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

Transcription

1 IEA Bioenergy Task 40 / ERIA Workshop, AIST, Tsukuba, Japan October 2009 PALM OIL AS FEEDSTOCK FOR BIODIESEL : PRODUCTION & EXPORT FROM MALAYSIA Dr. Choo Yuen May Dr. Harrison L.N. Lau 1

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 2

3 MAP OF MALAYSIA Consists of 13 states (Peninsular Malaysia (11), Sabah and Sarawak) Total landmass: 329,847 km 2 3 major ethnics group: Malay, Chinese, Indian Population: 27.7 million 3

4 Palm oil is derived from a perennial tree crop (Elaeis guineensis) 4

5 The oil palm starts bearing fruits after 2.5 to 3 years 5

6 OIL PALM FRUIT Mesocarp Kernel OIL PALM TREE 6

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. 7

8 Advantage.. palm oil! economic life span: years slightly affected by season and weather harvested throughout the year 8

9 GLOBAL SCENARIO ON OILS AND FATS 9

10 WORLD OILS & FATS PRODUCTION, 2008 (160.5 MILLION TONNES) Others 16% Palm Oil 27% Animal Oils & Fats 15% Soyabean Oil 23% Sunflower Oil 7% Rapeseed Oil 12% Source: Oil World 10

11 WORLD OILS & FATS EXPORT, 2008 (60.79 MILLION TONNES) 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 Source: Oil World 11

12 WORLD OILS & FATS IMPORT, 2008 (61.20 MILLION TONNES) 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 Source: Oil World 12

13 WORLD MAJOR PRODUCERS OF PALM OIL, 2008 (43.1 MILLION TONNES) Million Tonnes Malaysia Indonesia Thailand Nigeria Colombia Ecuador Papua New Guinea Others Source: Oil World 13

14 WORLD MAJOR EXPORTERS OF PALM OIL, 2008 (33.62 MILLION TONNES) Others Hong Kong Cote d Ivoire Singapore Colombia Papua New Guinea Indonesia MALAYSIA Million Tonnes Source: Oil World 14

15 WORLD MAJOR IMPORTERS OF PALM OIL, 2008 (MILLION TONNES) China, P.R. 17% Others 36% EU 14% Egypt 2% India 16% Source: Oil World Bangladesh 3% USA 3% CIS 4% Pakistan 5% 15

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 16 16

17 OVERVIEW OF MALAYSIAN PALM OIL INDUSTRY 17

18 MALAYSIA : OIL PALM PLANTED AREA ( ) - HECTARES Million Hectares Mature Immature Total Occupied 4.49 mil. hectares in 2008 which is 20% of total Malaysia land area 18

19 Forest Areas in Selected Countries Country % Forest Area Total Forest Area (mil. ha) Total Land Area (mil. ha) France Sweden Germany Malaysia UK Brazil Argentina USA Denmark Source: FAO, Global Forest Resources Assessment, 2005

20 MALAYSIA : FFB, CPO & PALM KERNEL YIELD ( ) TONNES/HECTARE 25 Tonnes/ Hectare FFB CPO Palm Kernel 20

21 MALAYSIA : EXPORT OF OIL PALM PRODUCTS ( ) MILLION TONNES 14.0 Million Tonnes % exported to 150 countries CPO PPO CPKO PPKO PKO PKC PKO = CPKO + PPKO Export of oleochemicals in 2008 : mil.t 21

22 MALAYSIA : EXPORT OF PALM OIL TO MAJOR DESTINATIONS (2008/2007) MILLION TONNES COUNTRY % Diff China P.R EU Pakistan U.S.A India Japan Bangladesh U.A.E Vietnam South Africa Iran Others TOTAL

23 MALAYSIA : ANNUAL CLOSING STOCK OF OIL PALM PRODUCTS ( ) - TONNES 2.5 Million Tonnes Secure supply of palm oil with > 1-2 million tonnes of stock Palm Oil Palm Kernel Oil Palm Kernel 23

24 DEVELOPMENT OF MALAYSIAN BIODIESEL INDUSTRY 24

25 Development of MPOB Palm Biodiesel Programme Lab scale R&D 1982 Pilot plant built and commissioned 1985 Produces palm biodiesel for engine testing and market seeding Preliminary Field Trial (July 1984 May 1985) : 8 taxis Exhaustive Field Trial (Phase I): : 31 diesel engines of different makes Exhaustive Field Trial (Phase II): : 36 buses Fully established as diesel substitute in 1995 MPOB Palm Biodiesel Pilot Plant 25

26 Palm Biodiesel (Methyl Esters) Crude / Distilled Palm Oil Methyl Esters RBD Palm Oil Methyl Esters RBD Palm Olein Methyl Esters Winter Grade Palm Biodiesel (CFPP -21 C) 26

27 Palm Biodiesel from Other Feedstock (Used Frying Oil, Residual Oil from SBE) 27

28 SUMMER GRADE PALM BIODIESEL PLANT (Capacity : 60,000 Tonnes/Year) WINTER GRADE PALM BIODIESEL PLANT (Capacity : 30,000 Tonnes/Year) 28

29 ENERTECH BIODIESEL PLANT, SOUTH KOREA (2006/07) Overview of Biodiesel Plant Front view of Biodiesel Plant 29

30 NEW BIODIESEL CO. LTD., THAILAND (2008/09) 30

31 NATIONAL BIOFUEL POLICY The National Biofuel Policy launched in March 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 31

32 MALAYSIAN BIOFUEL INDUSTRY ACT The Act was gazetted on 1 st November 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 / ASTM D6751) was published in November

33 Implementation of Mandatory Use of Palm Biodiesel in Malaysia The introductory phase of implementation of mandatory use of palm biodiesel started with B5 by Government Departments on 3 rd February Government Departments involved in the B5 implementation:- Armed Forces (ATM) Kuala Lumpur City Hall (DBKL) Govt. Department B5 Usage by Govt. Departments (3 rd Feb 30 th Sep 2009) No. of Vehicles Volume of B5 Usage PME Used for B5 Mil. Litres Tonnes Litres Tonnes ATM 3, , , DBKL , Total 3, , , Source : Petronas 33

34 STATUS OF MALAYSIAN BIODIESEL INDUSTRY September 2009 Implementation Phase No. Capacity (Mil. T/Year) In Operation Completed Construction Under Construction Pre-Construction / Planning Total Approved

35 MALAYSIAN BIODIESEL INDUSTRY: PRODUCTION AND EXPORT ( ) 2006 * ** Palm Oil Utilized for Biodiesel 55, , , ,381 Production 54, , , ,098 Import NIL NIL NIL NIL Consumption NIL NIL NIL NIL Export 47,986 95, , ,612 * Aug - Dec 2006 ** Jan - Sep

36 MAJOR EXPORT MARKET OF PALM BIODIESEL ( ) 2009) 250, , , ,000 Million Tonnes 50,000 EU USA Singapore Indonesia Taiwan South Korea Australia China, P.R Others - 36

37 MALAYSIA: FEEDSTOCK USED FOR PALM BIODIESEL PRODUCTION RBD Palm Olein 1% PFAD 1% Others 7% RBD Palm Stearin 16% CPO 26% RBD Palm Oil 49% 37

38 ISSUES AND CHALLENGES 38

39 BIODIESEL BUSINESS VIABILITY 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). 39

40 ISSUES / CHALLENGES ON PALM BIODIESEL 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 40

41 Monthly Biodiesel Production Viability (August September 2009) RM/Tonne Tonnes 4,750 4,500 4,250 4,000 3,750 3,500 3,250 3,000 2,750 2,500 2,250 2,000 1,750 1,500 1,250 1,000 Production Viable Production Not Viable - honour old contracts Production Viable Production Not Viable - honour old contracts 30,000 25,000 20,000 15,000 10,000 5,000 - Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep PME Production (Tonnes) PME FOB PME Cost (CPO) 41

42 US$/tonne 2,000 1,800 Price Competitiveness of PME Against SME and RME (CIF Europe) US$/Tonne 1,600 SME PME RME 1,400 1,200 1, Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 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. 42 Source : Kingsman

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 Plantation Mill Refinery Biodiesel Plant More efficient reduce operation cost Excess energy in the mill use for refinery and biodiesel production For long term sustainability of palm biodiesel production, integration is a practical approach.

45 (2) Production of Value-Added Products from Palm Biodiesel PALM PHYTONUTRIENTS

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 HO R2 R1 R3 O 0.05 kg Coenzyme Q 0.06 kg Phospholipids H 3 C H 3 C O O O H n O

47 MPOB Palm Phytonutrients Technology (partially adopted by Carotino Sdn. Bhd.) CPO NPO Esterification Transesterification Crude Methyl Esters Fractional distillation C16:0 -SME, biodiesel C18 mixed low pour point biodiesel Vitamin E, sterols and squalene Integrated Process 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% Other In-house technologies: Carotech, Supervitamin, Palm Nutraceuticals and Jomalina

48 Production of Individual Carotene, Vitamin E & Cholesterol-free Sterol from Palm Biodiesel SFC 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-CO 2 Chromatography Short Path Distillation SC-CO 2 Extraction

50 (3) Working towards addressing sustainable / environmental issues of palm biodiesel production Sustainability of Palm Oil Industry 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 PM: No Clearing of Forests for Oil Palm Plantations * Source: News Straits Times, 25 June

53 MPOB LCA PROGRAMMES Aim is to improve carbon footprint and GHG emissions of the entire production chain of palm oil and related products LCA Programmes include - Upstream (nursery, plantation) - Midstream (CPO, RBD Palm Oil, RBD Palm Olein production, margarine, etc.) - Downstream (biodiesel) Address to international issues on GHG emissions and climate change mitigation

54 Life Cycle Assessment (LCA) of Palm Biodiesel A cradle-to to-grave case study based on conventional transesterification technology taking the boundary from oil palm nursery down to its final use as transportation fuel. Energy Raw materials Nursery Oil palm plantation Palm oil mill Air emissions Waste disposal Auxiliary materials Palm oil refinery Biodiesel factory Waste water treatment Combustion in vehicles 54

55 Life Cycle Assessment (LCA) of Palm Biodiesel 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 produced from palm oil obtained at oil mill with methane capture contributes to 62% and 56%, typical and default GHG emission saving respectively. 55

56 Life Cycle Assessment (LCA) of Palm Biodiesel 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 vegetable oils, palm biodiesel has been shown to contribute to greater GHG emission saving. 56

57 Conclusion Palm oil is the most economical feedstock for biodiesel production: highest yield per unit area. Winter-grade palm biodiesel technology to produce palm biodiesel (CFPP < -20 C) and new technology to overcome cold soak filterability requirement for palm biodiesel are available. 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 most sustainable manner both for food and non-food usage.

58 Malaysian Palm Oil Industry is Sustainable! Contact: Datuk Dr. Choo Yuen May, Deputy Director-General, MPOB or

59 Palm-based Biomass Briquette 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 converting low bulk density biomass into uniform and higher density solid fuels at high pressure and temperature. Screw press technology Piston press technology

60 Technical Specifications Other Biomass (shell) EFB Treatmnet Plant Briquetting Calorific Value 17,000 18,500 kj/kg ( 4,063-4,421 4,421 kcal/kg) Moisture content < 4.0% Ash content < 6.0% Density 1,100 1,300 kg/m 3 Binder free biomass briquettes