At a recent conference on oil palm biomass, one of the presenters brought up the story of the mythical Lost City of El Dorado in the Amazon, reputedly a place with untold gold riches. Many treasure hunters had tried to locate it, but unsuccessfully. They found something else though – naturally occurring biochar.
Plantation Industries and Commodities Deputy Minister Datuk Hamzah Zainudin, who officiated at the conference, notes that last year, an estimated 80 million tonnes (dry weight) of oil palm biomass was produced. In addition, about 54 million tonnes of palm oil mill effluent (POME) – which is mainly water but contains a substantial amount of biomass solids – was generated.
“The Government launched the National Biomass Strategy in November 2011 focusing on oil palm biomass as a starting point. The implementation of the strategy is expected to generate a gross national income of RM30bil and create about 67,000 incremental jobs by 2020,” he says.
Essentially residues from the cultivation and processing of crops such as oil palm, biomass was once considered waste and posed a disposal problem. Now, however, it is in demand as various uses have been found for the material. It is worthwhile to note that only 10% from what comes out of an oil palm plantation is palm oil; the rest of it is biomass. The main types of biomass from the oil palm sector are palm fronds and trunks, empty fruit bunches and palm kernel shells. Palm oil mill effluent is also being looked at as a useful biomass now.
Oil palm biomass has long been used as mulch in plantations to fertilise the soil, and as boiler fuel in mills. An emerging trend is the conversion of the biomass into solid, liquid and gaseous biofuels, medium-density fibreboards, plywood, fibre mats, biochar, activated carbon, and biochemicals like sugars/cellulose, lignin, Vitamin E, carotenes, squalene and so on.
Also, practices are underway to reduce the industry’s carbon footprint. Hamzah says there are 55 completed biogas plants, 16 under construction and another 150 being planned. He says that by 2020, all palm oil mills must have methane trapping facilities. There are also plans to have the biomass and biogas plants that generate electricity, connected to the national grid. Right now, four biomass and two biogas plants with a total capacity of 43 megawatts are feeding the grid.
Additionally, MPOB has set up a pilot plant to produce palm biodiesel, with a production capacity of 3,000 tonnes a year. Currently, 5% of palm biodiesel is blended into commercially sold diesel in the central region of Peninsular Malaysia. This will be extended nationwide in phases with full coverage by July 2014.
There is also technology to deal with pollution from POME. The sludge has long been dried and used as filler for fertiliser, but this creates a low-value product.
“Now, the discussion is on how to add value to the POME extraction,” says Global Green Synergy director Dr Lam Hon Loong. “My research team is proposing the ‘eco-drying-pyrolysis’ method to extract the energy and chemical content in POME.”
What is exciting the biomass sector is the big bucks potential of biochemicals which can be extracted from oil palm residues. Lam, quoting from the Journal Of Palm Research, throws out a figure of RM1,250 per tonne of (dry) biomass input for lower grade biochemicals and RM1,280 to RM2,490 per tonne for the higher level biochemicals. In comparison, oil palm biomass that is turned into fertiliser yields only RM78 per tonne.
EU-Malaysia Biomass Sustainable Production Initiative technical coach Tang Kok Mun estimates that each tonne of empty fruit bunches can generate RM630 worth of carboxy methylcellulose (an additive in detergent, paper and pharmaceuticals) and RM612 of biosugars. Figures differ but there is certainly enough economic potential to generate interest, with the European Union countries showing their keenness.
However, there are some issues to sort through first. The main obstacle is the erratic supply of oil palm biomass, which gives rise to price instability. The logistical nightmare of plantations and mills being located mainly in interior areas, which raises costs, is one of the worries with regards to supply.
“This uncertainty has been a major impediment to companies which are contemplating investment in biomass products. To address this issue, joint-ventures with biomass producers, namely the large plantation companies, have emerged and this should resolve the security of supply problem for such specific projects,” notes an optimistic Hamzah.
One such collaboration is MYBiomass Sdn Bhd, a joint-venture between government agency MIGHT (Malaysian Industry-Government Group for High Technology), Sime Darby and Felda. The joint-venture vehicle will act as an aggregator – a collection centre for biomass generated by the partners’ plantations and mills. It will set up plants to process the biomass into various products. To produce biochemicals and biofuels, it will collaborate with partners in the chemical, food, pharmaceutical and fuel industries.
MYBiomass chairman Mohd Yusoff Sulaiman says the first commercial-scale biofuel refinery will be built by the second quarter of next year, with production starting a year later. He says a pilot plant in Italy is already testing the biofuel technology, to save the cost of building one here. The first biorefinery is targeted to produce 60,000 tonnes; this will require about 320,000 tonnes of feedstock. Current estimates, says Mohd Yusoff, show that biomass sourced from Sime Darby and Felda plantations and mills will be sufficient to match the requirements of the biorefinery.
Several conference participants, however, express concern that the presence of big players will jeopardise the position of small and medium enterprises (SME) which are already having problems with long-term supplies of oil palm biomass.
“Firstly, the price of raw biomass is currently subjected to demand and supply forces. For palm biomass such as empty fruit bunches, the increasing demand for the material has resulted in the owners of this resource (mill owners) holding on to stocks with the expectation that the price will go up. These owners, therefore, are not willing to sign long-term supply contracts with SMEs,” says Tang.
He adds that when the SMEs apply for financing from banks, the latter will see the absence of this supply contract as a risk to the venture.
He also says the majority of mills are owned by corporations which generally do not sell their biomass materials; they either use them within their own plantations (such as mulching fertiliser) or start their own biomass ventures. So, says Tang, the only access to biomass that SMEs have is through private mills – mills that do not own plantations and hence, buy palm fruits from smallholders.
“What is urgently needed is a way for the supply and pricing of biomass to be made transparent, so as to remove uncertainties. That is why I call on the Government, via MPOB, to track and monitor biomass supplies and publish the information just like what they do for palm oil and palm kernels,” says Tang.
Mohd Yusoff, on the other hand, disagrees that enterprises such as MYBiomass will get a monopoly over biomass supplies, pointing out that biomass prices are dictated by market forces and there is no single jurisdiction governing it.
“On the contrary, the business activity of MYBiomass will have spill-over effects for the SMEs in terms of collection, fabrication and maintenance of machinery, and as solution providers. And the biomass for the joint-venture will be locally sourced and not done nationwide.”
Tussle for biomass
The other conundrum is the conflicting usage demand for oil palm biomass due to the multitude of uses. As Tang points out, plantation owners who want the material to fertilise the soil are reluctant to release it for other uses. There is talk of a compromise, with plantations retaining 50% of their stocks and releasing the rest for other users. But there are strong objections and at the end of the conference, it seems that a 30% allocation for external usage is a more workable figure.
However, this was not inked on paper. Such a reduction means that current estimates of oil palm biomass stocks will have to be toned down considerably. So too the projections on its economic value.
Mohd Yusoff has given global economic value estimates for the various stages of the utilisation of oil palm biomass: RM46.8bil from raw biomass which includes its usage as mulch and compost; RM93.6bil from biomass aggregation; RM277.7bil from biomass production; RM31.2bil from biorefining process; RM249.6bil from biorefining fuels; and RM218.4bil from biorefining chemicals. Even if these are reduced by 70% because of unavailable biomass stocks, the economic potential will still be huge.
Global Green Synergy’s Lam recounts his experience with a European businessman sourcing for feedstock for bio-ester production: “He wanted five million tonnes per year to be supplied. Can we even supply that now? And this is for just one very specific usage. I predict that in less than five years, biomass supplies will not be sufficient. This will limit the development of the biomass industry.
“The only way to overcome this problem is, we have to become the leader in this new industry so that most of the investments will focus on Malaysia, including sending biomass (from elsewhere) to Malaysia for high-tech processes,” reasons Lam.
The MYBiomass initiative appears to fill that niche. Mohd Yusoff is confident that Malaysia has the capacity to cater to the demand. He says biomass stocks will be higher if other sources aside from oil palm are taken into account.
Conference participants also query the setting of standards for the production of the value-added products and having proper certification, especially if the goods are for the export market. Both Dr Lam and Mohd Yusoff see the Government, MPOB and SIRIM (Standards and Industrial Research Institute of Malaysia, playing a role in that.
“As a business entity, MYBiomass will work together with the relevant ministries, agencies and research institutions such as MPOB and Sirim to come up with the standards and certification to support the industry. These are important parameters for feedstocks, processes and products. This will also include manufacturing and environmental standards,” notes Mohd Yusoff.
MPOB is moving ahead with research and development, including collaborating with foreign companies. It has an agreement with Dongwha in South Korea to look at commercialisation of medium-density fibreboard using biomass. A memorandum of understanding was signed with Japanese company Nippon Palm at the opening day of the conference.
The opening day also saw the launch of a worldwide first, a local entity called Waris Nove which uses oil palm fibre to produce carboxy methylcellulose. With such a multitude of uses for oil palm biomass, might there be a scenario in future where the value of the crop itself is overtaken by products made from its waste?