The Use of Palm Oil As Biofuel and Biodiesel

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Palm oil, like other vegetable oils, can be used to create biodiesel for internal combustion engines. It can be either a simple high quality processed palm oil mixed with petro-diesel, or processed through transesterification to create a palm oil-methyl ester blend which meets the international EN 14214 specification. Biodiesel can be used in any diesel engine when mixed with petro diesel. The majority of vehicle manufacturers limit their recommendations to 15% biodiesel blended with petro diesel.Biodiesel is the most common biofuel in Europe.

Due to the increasing global urgency to reduce dependence on fossil fuels, palm oil biomass offers great potential as a cost-effective feedstock for biodiesel. In this capacity, it is capable of reducing carbon dioxide emissions by more than 80%.

R & D have demonstrated that palm diesel is a cleaner energy than fossil diesel, emitting less carbon dioxide, black smoke of carbon particulates, carbon monoxide and sulphur dioxide. Fuel switch from fossil to palm diesel is easy and economical as palm diesel can be used directly in unmodified diesel engines including stationary engines, passenger cars, buses and trucks. It gives good engine performance.

The palm biodiesel can be used neat or blended with petroleum diesel in any proportions. Recently, to overcome the long standing pour point problem, (pour point = 15°C), Malaysia Palm Oil Board ( MPOB ) has developed a process to produce low pour point palm biodiesel (-21°C to 0°C) which is suitable for temperate countries.There are constraints when palm oil is used as feedstock for biodiesel. As palm oil constitutes 80% to 90% of the biodiesel production cost, price fluctuations play a decisive role in the biodiesel vs. fossil fuel diesel competition. Price is very much affected by the ever increasing demands from overseas, crude oil price and climate variations.

Demand for vegetable oils is expected to increase by three million tonnes to 21mt due to increasing need from the global biodiesel industry. It is the second most productive vegetable oil producing crop in the world, after algae. Palm oil is also a primary substitute for rapeseed oil in Europe in the biodiesel production. Palm oil producers in Malaysia are currently undergoing frequent corporate activities to streamline the biodiesel industry to handle the high production costs due to increased feedstock prices.

Palm biodiesel will be attractive if the palm oil price stays below US$450 per tonne (US$554 at Mar 2009 ) and crude oil prices stay above the US$70 per barrel (US$45 at Mar 2009). While crude oil prices have fallen significantly by year end 2008, prices of palm oil resistfurther downturn, making biodiesel production unprofitable for widespread use. However on a long term basis, with the ever depleting fossil fuel supply, biofuel will become increasingly viable.

Another hurdle facing the Malaysia and Indonesia is meeting the requirements by EU, one of the major users, that carbon dioxide emissions from biodiesel must be 35% less than that from crude oil.

The European Commission in mid 2008, proposed a revision to its earlier goal of generating 20% of energy from renewable sources by 2020, that the 20% of renewable transport fuels would have to come from feed stocks, like algae of other non-food cropssuch as switch grass, jatropha, Chinese tallow or cereals that bear little grain, that do not compete with food for cropland; instead of oil palm, rapeseed, corn or maize.

Only 10% of the palm yields palm oil (from mesocarp or fleshy part of the fruits) and palm kernel oil (from seed in the fruit). Both have significant commercial value. The economics of the palm diesel project can be enhanced by the recovery of useful co-products such as carotenes, vitamin E, sterols, squalene, co-enzyme Q, phospholipids and glycerol derivatives.

The remaining 90% of biomass, consisting of empty fruit bunches (EFB), fibers, fronds, trunks, kernels and mill effluent was previously dispose of as waste, burned or left to settle in waste ponds. This undesirable disposal emits carbon dioxide and methane contributing to global warming.

Types and amounts of these biomass generated in year 2005:

Biomass

Quantity mt

Moisture Content %

Calorie kJ/kg

Main Use

Fiber

9.66

37.00

19068

Fuel

Shell

5.20

12.00

20108

Fuel

EFB

17.08

67.00

18838

Mulch

PKC (Palm Kernel Cake)

2.11

3.00

18900

Animal feed

The processing of oil palm products occurs in palm kernel crushing factories, oleo-chemical plants, and palm oil refineries, but by far the most common are the basic palm oil mills. These mills form the fundamental operational units of oil palm industry. Most of the oil palm biomass are used within mill as fuels. They are burnt in boiler to produce steam for electricity generation to run internal operations. Since 90% of the palm consists of biomass, palm oil mills have the potential of contributing very significantly to the reduction in greenhouse gas through expanded production of biofuels and biomass based generation of power.

For use as fuel outside milling, EFB and PKC are compacted into uniform solid fuel called briquette. It has higher energy content with less moisture, and is exported for cooking purposes. Briquettes are not consumed by locals for cooking purposes as cheaper substitutes are available.

The rosier outlook lies in its future utilization as feedstock for second generation biofuel, where the entire waste biomass can be harnessed in the production of renewable energy, cellulosic ethanol, biogas, biohydrogen and bioplastic.

This energy is not only cheaper but also more efficient and environment-friendly than fossil fuels. The carbon credits derived under the CDM Kyoto Protocol increase the economic viability of palm diesel as a renewable fuel.

According to the UNEP - Year End (2008) Snapshot of the CDM, Malaysia secures 145 out of 4237 projects, representing 3.5% of the total, and ranking 5th in securing the number of CDM projects.

Country

CDM registered or in the pipeline 2008

China

1557

India

1135

Brazil

330

Mexico

200

Malaysia

145

Indonesia

100

Chile

60

Middle East

54

E. Europe/ C. Asia

42

Some of these CDM projects include renewable energy projects, hydro and biomass from oil palm industry. Currently, only 20 out of 406 palm oil mills nationwide are involved in CDM-related projects. There is huge CDM potential awaiting to be explored.

As Malaysia is the world’s largest exporter of palm oil, it produces some massive 168 million tons of palm oil biomass annually, the equivalent of about 330 million barrels of oil. Palm oil biomass offers  great opportunities to be Clean Development Mechanism projects under the Kyoto Protocol. If this potential is fully tapped, the future promise will be far and wide for Malaysia and for our climate.

By December 2008, 14 biodiesel plants have been established with total annual biodiesel installed capacity of 1.7 million tonnes, with additional four waiting to commence production. The production of biodiesel rose by 32% to 171,700 tonnes in 2008, compared to 129,715 tonnes 2007.  Exports of biodiesel increased by 91.7% to 0.18 million tonnes in 2008 against 0.09 million tonnes recorded in 2007. USA was the largest biodiesel importer from  Malaysia, accounting for 71,324 tonnes or 39.2% of total biodiesel exports, followed by the EU with 70,273 tonnes or 38.6%.

In Malaysia, biodiesel is an emerging industry, encouraged under the new five-fuel diversification policy, with deliberate inclusion of renewable energy as the fifth fuel.

Scientists studied activities at palm plantations in Indonesia and Malaysia discovered extensive deforestation and excessive use of chemical fertilizers due to increase in demand for palm oil. This has caused concerns among importers of palm oil from EU countries, and they view it necessary to review the role of palm oil in renewable energy generation.

Palm oil export to the EU will thus be caught in a Catch 22 dilemma, encountering unfavorable targeting from  hastily shaped and rigorous sustainability standards in the EU, aimed specifically to shrink the import of palm oil into Europe and price competitiveness. To adhere to these requirements, oil palm plantation players need to pay extra costs for Roundtable on Sustainable Palm Oil ( RSPO ) certification. For example, in Malaysia, planters fork out around US$3 - US$8 per tonne of crude palm oil for certification. Despite this, the recent demand for certified palm oil has slowed down due to lesser demand in times of global economic downturn ( late 2008 - early 2009), and preference for a cheaper alternative of non certified palm oil for the food and oleo chemical industries.

Those who are more prepared to pay higher premium for RSPO certified are bioenergy related companies and power generation plants, as they can offset part of the premium with the carbon credits. WWF, one of RSPO's initiators, will assess the world's major palm oil purchasers, highlighting supporters of sustainable palm oil and exposing those who do not comply.

Meanwhile, Indonesia and Malaysia have to recognize that the path to the large and growing EU market may prove a tougher challenge in the coming years, as they take additional initiatives to ensure stricter compliance in sustainable cultivation of oil palm.

References and related news:

Bullish Outlook for M'sia's Palm Oil: Dailyexpress.com April 08, 2005Palm Oil Headquaters.comIndonesia Palm Oil: Pecad.fas.usda.gov - 2007Biofuel from Palm Oil: MPOB.gov.myMalaysian Generating Renewable Eenery from Palm Oil Waste: UNDP.org