PALM OIL AS FEEDSTOCK FOR BIODIESEL : PRODUCTION & EXPORT FROM MALAYSIA

(1)

1 1

Dr. Choo Yuen May

Dr. Harrison L.N. Lau

PALM OIL AS FEEDSTOCK

FOR BIODIESEL :

PRODUCTION & EXPORT

FROM MALAYSIA

(2)

2 2

CONTENT

• Introduction on Palm Oil

• Global Scenario on Oils and Fats

• Overview of Malaysian Palm Oil Industry

• Development of Malaysian Biodiesel Industry

- Production and Export Market

• The Way Forward • Conclusion

(3)

MAP OF MALAYSIA

• Consists of 13 states (Peninsular Malaysia (11), Sabah and Sarawak) • Total landmass: 329,847 km2

• 3 major ethnics group: Malay, Chinese, Indian • Population: 27.7 million

3 3

(4)

4 4

Palm oil is derived from a perennial tree crop

(

(5)

5 5

The oil palm starts bearing fruits after 2.5 to 3 years

(6)

6 6

OIL PALM TREE

Kernel Mesocarp

OIL PALM FRUIT

(7)

7 7

• Oil palm fruits are processed at the mills. • 5 tonnes fruits gives 1

tonne of CPO.

• CPO is refined into RBD palm oil and further fractionated as RBD palm olein.

(8)

8

•

• economic life

economic life

span: 25

–

30 years

•

• slightly affected

slightly affected

by season and

weather

•

• harvested

harvested

throughout the year

Advantage

(9)

9 9

GLOBAL SCENARIO ON

OILS AND FATS

(10)

10 10 Soyabean Oil 23% Rapeseed Oil 12% Sunflower Oil 7%

Animal Oils & Fats 15% Others 16% Palm Oil 27%

Source: Oil World

WORLD OILS & FATS PRODUCTION, 2008

(160.5 MILLION TONNES)

(11)

11 11 Palm Oil 54% Soyabean Oil 17% Sunflower Oil 6%

Palm Oil Palm Kernel Oil Soyabean Oil Sunflower Oil Rapeseed Oil Coconut Oil Other Veg. Oils Animal Oils/Fats

WORLD OILS & FATS EXPORT, 2008

(60.79 MILLION TONNES)

(12)

12 12 Rapeseed Oil 4% Soyabean Oil 17% Palm Oil 55%

Palm Oil Palm Kernel Oil Soyabean Oil Sunflower Oil Rapeseed Oil Coconut Oil Other Veg. Oils Animal Oils/Fats

WORLD OILS & FATS IMPORT, 2008

(61.20 MILLION TONNES)

(13)

13 13 17.7 19.3 1.2 _0.9 _0.8 _0.4 _0.4 2.4 0 5 10 15 20 25 M a la ys ia Ind o nes ia Th a ila n d Ni g e ri a Col o m b ia Ec u a d o r Pa p u a N e w Gu in e a Ot h e rs Million Tonnes

Source: Oil World

WORLD MAJOR PRODUCERS OF PALM OIL,

2008 (43.1 MILLION TONNES)

(14)

14 14

WORLD MAJOR EXPORTERS OF PALM OIL,

2008 (33.62 MILLION TONNES)

- 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00

MALAYSIA Indonesia Papua New Guinea Colombia Singapore Cote d’Ivoire Hong Kong Others Million Tonnes

(15)

15 15 Others 36% Bangladesh 3% China, P.R. 17% EU 14% India 16% Pakistan 5% CIS 4% USA 3% Egypt 2%

WORLD MAJOR IMPORTERS OF PALM OIL,

2008 (MILLION TONNES)

(16)

16 16

16

Premier position of palm oil in the world

trade is largely attributed to its

competitive position in the market place

A position that has been defined by palm oil

’

s:



assured supply &

availability



product diversity &

versatility



competitive market

prices



superior product

performance

 

Competitive

production cost



wholesomeness &

nutrition values

(17)

17 17

OVERVIEW OF

MALAYSIAN PALM OIL

INDUSTRY

(18)

18 18

MALAYSIA : OIL PALM PLANTED AREA

(1975

-

2008)

-

HECTARES

-0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 M illio n H e ct a re s 1975 1980 1985 1990 1995 2000 2005 2006 2007 2008

Mature Immature Total

(19)

Forest Areas in Selected Countries

Country % Forest

Area

Total Forest Area (mil. ha)

Total Land Area (mil. ha)

France 28.3 15.55 55.01 Sweden 66.9 27.53 41.16 Germany 31.7 11.08 34.9 Malaysia 63.6 20.89 32.86 UK 11.8 2.85 24.09 Brazil 57.2 477.7 835.56 Argentina 12.1 33.02 273.67 USA 33.1 303.09 915.89 Denmark 11.6 0.5 4.31

(20)

20 20 0 5 10 15 20 25 1975 1980 1985 1990 1995 2000 2005 2006 2007 2008 Ton n e s/ H e ct a re

FFB CPO Palm Kernel

MALAYSIA : FFB, CPO & PALM KERNEL YIELD

(1975

-

2008)

–

TONNES/HECTARE

20.18

4.08 1.05

(21)

21 21 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 M illio n T o n n e s 1985 1990 1995 2000 2005 2006 2007 2008

CPO PPO CPKO PPKO PKO PKC

MALAYSIA : EXPORT OF OIL PALM PRODUCTS

(1985-2008) – MILLION TONNES

90% exported to 150 countries

(22)

22 22

MALAYSIA : EXPORT OF PALM OIL TO MAJOR

DESTINATIONS (2008/2007) – MILLION TONNES

COUNTRY

COUNTRY 20072007 20082008 % Diff% Diff

China P.R. China P.R. 3.843.84 3.793.79 --1.301.30 EU EU 2.062.06 2.052.05 --0.490.49 Pakistan Pakistan 1.071.07 1.281.28 19.6319.63 U.S.A. U.S.A. 0.790.79 1.051.05 32.9132.91 India India 0.510.51 0.970.97 90.2090.20 Japan Japan 0.530.53 0.550.55 3.773.77 Bangladesh Bangladesh 0.150.15 0.270.27 80.0080.00 U.A.E. U.A.E. 0.360.36 0.360.36 0.000.00 Vietnam Vietnam 0.250.25 0.200.20 --20.0020.00 South Africa South Africa 0.250.25 0.160.16 --36.0036.00 Iran Iran 0.230.23 0.260.26 13.0413.04 Others Others 3.713.71 4.474.47 20.4920.49 TOTAL 13.75 15.41 12.07

(23)

23 23

MALAYSIA : ANNUAL CLOSING STOCK OF OIL

PALM PRODUCTS (1988 – 2008) - TONNES

0.0 0.5 1.0 1.5 2.0 2.5 M illion Ton n e s

Palm Oil Palm Kernel Oil Palm Kernel

Secure supply of palm oil with > 1-2 million tonnes of stock

(24)

24 24

DEVELOPMENT OF MALAYSIAN

(25)

25 25

Development of

MPOB Palm Biodiesel Programme



 Lab scale R&D _{Lab scale R&D}–– 19821982



 Pilot plant built and _{Pilot plant built and}

commissioned

commissioned –– 19851985



 Produces palm biodiesel for _{Produces palm biodiesel for}

engine testing and market

seeding

seeding 

 Preliminary Field Trial _{Preliminary Field Trial}

(July 1984

(July 1984 –– May 1985) : 8 taxisMay 1985) : 8 taxis



 Exhaustive Field Trial (Phase I): Exhaustive Field Trial (Phase I): 1986

1986-- 1989 : 31 diesel engines 1989 : 31 diesel engines of different makes

of different makes 

 Exhaustive Field Trial (Phase II): _{Exhaustive Field Trial (Phase II):}

1990

1990 –– 1994: 36 buses 1994: 36 buses



 Fully established as diesel _{Fully established as diesel}

substitute in 1995

(26)

26 26

Palm Biodiesel (Methyl Esters)

RBD Palm Oil Methyl Esters

RBD Palm Olein Methyl Esters Crude / Distilled Palm

Oil Methyl Esters

Winter Grade Palm Biodiesel (CFPP -21°C)

(27)

27 27

Palm Biodiesel from Other Feedstock

(Used Frying Oil, Residual Oil from SBE)

(28)

28 28

SUMMER GRADE

PALM BIODIESEL PLANT

(Capacity : 60,000 Tonnes/Year)

WINTER GRADE

PALM BIODIESEL PLANT

(Capacity : 30,000 Tonnes/Year)

(29)

29 29

ENERTECH BIODIESEL PLANT,

SOUTH KOREA (2006/07)

(30)

30 30

NEW BIODIESEL CO. LTD., THAILAND

(2008/09)

(31)

31 31

 The National Biofuel Policy launched in

March 2006.

 The Policy envisions

:-― Use of environmentally friendly, sustainable and viable sources of energy to reduce the dependency on depleting fossil fuels,

― Enhanced prosperity and well-being of all the stakeholders in the agriculture and commodity based industries through stable and remunerative prices.

 Five (5) strategic thrusts

:-― Thrust 1: Biofuel for Transport ― Thrust 2: Biofuel for Industry ― Thrust 3: Biofuel Technologies ― Thrust 4: Biofuel for Export ― Thrust 5: Biofuel for Cleaner

Environment

(32)

32 32

 The Act was gazetted on 1st _{November 2008.}

 To regulate and ensure orderly development of the biofuel industry

:-― prescribing the type of biofuel ― percentage blending

― licensing activities related to biofuel and other

related matters

― mandatory blending of PME/olein with diesel for

local use

 The Malaysian Standard on Palm Methyl Esters MS

2008:2008 (similar to EN 14214 / ASTM D6751) was published in November 2008.

(33)

33 33

 The introductory phase of implementation of mandatory use

of palm biodiesel started with B5 by Government Departments on 3rd _{February 2009.}

 Government Departments involved in the B5

implementation:-― Armed Forces (ATM)

― Kuala Lumpur City Hall (DBKL)

Implementation of Mandatory Use of

Palm Biodiesel in Malaysia

Govt.

Department VehiclesNo. of _{Mil. Litres}Volume of B5 Usage_Tonnes _LitresPME Used for B5_Tonnes ATM 3,000 2.877 2,446 143,871 127 DBKL 900 1.168 993 58,422 51

Total 3,909 4.045 3,439 202,293 178

B5 Usage by Govt. Departments (3rd _{Feb – 30}th _{Sep 2009)}

(34)

34 34

September 2009

Implementation Phase No. _{(Mil. T/Year)}Capacity

In Operation 14 1.87 Completed Construction 5 0.25 Under Construction 11 1.11 Pre-Construction / Planning 58 6.97 Total Approved 91 10.20

STATUS OF

(35)

35 35

2006 * 2007 2008 2009 **

Palm Oil Utilized

for Biodiesel _{55,399 128,194 188,683 182,381}

Production 54,981 129,715 171,555 176,098

Import NIL NIL NIL NIL

Consumption NIL NIL NIL NIL

Export 47,986 95,013 182,108 190,612

* Aug - Dec 2006 ** Jan - Sep 2009

MALAYSIAN BIODIESEL INDUSTRY:

PRODUCTION AND EXPORT (2006-2009)

(36)

36 36

MAJOR EXPORT MARKET OF PALM BIODIESEL

(2006

-

2009)

-50,000 100,000 150,000 200,000 250,000 M illio n T o n n e s EU _USA Sing apor e Indo nes ia Taiw an Sout h Ko rea Aust ralia Chin a, P .R Other s

(37)

37 37

MALAYSIA: FEEDSTOCK USED FOR

PALM BIODIESEL PRODUCTION

RBD Palm Oil 49% CPO 26% RBD Palm Stearin 16% RBD Palm Olein 1% PFAD 1% Others_7%

(38)

38 38

ISSUES AND CHALLENGES

(39)

39 39

 Major factors influence biodiesel viability:

i. Feedstock prices

- price of CPO

- price of methanol

During high feedstock prices, companies have to cut production or wait for feedstock prices to moderate. Some companies have no choice but to run their plants to honour old export contracts. Companies can mitigate the situation

by:-- seeking cheaper alternative feedstock, (e.g. RBDPS)

- take advantage of forward pricing when favourable

ii. Biodiesel export prices

- High feedstock prices coupled with unmatched rise in biodiesel export prices squeeze producers profit margins. iii. Biodiesel export situation

- e.g. US Splash & dash (subsidy US$300/tonne) - importers willing to buy at higher price.

- Sustainable PME – Demand would improve PME export market.

* Biodiesel plant viability improves with integration of phytonutrients production (vitamin E & carotene).

(40)

40 40

1. Technological Challenge

• Meeting EN 14214/ASTM D 6751 specification e.g. cold soak • High CFPP.

2. Environmental Challenge

• Threats, especially from EU questioning sustainability of palm oil

production for biodiesel

• Allegations of destruction of orang utans, rainforests and loss of

biodiversity

• Allegations that development of peatland gives net emission of GHG • Food vs. Fuel debate

3. Market Risks

• Fluctuating Crude Oil & CPO prices

• Cheaper sources of raw material-Jatropha ?? • Change in Specification

• Overcapacity-dumping of Prices • Foreign Exchange Risk

4. Trade Barriers

(41)

41 41 1,000 1,250 1,500 1,750 2,000 2,250 2,500 2,750 3,000 3,250 3,500 3,750 4,000 4,250 4,500 4,750 Au g Se p Oc t No v De c Jan Feb Mar Apr May Jun Ju l Au g Se p Oc t No v De c Jan Feb Mar Apr May Jun Ju l Au g Se p Oc t No v De c Jan Feb Mar Apr May Jun Ju l Au g Se p 2006 2007 2008 2009 RM/Tonne -5,000 10,000 15,000 20,000 25,000 30,000 Tonnes

PME Production (Tonnes) PME FOB PME Cost (CPO)

Monthly Biodiesel Production Viability (August 2006 - September 2009)

Production Not Viable - honour old contracts Production Viable

Production Viable Production Not Viable - honour old contracts

(42)

42 42 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

2008 2009

US$/tonne

SME PME RME

• PME normally at price discount to SME and RME because of relatively low palm feedstock prices. In September 2009, the PME discount against SME and RME was US$55 and US$168 per tonne respectively.

• However, export of PME affected by subsidized export of biodiesel by US and sustainability criteria in EU.

Source : Kingsman

Price Competitiveness of PME Against SME and RME (CIF Europe) – US$/Tonne

(43)

The Way Forward

(1)

Vertical Integration of Palm Biodiesel

Production

(2)

Production of Value

-

Added Products

from Palm Biodiesel

(3)

Addressing sustainable/environmental

issues of palm biodiesel production

(44)

(1)

Vertical Integration of Palm Biodiesel

Production



More efficient

_{More efficient}

–

reduce operation cost



Excess energy in the mill

_{Excess energy in the mill}

–

use for refinery

and biodiesel production



For long term sustainability of palm biodiesel

_{For long term sustainability of palm biodiesel}

production, integration is a practical

approach.

Plantation Mill Refinery _Biodiesel

(45)

PALM PHYTONUTRIENTS

(2) Production of Value-Added Products

from Palm Biodiesel

(46)

Value

-

Added Products from

Palm Oil Methyl Esters

• For every 1 tonne of methyl esters

burnt as fuel, we also burn away:

–

0.6 kg

Carotenoids

–

0.8 kg

Vitamin E

–

0.5 kg

Phytosterols

–

0.4 kg

Squalene

–

0.05 kg

Coenzyme Q

–

0.06 kg

Phospholipids

O R3 R2 O H R1 O O H n O O C H₃ C H₃

(47)

MPOB Palm Phytonutrients Technology

(partially adopted by Carotino Sdn. Bhd.) (partially adopted by Carotino Sdn. Bhd.)

CPO

NPO

Esterification

Transesterification

Crude Methyl Esters

Fractional distillation _{Integrated Process}

• C16:0 – -SME, biodiesel

• C18 mixed – low pour point biodiesel • Vitamin E, sterols and squalene

• Distilled methyl esters • High purity phytonutrients

e.g. Carotenes >30% Vitamin E >70% Squalene >70% Sterols >95% • Individual components e.g. -sitosterol >95% Vitamin E isomers >95% Individual carotene >95%

(48)

Production of Individual Carotene, Vitamin E &

Cholesterol

Cholesterol--free Sterol from Palm Biodieselfree Sterol from Palm Biodiesel

High purity (>90%) of the following produced:

 individual carotene, e.g. - and  -carotenes, lycopene and

phytoene

 individual vitamin E isomers, e.g.

- and -tocopherols, -, - and  -tocotrienols

 -sitosterol

+

(49)

MPOB Integrated Phytonutrients

Production Pilot Plants

SC-CO₂ Chromatography

Short Path Distillation

(50)

(3) Working towards addressing sustainable /

environmental issues of palm biodiesel production

• Soil conservation practices

• Leguminous cover crops

• Environmental/Innovative re-planting

• ASEAN Policy on Zero Burning (2003)

• Recycling of oil palm biomass (nutrients)

• Regular pruning of fronds

• Integrated pest management

• Use natural predators, e.g. barn owl

(51)

Sustainability of Palm Oil Industry

• Biodiversity

• Oil palm, a perennial tree crop has greater

biodiversity

• Waste management

• Effluent treatment

• Methane avoidance/utilization

• Social/Human capital

• Rural poor have a new and better way of life

• Good agricultural practices / Code of Practice

• Examine the details requirement of GAP

standards

(52)

52 52

PM: No Clearing of Forests

for Oil Palm Plantations

(53)

MPOB LCA PROGRAMMES



 Aim is to improve carbon footprint and GHG emissions _{Aim is to improve carbon footprint and GHG emissions}

of the entire production chain of palm oil and related

products



 LCA Programmes include_{LCA Programmes include}

-- Upstream (nursery, plantation)Upstream (nursery, plantation)

-- Midstream (CPO, RBD Palm Oil, RBD Palm Olein Midstream (CPO, RBD Palm Oil, RBD Palm Olein production, margarine, etc.)

production, margarine, etc.)

-- Downstream (biodiesel) Downstream (biodiesel)



 Address to international issues on GHG emissions and _{Address to international issues on GHG emissions and}

climate change mitigation

(54)

Life Cycle Assessment (LCA) of

Palm Biodiesel



 A cradle_{A cradle}--toto--grave case study based on conventional grave case study based on conventional

transesterification technology taking the boundary from

oil palm nursery down to its final use as transportation

fuel. fuel. 54 54 Nursery Oil palm plantation

Palm oil mill

Palm oil refinery

Biodiesel factory Energy Auxiliary materials Raw materials Air emissions Waste water treatment Waste disposal Combustion in vehicles

(55)

Life Cycle Assessment (LCA) of

Palm Biodiesel



 Under the EU Directive for the Promotion of the Use _{Under the EU Directive for the Promotion of the Use}

of Energy from Renewable Sources (2009/28/EC),

palm oil biodiesel (process not specified) has a typical

GHG emission saving of 36 percent but a significantly

lower default GHG emission saving of 19 percent,

taking into consideration of the imposition of the 40%

inefficiency in processing of biofuels.



 However, data have shown that palm biodiesel _{However, data have shown that palm biodiesel}

produced from palm oil obtained at oil mill with

methane capture contributes to 62% and 56%, typical

and default GHG emission saving respectively.

55 55

(56)

Life Cycle Assessment (LCA) of

Palm Biodiesel



 Based on the current practices in the Malaysian _{Based on the current practices in the Malaysian}

palm oil industry, we are confident to claim that palm

biodiesel typically contribute to >50% GHG emission

savings which is much higher than the typical GHG

emission saving of 36 percent under the EU

Directive for the Promotion of the Use of Energy

from Renewable Sources (2009/28/EC).



 As compared to biodiesel produced from other _{As compared to biodiesel produced from other}

vegetable oils, palm biodiesel has been shown to

contribute to greater GHG emission saving.

56 56

(57)

Conclusion



 Palm oil is the most economical feedstock for _{Palm oil is the most economical feedstock for}

biodiesel production: highest yield per unit area.



 Winter_Winter--grade palm biodiesel technology to produce grade palm biodiesel technology to produce palm biodiesel (CFPP <

palm biodiesel (CFPP < --2020°C) and new technology °C) and new technology

to overcome cold soak filterability requirement for

palm biodiesel are available .



 Biodiesel derived from palm oil provides option for _{Biodiesel derived from palm oil provides option for}

vertical integration opportunity which will enhance

the viability of biodiesel business despite of high

crude oil prices.



 Malaysian is committed to produce palm oil in the _{Malaysian is committed to produce palm oil in the}

most sustainable manner both for food and non

most sustainable manner both for food and non--food food usage.

(58)

Malaysian Palm Oil Industry

is Sustainable!

Contact:

Datuk Dr. Choo Yuen May, Deputy Director-General, MPOB

choo@mpob.gov.my or

(59)

Palm

-

_-

based Biomass Briquette

_{based Biomass Briquette}



 Oil palm biomass in _{Oil palm biomass in}

particular of EFB fiber and

palm shell are potential

feedstock for the production

of biomass briquette



 Briquetting is a process of _{Briquetting is a process of}

converting low bulk density

biomass into uniform and

higher density solid fuels at

high pressure and

temperature.

Screw press technology

(60)

Technical Specifications



 Calorific Value_{Calorific Value} 17,000 17,000 –– 18,500 kJ/kg ( 4,06318,500 kJ/kg ( 4,063--4,421 kCal/kg)4,421 kCal/kg)



 Moisture contentMoisture content < 4.0%< 4.0%



 Ash content_{Ash content} < 6.0%< 6.0%



 Density_Density 1,100 1,100 –– 1,300 kg/m1,300 kg/m33



 Binder free biomass briquettesBinder free biomass briquettes

EFB Treatmnet Plant Briquetting Other Biomass (shell)