Converting Waste Oil Palm Trees Into a Resource R O G R a M M E P N V I R O N M E N T E
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w w w . u n ep. o r g United Nations Environment Programme P.O. Box 30552 Nairobi, 00100 Kenya Tel: (254 20) 7621234 Fax: (254 20) 7623927 E-mail: [email protected] web: www.unep.org CONVERTING WASTE OIL PALM TREES INTO A ESOURCE R ROGRAMME P NVIRONMENT E ATIONS N NITED U Copyright © United Nations Environment Programme, 2012 This publication may be reproduced in whole or in part and in any form for educa- tional or non-profit purposes without special permission from the copyright holder, provided acknowledgement of the source is made. UNEP would appreciate receiv- ing a copy of any publication that uses this publication as a source. No use of this publication may be made for resale or for any other commercial purpose whatsoever without prior permission in writing from the United Nations Environment Programme. Disclaimer The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the United Na- tions Environment Programme concerning the legal status of any country, territory, city or area or of its authorities, or concerning delimitation of its frontiers or boundar- ies. Moreover, the views expressed do not necessarily represent the decision or the stated policy of the United Nations Environment Programme, nor does citing of trade names or commercial processes constitute endorsement. Acknowledgement This document was developed by a team led by Dr. Wan Asma Ibrahim Head of Bioen- ergy Programme, Forest Products Division, Forest Research Institute Malaysia (FRIM) under the overall guidance and supervision of Surya Prakash Chandak, Senior Pro- gramme Officer, International Environmental Technology Centre, Division of Technol- ogy, Industry & Economics, United Nations Environment Programme. Converting Waste Oil Palm Trees into a Resource Compiled by United Nations Environment Programme Division of Technology, Industry and Economics International Environmental Technology Centre Osaka, Japan Table of Contents Contents Page Title 1 Table of Contents 4 List of Figures 9 List of Tables 11 List of Appendices 13 List of Acronyms 15 Executive Summary 17 1. Chapter 1: Characterization and quantification of waste oil palm trees in 19-59 Malaysia 1.1 Introduction 19 1.1.1 Background 19 1.1.2 Scope and objectives 20 1.2 Characterization of waste oil palm trees (WPT) 20 1.2.1 Characterization of waste oil palm trees 20 1.2.2 Chemical composition from proximate analysis of WPT 22 1.2.3 Macro nutrient contents 24 1.2.4 Elemental analysis of carbon, hydrogen, oxygen, nitrogen and 25 sulphur 1.3 Quantification of waste oil palm trees 25 1.3.1 Total oil palm plantation area 25 1.3.2 Area of potential WPT available in years 2011 – 2032 30 1.3.3 Frond availability from WPT 34 1.3.4 Potential chemical and macro nutrients available in WPT 35 1.3.5 Case study on actual locality and quantification of WPT 37 1.3.6 Feedback from oil palm plantation companies 37 1.3.7 Size of oil palm plantations 37 1.3.8 Age category of oil palm trees 38 1.3.9 Number of trees per hectare 40 1.3.10 Area of actual felling programmes from years 2010 to 2031 40 1.4 Conclusion 43 References 44 Appendices 45 2. Chapter 2: Assessment of current waste oil palm tree management 60-76 systems, practices and utilization at national and local levels 2.1 Introduction 60 4 2.1.1 Background 60 2.1.2 Scope and objectives 62 2.2 Waste oil palm tree management systems 62 2.2.1 Introduction 62 2.2.2 Implementation of zero burning replanting techniques in Malaysia 63 Drawbacks of earlier zero burning methods 64 Newer zero burning methods 65 Limitations of newer zero burning methods 66 2.3 Waste oil palm tree utilization 67 2.3.1 Methods of harvesting WPT/oil palm trunks (OPT) for value-added 67 products Chain sawing 68 Bulldozing 68 Bucking 68 Skidding 69 Loading and transporting 69 2.4 Utilization of WPT 69 2.4.1 WPT for value-added products 69 2.4.2 WPT for energy 70 2.5 Conclusion 71 References 72 Appendix 2: Machines used for WPT disposal 73 3. Chapter 3: Identification, assessment and selection of environmentally 77-145 sound technologies (ESTs) for converting waste oil palm trees into material or energy 3.1 Introduction 77 3.1.1 Background 77 3.1.2 Objectives 77 3.2 Potential products and renewable energy/fuel from WPT 78 3.2.1 Products from WPT 79 3.2.2 Commercialized products 80 Plywood 80 OPT lumber products 82 Flooring 84 Animal feed 85 3.2.3 Products at pilot scale 86 Oil palm sap 86 5 Cellulose from OPF 89 3.2.4 Products at the research and development stage 90 Particle board 91 Renewable energy/fuel 92 3.2.5 Commercialized energy/fuels from WPT 93 3.2.6 Pilot scale study of energy/fuels from WPT 93 3.2.7 Energy/fuels at research and development stage 93 3.2.8 Other possible products from WPT 94 Compost 94 Laminated veneer lumber (LVL) 95 3.3 Assessment of environmentally sound technology (EST) for 96 conversion of WPT into resources 3.3.1 Assessment of technology 96 3.3.2 Assessment on environmental impact 98 Estimation of GHG (CO ) emissions from decomposition of 2 98 WPT Estimation of carbon sequestered from WPT conversion into value added products and renewable energy from 50% of WPT 99 annual availability Estimation of CO2 emissions reduction based on the current WPT utilization for the conversion into value-added products in 103 Malaysia 3.3.3 Assessment of environmentally sound technology (EST) for WPT 103 conversion into material/resources Recommendation of EST: Scenario 1 105 Recommendation: Scenario 2 – centralized facilities 108 3.4 Conclusion and recommendations 108 References 110 Appendices 113 4. Chapter 4: Report of UNEP workshop on converting waste oil 146-160 palm trees into a resource 4.1 Introduction 146 4.2 Plenary sessions 147 4.2.1 Session I: Project briefing 147 Report 1 147 Report 2 148 Report 3 148 4.2.2 Session II: Panel discussion 149 4.3 Conclusion 150 6 Appendices 151 5. Chapter 5: Report of techno-economic feasibility study of 161-189 using waste oil palm trees for generating renewable energy 5.1 Introduction 161 5.2 Technical feasibility 163 5.2.1 Scope 163 Proposed capacity 163 Location 163 Production capacity 164 Raw materials 164 5.2.2 Process 165 Bioethanol production process 165 Fuel pellet production process 166 5.2.3 Land requirements 167 5.2.4 Equipment & machinery 169 5.2.5 Utilities 170 5.2.6 Staff & labour requirements 171 5.2.7 Environmental & safety aspects 171 Safety hazards 171 Safety protective equipment & environment 174 5.3 Economic viability 174 5.3.1 Introduction 174 5.3.2 Fixed investment 175 5.3.3 Operating costs 176 5.3.4 Profit and loss statement 178 5.3.5 Profitability and projection 178 5.3.6 Investment decisions 180 5.3.7 Break-even point 181 5.3.8 Gross profit margin 183 5.3.9 Sensitivity analysis 184 5.4 Conclusion 186 5.4.1 Recommendations 186 Appendices 187 6. Chapter 6: Business proposal for converting waste oil palm 190-200 trees into renewable energy 6.1 Summary 190 6.2 Market outlook 190 7 6.2.1 Market demand 190 6.2.2 Market size 191 6.2.3 Market survey 191 6.2.4 Target market 191 6.2.5 S.W.O.T. analysis 192 6.2.6 Growth potential and future plan 193 6.3 Financial analysis 193 6.3.1 Profitability & projection 193 6.3.2 Source of funding 194 6.3.3 Cash flow for 15 years 194 6.3.4 Return on investment 200 6.4 Conclusion 200 8 List of Figures 1.2.1 Components of an oil palm tree 21 1.3.1.1 Distribution of oil palm plantation area based on year planted (1975-2008) 26 1.3.1.2 Oil palm area available based on ownership category (ha) 27 1.3.1.3 Malaysian palm oil prices and productivity trends (1975-2002) 28 1.3.1.4 Number of palm trees available based on ownership category 28 1.3.1.5 Total area of oil palm plantations in Peninsular Malaysia, Sabah and 30 Sarawak in years 1975-2007 1.3.2.1 Potential area of WPT in Malaysia in years 2011-2035 31 1.3.2.2 Potential dry matter weight of WPT based on ownership category 32 1.3.2.3 Area of potential WPT in years 2011-2032 for Peninsular Malaysia, Sabah 32 and Sarawak 1.3.2.4 Number of potential WPT in Peninsular Malaysia, Sabah and Sarawak in 33 years 2011- 2032 1.3.2.5 Dry matter weight of trunks from potential WPT 33 1.3.3 Amount of dry matter weight of fronds available annually from potential WPT 35 in Peninsular Malaysia, Sabah and Sarawak 1.3.7 Total area of oil palm plantations for each State in Malaysia 38 1.3.8 Age distribution of palm trees and area of plantation in each State In 39 Malaysia 1.3.9 Number of oil palm trees planted per hectare for each State 40 1.3.10.1 Total area of actual felling programmes for years 2010 – 2031 41 1.3.10.2 Actual area of felling programmes and number of WPT for years 2010-2031 41 1.3.10.3 Number of oil palm plantation companies willing to sell their oil palm trunks 42 2.1.1.1 Differences in physical appearance and shape: young (left) and old palm 60 trees (right) 2.1.1.2 Oil palm trees infested with Ganoderma 61 2.2.1 Poisoned trees stacked in windrows 62 2.2.2.1 Shredded oil palm trees left to decompose (left) and then burnt (right) in the 64 fields 2.2.2.2 Under-planting method where young palms are planted under poisoned old 64 palm trees 2.2.2.3 Oryctes rhinoceros beetle 65 2.2.2.4 Mobile excavator push felling old palm trees (left) and shredded WPT left in 67 the fields (right) 2.3.1 Oil palm trunk harvesting methods 68 2.4.1 Animal feed from oil palm trunks (OPT) 70 2.4.2 Oil palm trunk sap squeezing pilot scale equipment (left) and sap produced 71 (right) 9 3.2.2.1 Veneer production for plywood manufacture