that more can be sold which increases the profits of the palm oil mill.

Photo taken from here

Is a utility business like buying steam from another company needed? Utility businesses like selling steam, heat, or electricity are indeed starting to emerge; for more details, read here. Certain companies are greatly helped and receive utility products according to their wishes. They do not want the hassle of operating a boiler, including sourcing its fuel. However, for palm oil mills that in their operations produce a lot of biomass waste that can be used as fuel, it is more practical and efficient to operate their own boiler. And this has been a common practice in palm oil mills for a long time. Therefore, cooperating with a utility company to obtain steam and electricity is not an effective solution. The effective solution is the use of an efficient boiler as explained above.

Apart from that, regarding boiler feed water to increase efficiency or reduce costs and be environmentally friendly, AOP (Advanced Oxidation Process) technology, namely an electrochemical device, is used. With this method, apart from not using chemicals so it is environmentally friendly, it will also increase the service life of the RO (reverse osmosis) membrane which is the heart of the water treatment unit. Not only will the RO membrane have a longer service life, but also the activated carbon filter and ion exchange resin, which are stages of water treatment. Apart from being environmentally friendly, this technology is also more in line with the sustainability mission.

And regarding boiler operations, even to increase the volume of PKS that can be sold, cogeneration of empty palm fruit bunches (EFB) can be carried out. In this way, the EFB, which have been waste biomass which pollutes the environment and which most palm oil mills have not yet processed, are then burned to produce heat and potassium ash. The potassium content above 30% in the ash will make quality fertilizer that can be sold or used in your own plantation. Meanwhile, the heat from burning EFB is used as additional energy for the boiler (cogeneration). In this way, 100% of PKS can be sold and even exported.

If the use of PKS for boiler fuel reaches 50% then using this technology means that 50% of the  PKS can be recovered or taken back or 100% of the PKS can be sold or even exported. For example, a palm oil mill under normal conditions can sell 2,000 tons of PKS/month, then by using this technology the palm oil mill can sell 4,000 tons of PKS/month. Of course the increase in PKS supply volume is very significant to increase income, for more details read here. 

PKS (Palm Kernel Shell) Export Business and New Varieties of Superior Palm Oil Seeds

PKS loading for export

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. 

Buy Wood Pellets or PKS (Palm Kernel Shell)?

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.
 

Will PKS for Export Disappear from Circulation and be Replaced by Wood Pellet?

 The need for palm kernel shell (PKS) is increasing due to the increasing need, especially for the export market, making the price even more expensive, even matching the price of wood pellets. Nearly all of the biomass plants in Japan have experienced delays in their operations, now come online for more details can be read here. This has led to an increase in the price of the PKS.

Palm kernel shell (PKS) is a biomass fuel that is the main competitor for wood pellets, because the quality or specifications have many similarities. Previously, PKS were always cheaper than wood pellets, even in the international market some time ago the price of PKS was only about half the price of wood pellets. But currently the price of PKS equals even slightly above wood pellets. This of course will make users switch to wood pellets because of better quality such as lower moisture content, higher calorific value, uniform size and shape, and generally lower ash content.

When users flock change to wood pellets, the PKS commodity for export will get smaller in portions and even disappear altogether. Moreover, wood pellets from Vietnam and Russia are known to be cheap with large capacities. Vietnam is even the largest producer of wood pellets in Asia with a production of more than 1 million tons / year. Of course, this condition is very sad for exporters who have been doing business by exporting the PKS. The high tax and levy in Indonesia make it more difficult for exporters in Indonesia, whereas in Malaysia they do not exist. The most important thing that must be done is to be able to maintain the price of the export PKS so that the PKS is still worth it with its quality. It is not easy, of course.