Palm Oil Biomass Based EcoIndustrial Cluster in Indonesia

Case Study of Siak Hulu, Kampar, Riau Province

Prof. Tjandra Setiadi, Ph.D. Faculty of Industrial Technology, ITB Bandung, Indonesia tjandra@che.itb.ac.id
Tjandra 1

Country Profile - Indonesia

Area : 1,904,000 km2 Population : 222.20 millions Growth rate : 1.34% GDP per capita : USD 1,946 (2008)
Largest Crude Palm Oil (CPO) producer in the world since 2006

Major Environmental Concerns Water Surface water pollution due to improper management of industrial waste, agriculture, mining & domestic waste water Energy Depending on fossil energy Air and atmosphere Air pollution due to emissions in big cities exceeds the standards Land and forest Illegal logging and land conversion Coastal and marine Unhealthy Exploitation practices
Tjandra 2

45.5 % of the worlds CPO are from Indonesia

Industrial Development in Indonesia

Major Foreign Direct Investment (FDI): Asia from Malaysia (16%), Singapore (12.3%), Korea (4.9%), & Japan (2.7%) and since 2004, presently Chinese companies shows interest. European investment approvals from the United Kingdom (6.5%) and Switzerland (2.6%) FDI by sector : Agriculture, forestry, and fishery (5.6%); Mining (1.9%); Manufacturing (54.5%); Electricity, gas, and water (8.9%); Construction (15.2%); Services (13.9%)
Tjandra 3

Foreign Direct Investment in Indonesia

70 60 % of Total 50 40 30 20 10 0 Europe America Asia Australia Region Africa Other
2005 2006 2002 2003 2004

Top 10 Industries
Food and beverages Sea product processing Textile and textile products Footwear Palm oil Wood Rubber and Rubber Goods Pulp and paper Electrical machinery and electrical tools Petrochemical
Other

40 35 30
% of Total

2002 2005

2003 2006

2004

25 20 15 10 5 0
Japan Malaysia China Chinese Taipei Korea, Rep. of Hong Kong, China Philippines Singapore Thailand India Saudi Arabia

Country

Tjandra 4

Area and CPO Production

20 18 16

Area (Millions Ha) CPO (ton)

Value (Millions)

14 12 10 8 6 4 2 0 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007

Year

Crude Palm Oil (CPO) Production in Indonesia Production (Millions ton)

12.0 10.0 8.0 6.0 4.0 2.0 0.0 Sumatera Java Bali and Nusa Tenggara Kalimantan Maluku and Papua
2003 2004 2005

Islands

Tjandra 5

Palm Plantation Area in Sumatera by Province Area (Millions Ha)

1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 Nanggroe North West Aceh Sumatera Sumatra Riau Jambi South Bangka Bengkulu Lampung Sumatera Belitung

2003 2004 2005

Province
Crude Palm Oil (CPO) Production in Sumatera by Province Production (Millions ton)
3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Nanggroe North West Aceh Sumatera Sumatra Riau Jambi South Bangka Bengkulu Lampung Sumatera Belitung 2003 2004 2005

Tjandra 6

Province

STUDY AREA

Tjandra 7

STUDY AREA
1. 2. 3. 4. 5. 6. PT Multi Palma Sejahtera POM (45 t FFB/h) non plantation PT Sinar Agro Raya POM (45 t FFB/h) non plantation PT Inti Indo Sawit Subur Buatan I (60 t FFB/h) PT Sinar Siak Dian Permai POM (90 t FFB/h) PT Meridan Sejati Surya POM (45 FFB/h) PTPN V Sei Pagar (30 t FFB/h)

Palm oil mill Biodiesel plant Biomass power plant

5
Km22

6 4
Km40 Km50

3
Km60

Km25 Km34

Riau Siak Hulu Cluster

0 mi

10

Tjandra 8

Study Area : Plantation

Paddy, cassava, corn, sweet potato are main product of agriculture Plantation : Palm oil (70.43%), Rubber (26.9%) Riau is the largest palm oil plantation in Indonesia Planted area : ~1,400,000 ha Mature area : ~ 1,100,000 ha Palm Oil Production : ~ 3,100,000 Ton (max) Number of Palm Oil Mill : 126 units
2000000 Plantation Area (ha) 1600000 1200000 800000 400000 0 Rubber Coconut Palm oil Crops Coffee Sago palm

Palm oil plantation compared with other crops in Riau Province

Tjandra 9

Social Data
Population in Kampar by Year

RIAU PROVINCE
Population

600000

Population : 4 764 205 people Average birth Rate: 2.7 % per year Average Density : 54,64 people /km2

560000

520000

480000

Population in Kampar by sub-district

80000 70000 60000 50000 40000 30000 20000 10000 XIII Koto Kampar 0 Kampar Kiri Hulu Gunung Sahilan Kampar Kiri Hilir Kampar Kiri Tengah Kampar Kiri Rumbio Jaya Bangkinang Seberang Bangkinang Barat Kampar Utara Tapung Hulu Tapung Hilir Bangkinang Tambang

2003

2004

2005

2006

Year

Population

Siak Hulu

Salo

Tapung

Sub-district

Tjandra 10

Perhentian Raja

Kampar

Kampar Timur

Waste from Palm Oil Activities

Tjandra 11

Plantation

FFB

POM

Oil palm trunk

Oil palm frond

EFB Waste POME

root
Palm kernel shell
FFB-Fresh Fruit Bunches POM Palm Oil Mill EFB Empty Fruit Bunches

Biomass waste
Tjandra 12

BIOMASS UTILIZATION IN PALM OIL MILL

EFB

Tjandra 13

Baseline of Waste Management Practices in POMs

In the palm oil value chain in the area, there is an overall surplus of waste and the utilization rate of these wastes are relatively low, especially in the case for POME and EFB. Generation of other mill wastes can be reduced significantly by adopting cleaner production concepts. The field residues like EFB are currently disposed as mulch or utilized as fertilizer. Wastes from the palm oil industry lead to severe environmental problems in future and should be utilized as resources to develop a bio-economy and market the carbon neutral products. Biomass Utilization: Fibre and kernel shells are used to produce steam and electricity for the boiler. The boiler ash and EFB are used in plantation. Liquid waste is digested in open lagoon and thereafter is sent to plantation for land application as fertilizer at a BOD of between 1,000 to 3,500 ppm.
Tjandra 14

Potential Environmental Impacts

Solid waste The utilization is still in a little amount, and the rest is disposed on plantations Liquid waste Contribute to surface and ground water pollution, Green House Gasses (GHGs), bad odor Conversion of forest to palm plantations decrease the area of primary forest However illegal logging and illegal mining are the major causes of the deforestation

Tjandra 15

Possible Uses

Palm Oil Value Chain

EFB incineration fertilizer mulch or Excess PKS combustion with the other POM solid wastes The recovered remnant oil supplement for CPO production or used to produce bio-diesel
Crude Palm Oil Extraction Crude Palm Oil Refining Process

Biogas from POME existing energy system or for electricity generation Dewatered EFB heat and/or electricity or organic diesel
Palm Plantation Fresh Fruit Bunches

Excess Empty Remnant Liquid Waste Excess Empty Remnant Liquid Waste Oil Palm Oil Palm Palm Oil Palm Kernel Oil from Root Oil Palm Oil Palm Fruit Palm Oil Palm Kernel Oil from Root Frond Fruit Trunk Frond Trunk Bunches Mill Effluent Shells EFB Mill Effluent Shells Bunches EFB
Tjandra 16

POTENTIAL SOURCES OF RAW MATERIAL IN SIAK HULU

No 1 2 3 4 5 6 Indo Sawit Sinar Agro Multi Palma Sejahtera Sinar Siak Dian Permai Sei Pagar PTPN V Meridan Sejati Surya Total Palm Oil Mill FFB, ton/year 210,000 150,000 150,000 250,000 150,000 150,000 1,530,000

CPO Solid waste EFB PKS MF Liquid waste POME

Tjandra 17

: 336,600 ton/year : 351,900 ton/year : 91,800 ton/year : 198,900 ton/year : 918,000 ton/year

The Possible Eco-Industrial Cluster

RURAL AREA
CPO & DERIVATIVES

POM

Power generation

LOCAL DEMAND & EXPORT

Industrial & economic DEVELOPMENT

Value added products

Biomass waste
Tjandra 18

UTILIZATION OF WASTE

Urban area

1. Job Opportunities

Potential Socio-Economic Impacts

Creates the need biomass delivery services (transportation & biomass suplai chain) Raw material strategies: Supply of EFB from several POMs in the Kampar District The dewatered EFB intended for the incinerator in the POMs will be sent to central biomass power plant that can efficiently convert the energy from biomass into heat and power 2. Local Business Opportunities Conversion of biomass residues in value added products, such as: Gasification of palm kernel shells (PKS) to produce electricity Composting of EFB, OPF to produce fertilizers Trunk utilization to produce fibre board OPF (oil palm fronds): as an animal feed MF (mesocarp fibre): to produce fibre board.
Tjandra 19

Provide support to the plant such as repair and maintenance the machines

Potential Socio-Economic Impacts

3. Clean & renewable Energy Enhance the living standard in rural community Generate related benefits and economic activities 4. Reduction in Energy Cost 5. Poverty Eradication The big gap of education level and infrastructure income is well not-spread in Riau province 6. Increase of Electricity Supply Coverage distribution

Most of the rural inhabitants or households are using kerosene pressure lantern as their source of lighting.

Tjandra 20

SWOP-Analysis
Strengths
Availability of biomass waste as raw material for power generation Several Palm Oil Mill industries Government Policies on renewable energy

Opportunities
Create working opportunities Prevent the urbanization Spread-out the development Reduce the pollution through biomass power generation Reduce the dependability to fossil fuel

Weaknesses
Lack of awareness on technologies to recover the agricultural resources Low investment on utilization of palm oil biomass waste Migration to the cities at Riau (Pekanbaru and Dumai)

Potentials
Decentralized a power generation systems Community participation in local natural resources management Create several value added products from palm oil biomass waste Organic farming from biomass ash

Tjandra 21

Conclusions
Palm oil plantation and palm oil mills clusters are already exist The clusters are located in the rural setting. In this cluster, significant amount of biomass waste generated and disposed leading to environment and local health issue. Introduction of new technologies, cluster management system, market orientation are essential for a successful transformation of these biomass waste.

Hence, acceleration for transformation of a region into a eco-cluster is possible with technology innovation
Tjandra 22

Tjandra 23