Microsoft Word - Minor Thesis Methane Scenario Palm Oil-Roby Fauzan

Options and Scenarios for Methane Emission Reduction
from Palm Oil Mill Wastewater Treatment in Indonesia
Source: Directorate General of Crop Estate, Indonesian

Department of Agriculture, 2007
Source: Directorate General of Crop Estate, Indonesian

Department of Agriculture, 2007
ESA Minor Thesis by Roby Fauzan (MAB 791030237010)

Supervised by Drs. Andre van Amstel
Wageningen University and Research (WUR), 2008
Abstract
This thesis is aimed to explore the potential scenarios to be developed for methane
emission reduction from palm oil mills wastewater treatment through literature study and
scenario analysis. Several scenarios are developed with forecasting and backcasting
methods. The methods of emission reduction are achieved through minimizing the
wastewater generation in the mills, composting, biomass, and biogas utilization, as well as
creating demand for the bio based products and energies. The effectiveness of each
scenario much depends on the awareness of the consumer in the destination countries of
CPO exports, the relative ratio between food and non food related use of CPO and its
derived products, the direct or indirect financial and marketing success stories of previous
mills in implementing the methane reduction efforts and also the regulation in the
importing countries. Establishing small business area to create demand for the compost
and the bio energy not only stimulates biogas utilization, but also indirectly stimulate
enhancement in agronomic practices to maintain the supply for the mills, and lastly
enhancing the research to search for better planting material, another approach towards
sustainability from methane reductions to the implementation of best agronomic practices.
Keywords: CPO, forecasting, backcasting, methane emission reduction, sustainability
Foreword
This thesis presents the research for my minor thesis at Environmental System Analysis
(ESA) group as part of my MSc Programme in Agriculture and Bio resource Engineering
(MAB) in Wageningen University and Research Centre. The topic concerns the scenario
development for methane emission reduction from palm oil mill effluent (POME)
treatment in Indonesia. The work was supervised by Drs. Andre van Amstel from the
Environmental System Analysis (ESA) group. The thesis consists of five chapters from
introduction, literature review, results, discussions to conclusions. Four scenarios are
developed by forecasting methods and three scenarios by backcasting methods.
Furthermore, recommendations are developed for the key decision makers.
I would like to thank God the Almighty for His endless gift, bless, and kindness to me. I
would like to express my special thanks and appreciation to my supervisor Mr. Andre van
Amstel for his guidance during the work and his constructive inputs and supervision for
this thesis. He is very supportive indeed. I would like to thank and appreciate my
Indonesian fellows from Indonesian Student Association for their support to me to keep
my effort to finish this thesis. I would like to deliver my very special thanks to my lovely
wife, Kiki Rizky Ayuningtias, in Indonesia for her support and her daily praying for my
success. Also, I deliver my deep thanks for the valuable support from my former
colleagues in Indonesian Oil Palm Research Institute (IOPRI), Ir. Bagus Giri Yudanto, Ir.
Ratnawati Nurkhoiri and Ahmad Irvan, Amd, by providing me information and literature
support for this thesis. It is expected that this thesis can make a contribution to the efforts
towards sustainability of the palm oil production in Indonesia.
Wageningen, February 2009
Roby Fauzan
TABLE OF CONTENTS
ABSTRACT 1
FOREWORD 2
TABLE OF CONTENTS 3
ABBREVIATION 5
CHAPTER 1 6
1.1. Research Background 6
1.2. Statement of the Research Problem 12
1.3. Objective of the Study and Research Questions 12
1.4. Research Steps and Methods 13
1.5. Content of the Report 15
CHAPTER 2 17
2.1. Overview of Palm Oil Mill Processing and Wastewater Treatment 17
2.2. Several Discussions in Wastewater Treatment, Methane Emissions Reductions and Integrated
Complex 23
2.3. Methane Emission Estimation from Palm Oil Mills in Indonesia, Scenario Forecasting and
Backcasting 29
CHAPTER 3 34
3.1. Simple Forecasting 34
3.2. The Desired Futures-Backcasting Analysis 44
CHAPTER 4 58
4.1. Forecasting Discussion 58

4.1.1. Business as Usual Scenario 58
4.1.2. Moderate, Optimistic and Very Optimistic Scenario 59
4.2. Backcasting Analysis 60
4.3. Key Actors Analysis, Impact Predictions and Transition Management 63
CHAPTER 5 68
5.1. Conclusion 68
5.2. Recommendation 69
APPENDICES. 72
REFERENCES 78
ABBREVIATION
AMDAL Analisa Mengenai Dampak Lingkungan - Indonesian Regulatory

Environmental Impact Assessment
BOD Biochemical Oxygen Demand
CDM Clean Development Mechanism
COD Chemical Oxygen Demand
CPO Crude Palm Oil
CSR Corporate Social Responsibility
CSTR Complete Stirred Mixed Reactor
EFB Empty Fruit Bunch
FFB Fresh Fruit Bunch
MPOB Malaysian Palm Oil Board
NGO Non Governmental Organization
IOPRI Indonesian Oil Palm Research Institute
IPCC International Panel on Climate Change
POME Palm Oil Mill Effluent
PORIM Palm Oil Research Institute of Malaysia, now MPOB
PROPER Program Pemeringkatan Kinerja Perusahaan – Indonesian

Program of Corporate Environmental Ranking Assessment
RSPO Roundtable on Sustainable Palm Oil
UASB Up flow Anaerobic Sludge Blanket
UASFF Up flow Anaerobic Sludge Fixed Film

Chapter 1
1.1. Research Background
Oil palm is one of Indonesian non petroleum and gas export commodities that have grown
consistently in total production for many years. Total area and production of crude palm oil
(CPO) increase from only 290 thousand hectares and 721 thousand tons in 1980 to more
than 6 million hectares and 17 million tons in 2006 (Director General of Crop Production,
Indonesian Department of Agriculture, 2008, online).
Table 1.1. Summary of Oil Palm Plantation and CPO Production Growth in Indonesia
(translated)
Total Area (in thousand hectares) Production of CPO (in thousand tons)
State Owned Private State Owned Private
Year Smallholder National Smallholder National
Plantation Corporation Plantation Corporation
1980 6 200 84 290 1 499 221 721
1990 291 372 463 1 126 377 1 247 179 1 803
1995 659 405 962 2 026 1 001 1 614 1 864 4 479
1996 739 427 1 084 2 250 1 134 1 707 2 058 4 899
1997 813 517 1 592 2 922 1 283 1 587 2 578 5 448
1998 891 557 2 113 3 561 1 345 1 502 3 084 5 931
1999 1.041 577 2 284 3 902 1 548 1 469 3 439 6 456
2000 1.167 588 2 403 4 158 1.906 1 461 3 634 7 001
2001 1.561 610 2 542 4 713 2 798 1 519 4 079 8 396
2002 1.808 632 2 627 5 067 3 427 1 608 4 588 9 623
2003 1.854 663 2 766 5 283 3 517 1 751 5 173 10 441
2004 2.220 606 2 459 5 285 3 847 1 618 5 366 10 831
2005 2.356 530 2 567 5 454 4 500 1 449 5 911 11 861
2006 2.549 687 3 357 6 594 5 783 2 313 9 254 17 350
2007*) 2.565 687 3 358 6 611 5 895 2 313 9 254 17 373
2008**) 2.565 687 3 358 6 611 5 805 2 314 8 990 17 109
Sources: Website of Directorate General of Crop Production, Indonesian Department of
Agriculture, 2008
! " #!
$ !% &' " () " ((*
+, ++, " '
Figure 1.1. Distribution of oil palm plantation in Indonesia
Source: Indonesian Department of Industry, 2007
Nowadays, the palm oil industry in Indonesia faces several environmental problems mainly
due to the expansions in primary or remaining secondary forests and peat land and the
controversy of bio fuel versus food. The other environmental problems are water pollution
and land conflicts among the plantation companies and indigenous people. Further efforts
are required by the industry to deal with this problem. The industry needs support from the
government and other stakeholders through researches, initiatives, marketing, and policies.
As the consequence of the Kyoto Protocol, the reduction of greenhouse gases become issue
in many countries, especially in Europe. Complementary to global concerns in global
warming and environmental protection, green consumerism shows a challenge and
opportunity to the industry The initiative of Roundtable on Sustainable Palm Oil (RSPO)
certification by the industry and several NGOs aims to deal with green consumerism and
also increase the image of the palm oil based products in the international market, as a
strategy to the industry’s sustainability. Emission trading and Clean Development
$
Mechanism (CDM) also provide opportunities to the industry to get involved in global
effort to reduce the effect of global warming and also become greener.
Current practices of wastewater treatment in Palm Oil Mill in Indonesia and Malaysia are
using waste stabilisation ponds with or without irrigation of effluent to the field
(Erningpraja and Fauzan, 2005; Hansen, 2007; Subramaniam et.al.,2008; Yousoff, 2008).
These stabilisation ponds primarily consist of series of anaerobic ponds followed by
facultative or algal pond. The anaerobic ponds will emit huge amounts of methane gases.
The effluent used for land application usually from anaerobic ponds that still contain high
COD usually result in anaerobic process occurred in the ditch used for irrigation. Recently,
Poh and Chong (2009) have summarized the production of methane from various
anaerobic treatment techniques for palm oil mill effluent (POME), as displayed in the table
1.2.
Table 1.2. Various performances POME of anaerobic treatment and methane production
Treatment Organic Hydraulic Methane COD removal Reference
retention time composition efficiency
Type Loading
(days) (%) (%)
Rate
(kg
COD/m3day)
Anaerobic 1.4 40 54.4 97.8 Yacob et al.
pond (2006a) in Poh
and Chong,
(part of WSP)
2009
Anaerobic 2.16 20 36 80.7 Yacob et.al

Digester (2005) in Poh
and Chong,
2009
Anaerobic 4.5 15 63 94 Borja and
Filtration Banks (1994b)
in Poh and
Chong, 2009
*
Treatment Organic Hydraulic Methane COD removal Reference
retention time composition efficiency
Type Loading
(days) (%) (%)
Rate
(kg
COD/m3day)
Fluidized Bed 40 0.25 not available 78 Borja and
Banks (1995b)
in Poh and
Chong, 2009
UASB 10.63 4 54.2 98.4 Borja and
Banks (1994c)
in Poh and
Chong, 2009
UASFF 11.58 3 71.9 97 Najafpour et.al
(2006) in Poh
and Chong,
2009
CSTR 3.33 18 62.5 80 Tong and
Jaafar (2006)
Anaerobic 3.44 4.7 63 93.3 Ibrahim et.al
Contact (1984)
Process
Sources : Poh and Chong, 2009
The sources of carbon (which become the raw material for methane production) in the
wastewater pond are largely from the remaining oil in the raw wastewater and solid from
sludge production in Palm Oil Mill, which cause high value of BOD and COD in POME.
The characteristic of POME can be seen in the table 1.3 below.
-
Table 1.3. Characteristic of POME
Parameter Concentration (mg/L) Elements Concentration (mg/L)
Oil and Grease 4 000 – 6 000 Potassium 2 270
Biochemical Oxygen 25 000 Magnesium 615
Demands (BOD)
Chemical Oxygen 50 000 Calcium 439
Demands
Total Solids 40 500 Phosphorus 180
Suspended Solids 18 000 Iron 46.5
Total Volatile Solids 34 000 Boron 7.6
Total Nitrogen 750 Zinc 2.3
Ammoniacal Nitrogen 35 Manganese 2.0
Copper 0.89
Source: Ma, 2000, in Sumathi, Chai and Mohamed, 2008
Methane emission reduction can be done in two ways, by using recovery of the methane
from the ponds or by reducing the amount of carbonaceous material that contributes to the
wastewater. This high value of BOD in POME provides opportunity to capture the
valuable methane. An example for methane utilization using POME is being pioneered by
Bumibiopower, a subsidiary of Mitsubishi Securities Co., Ltd, a Japanese company, in
Pantai Remis, Malaysia as reported by Mitsubishi Securities Clean Energy Finance
Committee, January 2004, cited in Sumathi, Chai and Mohamed, 2008. Another concept of
methane recovery and biomass reduction, proposed by Schuchdart et.al, 2007, is by using
Eco-Decanter (that saves water and enhance oil recovery) in Palm Oil Mill and use bio
digester to treat the wastewater and capture the methane and use the wastewater to provide
moisture for the composting process of empty fruit bunch. But one of the problems for
methane recovery is, palm oil mill prefers ponds system because it is the most economical
and simplest technology. In Indonesia, based on my own experience in IOPRI (Indonesian
Oil Pam Research Institute), no company is heard using other systems than anaerobic
ponds, the variations are whether they use facultative ponds for further treatment of
anaerobic ponds effluent or they use the effluent from anaerobic ponds for composting
(provide moisture for composting of empty fruit bunch) or reuse the effluent for irrigation.
Even in Malaysia, waste stabilisation ponds system is used in more than 85% of palm oil
(
mills (Ma et al., 1993, in Poh and Chong, 2009) and the rest use open digesting tank
(Yacob et al., 2005, in Poh and Chong, 2009). The other problem for methane recovery is,
the palm oil mill is energy sufficient from biomass burning for heating the boiler as the
power plant. The excess of energy is used for domestic use.
“The use of methane for power generation could be considered, but most palm oil mills are
self-sufficient in power, so the option of using biogas for energy production in the palm oil
industry has not been applied yet (Chavalparit, et.al., 2006)”.
It is expected that this research also contributes to policy making in Indonesia related to the
reduction of greenhouse gases and carbon trading. Indonesia still has no regulation related
to methane reduction from POME treatment. Indonesian Minister of the Environment, Mr.
Rahmat Witoelar said that Indonesia is still preparing the regulation for carbon trading in
Indonesia, as written in www.kompas.com 7 November 2008 edition. The minister said
that Indonesian Government will wait for the results of another international climate
change conference to be held in Copenhagen, 2009
(http://www.kompas.com/read/xml/2008/11/07/15190373/aturan.perdagangan.karbon.seda
ng.digodok.pemerintah& 7 November 2008). Since 1995, Indonesia government, through
Ministry of the Environment Office, has developed an initiative called PROPER (Program
Pemeringkatan Kinerja Perusahaan), a complementary instrument to measure
the company'
s environmental performance in a rating program. This initiative received the
Zero Emission Award from United Nations University, Tokyo, in 1996. The assessment
not only include compliance on water pollution control, air pollution control, hazardous
and toxic waste management and implementation of Environmental Impact Assessment
(AMDAL), but also implementation of environmental management system, waste
management and resources conservation and community development which lead to the
measurement of Corporate Social Responsibility (CSR) of the companies
### ' . ( / '( . ( ' last
visited 30 November 2008 PROPER can accommodate new initiatives such as ISO 14001
and RSPO, by integrating the implementation of them into the assessment. This makes
PROPER a general instrument to rank and make comparison between companies’
environmental performance. Erningpraja and Fauzan (2005) discussed the possibility of
implementing ISO 14001 and RSPO together in palm oil mill in Indonesia and proposed
the integration of PROPER, ISO 14001 and RSPO in Indonesia oil palm industry.
1.2. Statement of the Research Problem

Indonesia still has no specific policies for reducing methane emission from POME
treatment. The relevance of this research is to discuss and provide policy alternatives to
promote methane reduction from POME treatment in Indonesia, also possibly contribute as
the part of the future carbon trading policies and improvement of PROPER initiative in
Indonesia, as explained before. This research is expected to contribute to implementation
of principles and criteria (P&C) of RSPO that requires a plan to further reduce methane
emissions (especially criterion 5.6) (RSPO, 2005). Besides the pressure of environmental
NGO, the RSPO certification is increasingly important in terms of the need for sustainable
development of palm oil as raw material for bio fuel and the anticipation of green
consumerism. This research will focus on scenario analysis to deal with methane emission
reduction from wastewater treatment in the (palm oil) industry in Indonesia. This research
is done through literature study, also accompanied by interview with practitioners in
Indonesia state-owned plantation company. Several scenarios will be developed and
analysed and compared with other qualitatively to economic, social, and environmental
consequences, and also to a base scenario (business as usual). The challenge for this
research is how to analyse current available policies in Indonesia (such as PROPER) and
initiatives (such as ISO 14001 and RSPO certification) to provide several alternatives for
methane emission reduction incentive.
1.3. Objective of the Study and Research Questions

This research is aimed to discuss and develop further potential scenarios for reducing
emissions of methane gas from palm oil mill in Indonesia by investigating current practices
and technologies in palm oil mill in Indonesia and other oil palm producers. The objective
framework will be set by the following steps:
- Identify several policies related to environmental management in oil palm
industries in Indonesia, Malaysia, and other palm oil producers.
- Make a system analysis of current palm oil mill practices and technologies
- Develop and discuss several scenario alternatives for methane reduction in POME
treatment
In order to achieve the research objective, the research questions are formulated as follows:
1. What are the current practices in POME treatment that produces methane
emissions?
Sub Question:
What are the current efforts done by the palm oil industry to capture or reduce the
methane emissions from POME treatment?
What research is already done in POME treatment in order to mitigate the impact
of methane emissions?
What are the potential technologies available to reduce methane emissions?
2. What are the policies already proposed and potentially developed further to
mitigate methane emission from palm oil mill?
Sub Question:
What are the current policies by the government of Indonesia in order to reduce
the methane emissions from POME treatment?
What are the scenario and policies alternatives developed in order to reduce the
methane emissions?
1.4. Research Steps and Methods

The research is to be conducted mainly by using extensive literature study. The framework
of study will follow the six steps in environmental system analysis as proposed by
Findeisen and Quade (1997):
Step 1. Formulate research problem (how to develop scenario and policy alternatives for
reduction of methane emission in POME treatment)
Step 2. Identify, design and screen possible alternatives for methane reduction for POME
Step 3. Forecast future context or state of the world
Step 4. Build and use models for predicting the results of each alternative.
Step 5. Compare and rank alternatives
Step 6. Communicate the results (finalising reports and/or submitting paper to journal)
The research will be done through following phases:
1. Literature Study and Phone Interview
- Literature study will be conducted in most of the research journey as the main
procedures to collect data. Primary data will be collected from interview (via phone)
with experts or researchers from IOPRI (Indonesian Oil Palm Research Institute) and
practitioners from State-Owned Oil Palm Companies in Indonesia. Secondary data
will be collected from MPOB (Malaysian Palm Oil Board), IOPRI, journals,
proceedings, RSPO (Roundtable on Sustainable Palm Oil) Secretariat Office, project
related to emission trading in oil palm, books, newspaper online, and other internet
sources
2. Data Analysis and Discussion
The data collected through literature study will be analysed by using the following
tools:
1. Content analysis. The content of the literatures will be selected, classified and
grouped for further analysis.
2. Problem Exploration analysis. This analysis will overview the problem and mind
map the cause-effect and possible responses. This tool is very useful for initial
analysis and making initial alternatives for the answer to the research problems.
3. Unit operation analysis. This is specially for analysing the palm oil mill operation
in order to get insight into the origin of wastewater generation. Possible
technology improvement and further research will be investigated through
literature study.
4. Stakeholders and key actors analysis. The stakeholders in this study are defined as
Plantation Company, the government, environmental NGO in Europe, the
consumer of palm oil in Europe, and emission trading buyer. Stakeholder analysis
will be included as part of scenario analysis.
5. Scenario analysis. Finally, several alternatives are selected and scenario analysis
will be conduct to predict the future state. The scenarios are developed through
forecasting and backcasting methods.
3. Results Presentation
The results will be done by finalising the report through constructing conclusion and
building recommendation for the decision makers. The final outcome is thesis report
and will be presented on a final report presentation at ESA – Group Wageningen
University and Research. It is also expected to be made in scientific paper form in
order to be submitted and published in palm oil seminar or in scientific journals.
1.5. Content of the Report

This thesis is to be divided into five chapters as follows:
Chapter 1. This chapter presents an introduction to the research by explaining the research
background, research problems and questions, and also research steps and methods.
Chapter 2. This chapter presents the general overview of palm oil mill operation,
description of wastewater stabilisation ponds in POME treatment and other methods of
POME treatment. This chapter also explain further the theoretical background of research
methodology, data collecting and analysis.
Chapter 3. This chapter presents the results from literature study in order to analyse the
results and develop scenario analysis models. Stakeholder analysis is part of scenario
analysis.
Chapter 4. This chapter presents the discussion of the analysis conducted in Chapter 3.
Chapter 5. The conclusion of the research and the recommendation for the decision
makers will be presented in this chapter.
The timetable of the schedule is displayed below.
Tabel 1.4. Research Timetable
Work Plan
Period 2 Period 3 Period 4 Period 5
Chapter 1/Proposal
Contact Building
Proposal Colloquium
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Report / Paper Finalization
Research Finalization
Chapter 2
2.1.Overview of Palm Oil Processing and Wastewater Treatment

After being harvested in the field, the fresh fruit bunch (FFB) must be transported into the
mill not more than 24 hours after harvest time, to avoid the increase in free fatty acid
(FFA) content that degrade the palm oil quality. In the reception station, the FFB are
sorted. Then, they are put in the lorry before being put in the sterilizer. The sterilizer
applies steam in order to loosen the fruit to make it easier to detach from the bunch and
also inactivate the enzymes which stimulates the increase of FFA. Then, the thresher will
detach the fruit from the bunch and then they will be carried to the digester. The digester
will separate the nut from the mesocarp, and the mesocarp will be pressed in the pressing
station in order to extract the crude oil. Here, dilution water is added. Then the slurry is
transported to the clarification station in order to purify the crude oil. In the terms of
wastewater management, this clarification station is important because this station plays
the most important role in the yield of oil, the amount of sludge and wastewater produced
and the amount of oil loss that will go to the wastewater treatment. The unit operations
here consist of sand trap tank (to remove the sand), vibrating screen (to separate the fibre),
waste conveyor, dilution crude oil tank, clarifier tank (to separate the sludge to get clean
oil), the sludge tank, sand cyclone (to separate the sand in the sludge), brush strainer (to
separate the fibre from the sludge), sludge separator, balance tank, oil trap, sludge pit,
clean oil tank, oil purifier and vacuum dryer. Thus, efficiency in this station is vital. The
picture below from PORIM (Palm Oil Research Institute of Malaysia, 1993) explains the
conventional train of processes in palm oil mill. Nowadays, the incinerator is not widely
used in Indonesia and the empty fruit bunches are transported to the field or in the recent
development are composted with the wastewater as moisturizer.
$
Figure 2.1. Schematic Flow Diagram of Palm Oil Mill (PORIM, 1993)
*
Figure 2.2. Material Flow Chart of Palm Oil Mill (PORIM, 1993)
-
Figure 2.3. Typical Mass Balance in Palm Oil Mill (PORIM, 1993)
(
Figure 2.4. Popular Products from Oil Palm Fruit to Crude Palm Oil and Kernel
As seen in figure 2.4, oil palm tree is a miracle tree, a “golden” tree that almost all of its
part can be exploited to economical products. This promises a bright future for the
industry. A typical palm oil mill complex only produces CPO and kernel as main products.
Compost is produced nowadays and only small parts of total shell and fibre is used as
biomass fuel.
The wastewater is usually treated with a series of anaerobic-facultative ponds (waste

stabilization ponds) even in Malaysia. Total retention time varies from 90 – 180 days. If
the effluent is irrigated to the field, than the retention time is shorter (usually anaerobic
ponds is enough). Effluent from the anaerobic ponds can be used directly for field
irrigation. An example of pond lay out is in figure 2.5:
Figure 2.5. Example of Effluent Treatment in Palm Oil Mill (Indonesian Department of
Agriculture, modified, 2006)
2.2.Several Discussions in Wastewater Treatment, Methane Emissions Reductions
and Integrated Complex
Several alternatives (such as membrane technologies, UASB, anaerobic contact processes)
had been researched and suggested for substituting the famous, simple in construction,
easy-to-operate and economical waste stabilization ponds/WSPs (see table 1.2 in Chapter
1). But these results do still not convince most of the mills to change their wastewater
treatment option from the popular WSPs with or without land application. The big
investment and maintenance cost of other treatment compared to the conventional WSP
(with or without irrigation) and no need for extra energy from biogas in the palm oil mills
provide no incentive for “changing direction”. Under-performed WSPs are usually
upgraded to irrigation variant of WSPs and the volume for land application is maximized
so further treatment in facultative ponds are minimized (or not needed). This helps improve
the effluent quality discharged to the river.
Effort to utilize most of renewable energy had been started in Malaysia in 1980’s. This
needed huge investment. One the integrated complex is located at Masai District of Johor.
“It comprises a 45mt/hr mill, a 1,200mt/day physical refining refinery and 1,300mt/day
fractionation plant, a 90mt/hr kernel crushing plant, a minor component concentrates
(carotene, pro vitamin A and tocotrienols, vitamin E) extraction factory and estate/factory
quarters. The mill was built in year 1972, refinery in 1979, kernel crushing plant in 1985
and vitamin plant in 2003. Pressured by uncertainty of fuel oil and diesel supply in early
1980’s and severe price fluctuation of the fuels from time to time, many energy related
projects were tried out since early 1980’s. Today, the successful energy projects are able to
supply about 90% thermal energy and estimated 50% power required by the integrated
complex” (Chua, Gian, Chua, Ngoi, Teo, 2007).
Integrated complex of mills and processing plants are the usual approach in order to
maximize biomass utilization. For a mills surrounded by many mills nearby it will not pose
many problems but many mills in Indonesia and Malaysia are located quite far from other
mills to supply the raw material for the processing complex. The main problems for an
integrated complex are (Weng and Kandiah, 2007):
• For investing and building the palm kernel crushing and palm oil refining facilities into
economical scale, the output of palm oil and palm kernels from a typical mill are too
little to supply the raw material for both facilities. Supplying with oil and kernels
produced by other palm oil mills not always be convenient or economically viable.
• Most palm oil mills operate about in 16 to 24 hours per day, whereas refineries and
kernel crushing plants are normally operated 24 hours per day. Hence, it will be
difficult for a refinery or kernel crushing plant to depend on a palm oil mill for all its
energy requirements and stand-by boilers will have to be installed. Process
interruptions in palm oil mills are also quite unpredictable.
• Most mills are located in remote areas which typically offer very little facilities to spur
industrial development based on cheap energy sources.
However, the excess of biomass and the potential biogas in palm oil mills give future
opportunities and hope for renewable energy sources in the future. In order to make biogas
utilization more feasible, minimizing the source of the wastewater in the mills through
better clarification systems is one of the ways.
“In the conventional clarification process, the primary separation of oil from sludge is
achieved in settling tanks using gravity. For optimum separation, it is first necessary to
dilute the crude oil with hot water to reduce its viscosity. The separation is carried out
using either horizontal or vertical continuous clarifiers. Attempts have been made to use
decanting centrifuges to reduce the amount of water added to the press liquor to achieve
efficient oil clarification” (Weng and Kandiah, 2007)
In order to cope with that problem, the use of three phase decanters and special two-phase
decanters are suggested. However, the latter (such as ECO-D) give better results
(Schuchardt, Wulfert, Darnoko, Herawan, 2007; Weng and Kandiah, 2007):
“The use of a three-phase decanter makes oil clarification and separation of the suspended
solids concurrently possible. If press liquor is used as the feed to a three phase decanter, it
is possible to replace both the clarification tank and sludge centrifuge. This not only
reduces the amount of water needed to facilitate oil clarification significantly, but also
greatly simplifies the clarification process. Nevertheless, the oil loss was observed to be
higher than with the conventional process. Nowadays, three-phase decanters are normally
used in large capacity mills, with or without sludge separators, for treating the underflow
from the clarification tank. As in the case of two-phase decanters, no significant reduction
in the amount of POME is achievable since primary oil/sludge separation using
clarification tanks is still needed. The use of a special two-phase decanter that makes
possible oil/sludge separation using a zero-dilution clarification process has recently been
tested. Unlike other two-phase decanters that focus on separating out the suspended solids,
this decanter’s main function is to achieve efficient oil/sludge separation. The decanter
does not have the drying zone found in a typical decanter. The amount of POME can be
reduced to about 0.4 tons per ton of FFB processed in a mill using the new clarification
process. No settling tanks are required in the new process” (Weng and Kandiah, 2007)
Minimizing the amount of wastewater through better improvement in clarification systems

will lead to less wastewater needed for composting systems, which makes composting
system become more favourable.
However, there are still long ways to go with composting. The main problem is the
investment cost. For constructing composting facilities alone, it is estimated additional
investment cost around Rp. 12 billions (or US$ 1.2 millions) is needed for the mills with
the capacity of 60 ton FFB per hours in Indonesia. In Malaysia, the capital investment
required for the setting up of these plants and the operating and maintenance (O&M) cost
is approximately RM6 to RM10 per ton FFB processed or around US$ 1.5 – 2.dollars per
ton FFB used and considered still high. Another important drawbacks is the high power
consumption of shredders and compost turners. They often make it necessary to use diesel
engines to supplement the power produced by palm oil mills (Weng and Kandiah, 2007).
Thus, the composting creates demand for more energy in palm oil mills that will stimulate
the utilizing of excess shells and fibres in palm oil mills by constructing additional boilers.
Weng and Kandiah (2007) suggest further improvement for oil palm mills as follows:
• Research in shortening the time needed for the composting process and different
approach for the treatment of EFB and POME especially in combination with the ECO-
D or similar 2-phase decanter system.
• Upgrading and modifying biological effluent treatment to capture and utilize the
methane generated efficiently.
• Continuing research including taking a re-look at some of the earlier R&D efforts in
this area, to develop a viable high rate anaerobic process for the mill effluent where the
production of methane will be more than adequate to power the mill, freeing the
conventional energy sources, such as fibre and shell, for other applications, to enable
these to become high value products.
• Exploring the opportunities for an integrated approach based on a central power plant
providing power to the palm oil mill and other downstream facilities such as refinery,
kernel crushing plant and bio fuel plant and sharing the vision that a modern palm oil
mill should not only be a hygienic and efficient producer of high quality palm oil and
palm kernel, but should also evolve into a multi-product plant where EFB, fibre and
shell are transformed into products with high market values.
Figure 2.6. Example of new environmental friendly process in palm oil mill (Weng and
Kandiah, 2007)
$
Hassan, Yacob, Busu and Shirai (2007), Ling-Hoak., Wai-Cheong, Khoon-San., Zain,
Yacob, and Visuvalingam (2007) and also Buron, Hashib, Frappe, Ghennam (2007) had
discussed in detail several alternatives of biomass and biogas utilizations for CDM projects
in Malaysia. The proposed projects usually comprise of biogas utilization from POME
treatment and composting EFB with the help of POME or the use of shells and fibres for
biomass. Dit (2007) also explains the economic and environmental potential of (palm
kernel) shells as the biomass alternative to reduce greenhouse gas emissions in one cement
manufacture plant. The potential of biomass and biogas energy can be found in appendices.
In Indonesia the efforts to reduce methane emissions with or without composting had been
developed for several years (Schuchardt, Wulfert, Darnoko, Herawan, 2007) but still are
not attractive enough for most of the mills. It is estimated that less than 20 mills (4%) in
Indonesia apply composting and/or methane utilization out of around 500 mills estimated
this year. The rest still rely on the conventional WSP treatment and EFB application to the
field. One of the latest efforts to capture methane from POME are planned to be
implemented in several mills in Sumatera
(http://cetak.kompas.com/read/xml/2008/11/25/01244165/bakrie.dan.aes.corporation.kerja.
sama.cdm , 25 November 2008)
The concept of composting is to moisturize empty fruit bunch (EFB) by periodically

spraying wastewater from the pond to the compost heaps/windrows so that theoretically
almost all of the volume of wastewater can be utilized (Schuchardt, Wulfert, Darnoko and
Herawan, 2007; Chiang, 2004). However, in the field wastewater ponds are still needed in
most cases because rainfall must be considered into the design, and also some storage
ponds are needed. Therefore wastewater pond design for composting must consider:
a. Type of decanter or oil extraction system used in the mill
b. Rainfall intensity
c. Rainfall intervals (how many consecutive days)
d. Maximum mill processing capacity
Based on my own experience in improving the design of wastewater pond in a mill with
EFB composting plant in Riau, Indonesia and also the results of my experience in
*
composting plant station of IOPRI, rainfall intensity and intervals are the main factors to
be considered for design. Because most oil palm plantations are situated in areas with high
rainfall intensity (because of the agro climatic suitability of oil palm), it is very hard to
meet zero waste condition. At least the volume of wastewater to be discharged to the river
(or irrigated to the field) is minimized.
2.3.Methane Emission Estimation from Palm Oil Mills in Indonesia, Scenario

Forecasting and Backcasting
From table A.4 in the Appendices the average capacity of Indonesian Palm Oil Mills is 31
tons FFB/hour and there are 437 mills in 2006. It is assumed to be 440 mills in operation
by the end of 2008 or the beginning of 2009, because the total national production remains
almost the same from 2006 – 2008 which is predicted by table 1.1. From Table 1.1, the
national production of CPO in Indonesia is 17 000 thousands tons a year in 2008.
For estimation of the methane emission factors for domestic wastewater with lagoon
systems, we can refer to IPCC Guidelines 2006 Volume 5 Chapter 6. For palm oil mill
effluent (POME), the estimation of CO2 equivalent of methane emission from POME is
referring to the latest research in South East Asia by Reijnders and Huijbregts, 2008, which
is shown in Table 2.1. From the table, it is assumed for Indonesia that each ton of produced
crude palm oil is responsible for the emission of 0.20 ton CO2-equivalent of methane.
-
Table 2.1. Emissions in CO2 equivalent associated with net losses due to plantation
practices, the use of fossil fuels in the palm oil life cycle and anaerobic
conversion of palm oil mill effluent
Emission in ton CO2 equivalent per

ton of palm oil
Emission of CO2 due to the use of fossil fuels 1
Emission of biogenic CO2 due to plantation 1.5 – 5.8
practices on non-peaty soils
Emission of biogenic CO2 due to plantation 9 – 17
practices on peaty soils
Emission of CH4 linked to anaerobic conversion 0.16 – 0.24
of palm oil mill effluent
Sources: Reijnders and Huijbregts, 2008
If it is assumed that only 30 mills or 6.8 % of total mills reduced its methane emissions.
About two thirds of the mills which use methane emissions reductions will use composting
methods and one thirds will choose biogas utilization from POME. The composting
methods is assumed with the average efficiency of 50% (because in reality most of the
mills with composting facilities in Indonesia still use waste stabilisation ponds to deal with
the rain and as the buffer ponds).
Total Methane emissions (m3) = TME

TME = (100 – (2/3*6.8%*50% + 1/3*6.8%*100%) % x 17 000 thousands ton CPO x
0.20 ton CO2-equivalent/tons CPO
= 30 666 ton CO2-equivalent methane emissions in the beginning of 2009
(
Table 2.2. Splicing Techniques and Trends Prediction (IPCC, 2006)
Guide for splicing data and trend predictions for greenhouse gasses is suggested by IPCC
(2006) in table 2.2. However, due to lack of data availability in Indonesia, in this thesis, in
order to make trend predictions and provide base scenario (business as usual), we assume
that the average increase in production of CPO from 2009 onward is maximal at only 3.3
% annually until 2020 based on the projection from Directorate of Estate Crop, Indonesian
Department of Agriculture and IOPRI, 2007 (table A.6 in the Appendix) a year and also
based on prediction due to the unpredicted price fluctuation of crude palm oil, decrease of
new plantation opening rate, land availability, bio fuel demand and new mature plants
available.
The scenario building in this thesis is using combination of back casting of desired future
to the current situation and forecasting the future from current situation. Due to the
limitation of forecasting methods, in this thesis the emphasis will be put on backcasting.
Table 2.3. Comparison between Forecasting and Backcasting (Dortmans, 2004)

Forecasting Backcasting
Philosophical view Causality; determinism; Causality and teleology;

context of justification partial indeterminacy;
context of discovery
Perspective Dominant trends; likely Societal problems in need

futures; possible marginal of solutions; desirable
adjustments; how to adapt futures; scope for human
to trends choice; strategic decisions;
retain freedom of actions
Approach Extrapolate trends into the Define interesting futures;

future; sensitivity analysis analyze consequences, and
conditions for these futures
to materialize
Methods Various econometric Partial and conditional

models extrapolations;
highlighting interesting
polarities and
technological limits
Techniques Various mathematical Not specified

algorithms
Source: Dortmans, 2004
While needed, to provide more connected analysis, migration landscapes are developed for
several scenarios to create a bridge between forecasting and backcasting techniques.
Illustration of migration landscapes is figure 2.7 below, taken from Dortmans, 2004.
Figure 2.7. Illustration of Forecasting, Backcasting and Migration Landscapes
Source: Dortmans, 2004
The main point of discussion both in forecasting and backcasting analysis is the transition
management, which also will be discussed in Chapter 4.
Chapter 3
3.1. Simple Forecasting

The production of palm oil is predicted to increase linearly by 3.3 % annually from 2009
until 2020 based on the projection from Directorate of Estate Crop, Indonesian Department
of Agriculture and IOPRI, 2007 (table A.6 in the Appendix) and also based on prediction
due to better planting material, expansion, conversion from other crops, and increasing
demand for bio fuel markets and also demand from China and India. However, land
availability will decrease and probably no land will be available for expansion after 2020.
The contribution of production increase is mainly expected from better planting material,
the use of clone palms and improvement in smallholder’s plantation productivity. After
2020, the production will gradually become steady state. The industry must rely on
breeding research afterwards, the key towards their sustainability. Breeding research will
not only search for more productive planting material, but also more pathogen and pest –
resistant planting material. Genetic engineering will play an important role in the future.
High investment and maintenance cost for composting facilities and also biogas utilization
facilities will deter the shift to these cleaner technologies. Excess of power in palm oil mill
also make the use of biogas utilization facilities unattractive. Most of the mills are situated
in sparsely populated area and if biomass utilization for energy is implemented, the mills
must create demand for this energy in its surrounding area. However, export oriented mills
must gradually upgrade themselves to meet the demand from the market for sustainable
products. Composting will be more favoured because needs less investment than methane
capturing facilities, and also it will be easier to construct and maintain. Domestic market
and certain importer countries also do not demand for specific environmental friendly
products. However, the attitude towards cleaner technology will also be influenced by the
action of others (free – riders problem) and also government policy. People will wait for
“the success story” of composting and consider the effect to the cost of production in palm
oil mills or additional income generated from it. The prospect of economic benefit of
composting will be the most important driving force in business decision making of the
mills owners.
Transition management towards cleaner technologies must be better prepared not only by
the government and the industry, but also other stakeholders such as smallholders,
environmental NGO, and research institute. This will be at the heart of this thesis
discussion and will be analysed and described in detail at Chapter 4.
Four scenarios will be developed for forecasting methods to predict the methane emissions
from 2009 – 2020:
a. Business as usual
b. Moderate Scenario
c. Optimistic Scenario
d. Very optimistic Scenario
Assumptions for each scenario are described in table 3.1. General assumptions used to
make the prediction are as follows:
• The increase of CPO productions is estimated constant 3.3 % every year from 2009 -
2020
• The mills number increase proportionally to the increase of CPO productions from
2009 – 2020. The number of mills that extend its processing capacities will be balanced
by the number of mills built with smaller capacities in certain areas.
• About two third of the mills which use methane emissions reductions will use
composting methods and one third will choose biogas utilization from POME.
• The composting method is assumed with the average efficiency of 50% (because in
reality most of the mills with composting facilities in Indonesia still use waste
stabilisation ponds to deal with the rain and as the buffer ponds).
• Mills which use methane utilizations or biogas flaring are assumed to produce no
methane emissions
Table 3.1. Assumptions on Each Scenario
Assumptions Business as usual Moderate Optimistic Very Optimistic/ Ideal

(comments) (comments) (comments) (comments)
% of new mills per year to choose 10 33.3 40 60
composting or biogas utilizations
% of old mills per year to choose 1 2 3 5
composting or biogas utilizations
Business Climates, Market and The market does not push The bio fuel market creates The bio fuel market creates Ideal condition.
Green Consumerism much on green consumerism. more pressure to the industry more pressure to the The price of palm oil
There are plenty of markets due to green consumerism, industry due to green steadily increases every year
with no restrictions or especially for export market. consumerism, especially for Many palm oil mills
demand for non However, majority of the export market. increase their environmental
environmental friendly market will not demand Increasing demand from bio standard to meet the ‘special
products. ‘special environmental fuel market keep the price of requirement’ from bio fuel
Huge investment for requirements’. palm oil stable market
composting and biogas Huge investment for Strong green consumerism Strong green consumerism
capturing deter the composting and biogas awareness emerges in local awareness emerges in local
favourability towards cleaner capturing deter the market and in China and market and in China and
production. favourability towards cleaner India. India.
production. RSPO certification is the Majority of the market will
barrier to enter certain demand ‘special
market such as Europe environmental
However, majority of the requirements’. and non
market will not demand environmental friendly
‘special environmental products will be sold at
requirements’. discounted price
Technology and Research Support Limited research supports Strategic cooperation in Strong research supports Ideal condition.
from the government for research with Malaysia. from the government. Joint implementation of
specialized research body and A number of mills get Strategic cooperation in methane reduction with
universities. additional financial security research with Malaysia. developed countries is
through CDM projects Certain amount of taxes campaigned successfully to
Assumptions Business as usual Moderate Optimistic Very Optimistic/ Ideal
(comments) (comments) (comments) (comments)
from palm oil industry is support the program in
collected in special account reducing the cost of
and regularly dedicated for investment.
funding research. Certain amount of taxes
A number of mills get from palm oil industry is
additional financial security collected in special account
through CDM projects and regularly dedicated for
funding research.
Environmental Initiatives RSPO and PROPER are Pressure from the market Pressure from the market RSPO and PROPER are
considered needed only for makes more mills register for makes more mills register considered as a need for
the certain exporters RSPO and PROPER for RSPO and PROPER entering the market
certifications certifications
Many environmental NGO are Many environmental NGO
still aggressively put negative are still aggressively put
campaign towards palm oil negative campaign towards
palm oil
Government Law and Policy The government policies stay The government decree more The government decree The government decree
the same use of certain amount of palm more use of certain amount more use of certain amount
oil based methyl ester as of palm oil based methyl of palm oil based methyl
substitute for diesel oil in order ester as substitute for diesel ester as substitute for diesel
to keep the price stable. oil in order to keep the price oil in order to keep the price
Fiscal incentives for new stable. stable.
investment of palm oil with Fiscal incentives for new Fiscal incentives for new
environmental friendly and investment of palm oil with investment of palm oil with
cleaner technology environmental friendly and environmental friendly and
cleaner technology cleaner technology
$
Table 3.2. Estimated Emissions Rate For Business as Usual Scenario
Year Number Increase Estimated Total No of mills No of mills Total % of Estimated Total % increase
of mills number of mill CPO Output with with methane total mills Methane Emissions from 2009
from previous year (thousands tons) composting capturing (thousand tons emission
facilities facilities CO2 equivalent)
2009 440 17000 20 10 30 6,8 3245
2010 456 16 17562 24 12 36 7,9 3328 2,53
2010 472 16 18143 28 14 42 8,9 3412 5,15
2011 488 17 18742 32 16 48 9,9 3500 7,85
2012 505 17 19362 37 18 55 10,9 3591 10,65
2013 523 18 20002 41 21 62 11,8 3685 13,53
2014 541 18 20663 46 23 69 12,7 3782 16,52
2015 560 19 21346 51 25 76 13,6 3882 19,60
2016 579 19 22051 56 28 84 14,5 3985 22,79
2017 600 20 22780 61 31 92 15,3 4092 26,08
2018 620 21 23532 66 33 100 16,1 4202 29,49
2019 642 21 24310 72 36 108 16,8 4316 33,00
2020 664 22 25113 78 39 117 17,6 4434 36,63
*
Table 3.3. Estimated Emissions Rate for Moderate Scenario
2009 440 17000 20 10 30 6,8 3245 0
2010 456 16 17562 29 15 44 9,6 3287 1,27
2010 472 16 18143 39 19 58 12,4 3329 2,58
2011 488 17 18742 49 24 73 15,0 3374 3,95
2012 505 17 19362 59 30 89 17,5 3419 5,36
2013 523 18 20002 70 35 105 20,0 3467 6,83
2014 541 18 20663 81 40 121 22,4 3516 8,35
2015 560 19 21346 92 46 138 24,7 3567 9,92
2016 579 19 22051 104 52 156 26,9 3620 11,54
2017 600 20 22780 116 58 174 29,0 3675 13,23
2018 620 21 23532 129 64 193 31,1 3731 14,97
2019 642 21 24310 142 71 212 33,1 3790 16,78
2020 664 22 25113 155 77 232 35,0 3851 18,64
-
Table 3.4. Estimated Emissions Rate for Optimistic Scenario
2009 440 17000 20 10 30 6,8 3245 0,00
2010 456 16 17562 33 16 49 10,8 3258 0,40
2010 472 16 18143 46 23 69 14,7 3272 0,82
2011 488 17 18742 60 30 90 18,5 3286 1,26
2012 505 17 19362 74 37 112 22,1 3301 1,72
2013 523 18 20002 89 45 134 25,6 3317 2,21
2014 541 18 20663 105 52 157 29,0 3333 2,71
2015 560 19 21346 120 60 181 32,3 3351 3,24
2016 579 19 22051 137 68 205 35,4 3368 3,79
2017 600 20 22780 154 77 231 38,5 3387 4,36
2018 620 21 23532 171 86 257 41,4 3406 4,96
2019 642 21 24310 190 95 284 44,3 3427 5,58
2020 664 22 25113 208 104 312 47,0 3447 6,22
(
Table 3.5. Estimated Emissions Rate for Very Optimistic Scenario
2009 440 17000 20 10 30 6,8 3245 0,00
2010 456 16 17562 41 20 61 13,5 3197 -1,49
2010 472 16 18143 62 31 94 19,9 3148 -3,01
2011 488 17 18742 85 42 127 26,1 3097 -4,57
2012 505 17 19362 108 54 162 32,0 3045 -6,17
2013 523 18 20002 132 66 198 37,8 2992 -7,82
2014 541 18 20663 157 78 235 43,4 2937 -9,51
2015 560 19 21346 182 91 273 48,8 2881 -11,24
2016 579 19 22051 209 104 313 54,0 2823 -13,03
2017 600 20 22780 236 118 354 59,0 2763 -14,87
2018 620 21 23532 264 132 396 63,9 2702 -16,76
2019 642 21 24310 294 147 440 68,6 2638 -18,70
2020 664 22 25113 324 162 486 73,1 2573 -20,71
Comparison of Total Emissions of Methane from Four Scenarios
40,00
Percentage of Methane Emissions Increase
30,00
20,00
Business As Usual
from 2009
10,00
Very Optimistic
Optimistic
0,00
Moderate
-10,00
-20,00
-30,00
1 2 3 4 5 6 7 8 9 10 11 12 13
Year (year 1 = year 2009)
Comparison of Total Emissions of Methane from Four Scenarios

5000
4500
4000
(in thousand tons CO2-equivalents)
3500
Total Methane Emissions
3000 Business As Usual

Very Optimistic
2500
Optimistic
2000 Moderate
1500
1000
500
0
1 2 3 4 5 6 7 8 9 10 11 12 13
Figure 3.1. Comparison of Four Scenarios in Total Emissions

Note: calculation based on emission of 1 kg methane = emission of 24.5 kg CO2 equivalent
(Reijnders and Huijbregts, 2008)
Percentage of Mills with Composting and Biogas Utilization from POME from Four Scenarios
80,0
70,0
60,0
50,0 Business As Usual

Very Optimistic
40,0
Optimistic
Percentage of Mills
Moderate
30,0
20,0
10,0
0,0
1 2 3 4 5 6 7 8 9 10 11 12 13
Number of Mills with Composting and Biogas Utilization from POME from Four Scenarios
600
500
Number of Mills
400
Business As Usual
Very Optimistic
300
Optimistic
Moderate
200
100
1 2 3 4 5 6 7 8 9 10 11 12 13
Figure 3.2. Comparison of Four Scenarios in Number of Mills

3.2. The Desired Futures-Backcasting Analysis
In order to achieve methane gas emission reduction, several factors may be taken into
consideration. In order to make the plan attractive, the palm oil industry policy-makers
must see the benefit of it. Therefore, each option to be developed must directly or
indirectly show the potential economic benefit of methane gas emission reduction. In this
thesis, it is expected that the methane gas emission reduction can be achieved through:
1. Minimizing the oil losses and wastewater generation from palm oil mills by the use of
eco-decanter or better technology and at the same time utilizing the wastewater by
composting
2. Extending economic activities in plantation settlement so that this will increase energy
demand and promoting efficient energy utilization from various sources in palm oil mill
and indirectly make the plan to utilize biogas from anaerobic wastewater treatment
become more favorable.
For the back casting tools, desired future states in 2020 are:
1. Composting EFB by using wastewater as moisturizer and nutrient addition and also the
use of eco-decanter or better technology is implemented in 33% of the mills. We will
define this as “The Agro Complex Scenario”. This scenario is almost parallel with the
optimistic scenario in forecasting method for the case of composting.
2. High energy utilization in palm oil mills, most methane and biomass are utilized for
energy. Twenty percent of the mills implement this scheme. Almost forty percent of the
workers families who live in the plantation settlement have other small – medium
business at home as other sources of income. We will define this as “Energy Mania
Micro Business Complex Scenario”. This scenario is almost parallel with the optimistic
scenario in forecasting method for the case of methane utilizations.
3. A gradually cleaner industry of oil palm with 75% environmental friendly palm oil
mills. We will define this as “A Eco Business Plantation Complex Scenario”. This
scenario almost parallel with the very optimistic scenario in forecasting method.
The scenarios will be analyzed by taking several factors into consideration: The factors are
technology and research support, government law and policy in environment, investment
and business climate, culture and society, infrastructure, market and green consumerism
and environmental initiatives (RSPO and PROPER). The framework for backcasting
analysis is in Tabel 3.6
Tabel 3.6. Framework for backcasting analysis

Changes Needed or Current Desired Future Strategy Main Actor or
Necessary Situation Stakeholder
Involved
Technological
Changes
Culture and society
Market and Green
Consumerism
Infrastructure
Research Support
Environmental
Initiatives
Government Law
and Policy
Tabel 3.7. The Agro Complex Scenario
Changes Current Situation Desired Future Strategy Main Actor or
Needed or Stakeholder
Necessary Involved in
Indonesia
Technology and Composting of EFB is begun to be Efficient design in integrated Research fund is allocated every year by IOPRI (Indonesian Oil
Research Support applied by more palm oil mills in composting and wastewater the government research body or private Palm Research
Indonesia and other countries. The management. research institute in cooperation with Institute)
main problem is how to deal with Most of palm oil mill used eco- universities. Private Research
rainfall and also better integrated decanter or better technology. Research oil extraction and separation Institute
design for mill oil extraction. Amount of effluent produced is technology is intensified by more PhD Department of
The use as eco-decanter is not widely reduced to 75% of current researches in those field supported by local Agriculture, Indonesia
applied in palm oil mill. situation. Automated process in universities, governmental research body
Automated control in palm oil palm oil mill and also the industry
operation is not widely used. More PhD researches about composting
and wastewater treatment process and also
market research in the first five years to
enhance the understanding of the process
and market strategy.
Culture and Indonesian people views compost as Compost from EFB is mainly used Campaign to introduce the benefit of EFB Palm Oil Producers
society fertilizer substitute but the compost by horticulture and rice field. The compost to the people is intensively done Association
from EFB is still widely unknown. image of sustainable industry for in the first five years. Department of
The perception of people outside the oil palm is enhanced by the widely Palm oil producers also support the Agriculture, Indonesia
plantation towards palm oil mill is used by-products. campaign of organic products nearby.
influenced by the image of the People views the EFB compost is Increasing the awareness of the people to
effluent produced. an example of the eco-friendliness use organic products also helps increase the
Campaign to introduce the by- of palm oil industry. demand for EFB compost.
products of palm oil mill is not People view the mill process and Awareness of the people is increased
intensively done by the association operation as an example of cleaner through intensive campaign. Several
of palm oil producers technologies and continuous websites dedicated for the campaign of the
Indonesia
improvement sustainability of Indonesian palm oil
People can access popular industry is established in the first five
knowledge of composting process, years.
benefit, where to buy and several
websites on line.
Infrastructure Using current infrastructures for Reliable infrastructures to support Infrastructure planning is part of the Palm Oil Producers
harvesting fruit and transporting supplying compost products to integrated compost marketing plan Association
palm oil. various market Department of
Agriculture, Indonesia
Market and Green Most of the mills use the compost for A stable market for the compost Increasing the awareness of the people Palm Oil Producers
Consumerism their own plantation purposes such as product. About 75% of the through several media campaign and Association
returning back to the field as soil compost is sold to the market and demonstration plot in horticulture and rice Department of
amelioration agent or being used in used by other agricultural sectors. cultivation. Agriculture, Indonesia
oil palm nursery. Researches support in composting and
processing technologies as well as finding
effective campaign strategies to increase
positive image of the industry.
The industry also supports the organic
agriculture in horticultural products and
other agricultural products in order to
create indirectly more demand for EFB
compost.
Environmental Implementation of RSPO Principles Amount of by-products used or Integrating the implementation of RSPO Assessment Body,
and Criteria needs continuous plan at sold is one of the criteria for and PROPER principles and criteria Indonesian Ministry
Initiatives
least at (RSPO, 2008): assessment in RSPO and PROPER assessment and also introducing by-product of the Environment,
• Reduction in use of certain market capitalization as additional criteria RSPO organization,
chemicals (criterion 4.6). for assessment or ranking Palm Oil Industries,
$
Indonesia
• Environmental impacts (criterion Technology audit as part of RSPO and Environmental NGO
5.1). PROPER criteria assessment
• Waste reduction (criterion 5.3).
• Pollution and emissions (criterion
5.6).
• Social impacts (criterion 6.1)
PROPER criteria (Indonesian edible
oil industries) for green and gold
categories has included energy
efficiency and greenhouse gases
reduction program for assessment
Government Law No fiscal policy as incentive to Compliance to environmental law Reducing the custom fee for imported Department of
cleaner technology in palm oil mill. and environmental initiatives machinery, material and spare part needed Finance, Indonesia
and Fiscal Policy
PROPER criteria are included as one (RSPO and PROPER) by at least to build compost plant and also wastewater Ministry of The
of the bank criteria for assessing 80% of the mills. treatment facilities. Environment,
credit feasibility. PROPER and RSPO criteria is Promote the local industry to produce Indonesia
No tax exemption for importing or maintained and used continuously better machinery and technological transfer
producing better technology that as part of debtors feasibility through incentives. Lowering the tax to
reducing waste assessment by bank. stimulate the growth of local industry
Tax or custom incentive for better
foreign technology sold in
Indonesia that sold in technological
transfer agreement with local
industry or research institute
*
Tabel 3.8. The Energy Mania Micro – Business Complex
Indonesia
Technology and Only excess of power generated from Most of the biomass as by product Enhancing current research in biomass IOPRI (Indonesian Oil
Research Support boiler is utilized to supply electricity of the mill process is utilized to utilization for energy Palm Research
to the settlement. Most of the produce energy and supplied to the Institute)
biomass is not used to generate settlement Private Research
electricity Institute
Department of
Agriculture, Indonesia
Culture and Only workers and their families live Various economic activities based Stimulate the marketing campaign for the Palm Oil Producers
society in the settlement. Other economic on palm oil industry by products products those use oil palm residue or by Association
activities are motorcycle taxi drivers are run by workers family. It will products in order to create demand. Department of
(tukang ojek) and small shop selling promote the optimization of energy Increasing the positive image of the small Agriculture,
daily needs use in palm oil mill and also make industry based on oil palm by products Indonesia,
the option of biogas utilization through intensive campaign Department of
from wastewater treatment become Finance, Indonesia
more favorable that many other
mills will be attracted to follow this
model. As the population becomes
more prosperous, people also will
need amusement or recreation. The
existing wastewater pond can be
modified and improved to make a
-
Indonesia
pleasant place for recreational
fishing. Also, this will support
High Conservation Value area
design in oil palm plantation as
part of RSPO principles and
criteria implementation so that the
site later can be used as
recreational site or even place for
student in settlement area for
studying biology and related
subjects.
Infrastructure Most of the mills are situated far Electricity demand for local Creating demand for more energy by Palm Oil Producers
from common settlement; electricity industry in the settlement is stimulating small scale industrial growth in Association
transmission from the mill is directed fulfilled by the mill. workers settlement Department of
to the workers settlement. Eco-friendly micro business Integrated domestic and mill effluent Agriculture, Indonesia
complex in the settlement treatment to produce electricity (from
biogas) supplied to local industries in
settlement
Eco – friendly infrastructures in the
settlement
Market and Green Several products are made in the A stable market for oil palm based Stimulate the marketing campaign for the Palm Oil Producers
Consumerism settlements such as broom from oil product produced by the workers products those use oil palm residue or by Association
palm frond family in the settlement products in order to create demand. Department of
Increasing the positive image of the small Agriculture, Indonesia
industry based on oil palm by products
through intensive campaign
(
Indonesia
Environmental Implementation of RSPO Principles Social impacts of RSPO also Implementation of Corporate Social Assessment Body,
and Criteria needs continuous plan at include Corporate Social Responsibility through stimulating Indonesian Ministry of
Initiatives
least at (RSPO, 2008): Responsibility business activities in the settlement the Environment,
• Reduction in use of certain Integrating the implementation of RSPO RSPO organization,
chemicals (criterion 4.6). and PROPER principles and criteria Palm Oil Industries,
• Environmental impacts (criterion assessment and also introducing by- Environmental NGO
5.1). product market capitalization as additional
• Waste reduction (criterion 5.3). criteria for assessment or ranking
• Pollution and emissions (criterion Technology audit as part of RSPO and
5.6). PROPER criteria assessment
PROPER Criteria for gold or green
rank also include Corporate Social
Responsibility as part of assessment
Government Law No fiscal policy to stimulate business Pro small business policy of the Stimulate the marketing campaign for the Department of
growth in plantation settlement government in the plantation products those use oil palm residue or by Finance, Indonesia
and Fiscal Policy
settlement in order to provide more products in order to create demand. Ministry of The
jobs and increase wealth Increasing the positive image of the small Environment,
industry based on oil palm by products Indonesia
through intensive campaign Department of
Supporting the development of the small Industry, Indonesia
business in the settlement by providing
soft loan to the entrepreneur.
Reducing the custom fee for imported
machinery, material and spare part needed
for cleaner technology.
Promote the local industry to produce
Indonesia
better machinery and technological transfer
through incentives. Lowering the tax to
stimulate the growth of local industry
Tabel 3.9. The Eco Business Plantation Complex

Indonesia
Technology and Only excess of power generated from Most of the biomass as by product Enhancing current research in biomass IOPRI (Indonesian Oil
Research Support boiler is utilized to supply electricity of the mill process is utilized to utilization for energy. Palm Research Institute)
to the settlement. Most of the produce energy and supplied to the Priority budget of governmental Private Research Institute
biomass is not used to generate settlement. research fund for this sector Department of
electricity New mills are designed with zero Agriculture, Indonesia
waste concepts
Culture and society Only workers and their families live Plantation and the mills is new Stimulate the marketing campaign for Palm Oil Producers
in the settlement. Other economic centre of economic growth and also the products those use oil palm residue Association
activities are motorcycle taxi drivers a place for learning and recreation. or by products in order to create Department of
Indonesia
(tukang ojek) and small shop selling New towns evolve from plantation demand. Agriculture, Indonesia
daily needs settlements Increasing the positive image of the
small industry based on oil palm by
products through intensive campaign
Infrastructure Most of the mills are situated far Electricity demand for local Creating demand for more energy by Palm Oil Producers
from common settlement; electricity industry in the settlement is stimulating small scale industrial Association
transmission from the mill is directed fulfilled by the mill. growth in workers settlement Department of
to the workers settlement. Eco-friendly micro business Integrated domestic and mill effluent Agriculture, Indonesia
complex in the settlement treatment to produce electricity (from
biogas) supplied to local industries in
settlement
Eco – friendly infrastructures in the
settlement
Market and Green Several products are made in the A stable market for oil palm based Stimulate the marketing campaign for Palm Oil Producers
Consumerism settlements such as broom from oil product produced by the workers the products those use oil palm residue Association
palm frond family in the settlement. or by products in order to create Department of
A stable market for the rest of demand. Agriculture, Indonesia
goods produced by the settlements. Increasing the positive image of the
Environmental Implementation of RSPO Principles RSPO and PROPER principles and Implementation of Corporate Social Assessment Body,
and Criteria needs continuous plan at criteria implementation become Responsibility through stimulating Indonesian Ministry of
Initiatives
least at (RSPO, 2008): ‘compulsory’ business activities in the settlement. the Environment,
• Reduction in use of certain Strict environmental audit for RSPO RSPO organization,
chemicals (criterion 4.6). and PROPER criteria assessment. Palm Oil Industries,
• Environmental impacts (criterion Environmental NGO
5.1).
Indonesia
• Waste reduction (criterion 5.3).
• Pollution and emissions (criterion
5.6).
PROPER Criteria for gold or green
rank also include Corporate Social
Responsibility as part of assessment
Government Law No fiscal policy to stimulate business New mills to be opened are Strong environmental law that Department of Finance,
growth in plantation settlement designed with zero – waste/waste regulates all new mills are to be Indonesia
and Fiscal Policy
minimization designs opened with zero waste/waste Ministry of The
Pro small business policy of the minimization designs. Environment, Indonesia
government in the plantation Fiscal policy to stimulate greener Department of Industry,
settlement in order to provide more industry Indonesia
jobs and increase wealth RSPO and PROPER principles and
Lower taxes for greener industry criteria implementation become
‘compulsory’
Stimulate the marketing campaign for
the products those use oil palm residue
or by products in order to create
demand.
Increasing the positive image of the
Supporting the development of the
small business in the settlement by
providing soft loan to the entrepreneur.
Figure 3.3. Agro Complex Scenario
Figure 3.4. Energy Mania Micro – Business Complex Scenario
Figure 3.5. Eco Business Plantation Complex Scenario
$
Chapter 4
4.1. Forecasting Discussion
4.1.1. Business as Usual Scenario

The success of the implementation of composting or methane utilization program in
Indonesia will heavily depend on the success story of previous implementation. If there is
no ‘better incentives’ or no difference in financial or market achievement between the
‘business as usual’ mills and the ‘eco-friendly’ mills, the tendencies towards cleaner
production become less favourable.
The bio fuel market is considered playing a key role in shifting the tendencies towards
cleaner industry. The driving factor for CPO price increase is the greater expectation in the
increase of demand from the bio fuel market. This phenomenon contributes to the increase
in oil palm price before the global recession in the end of 2008. However, the decrease of
petroleum price also leads to the decrease in CPO price. The most important trading
partner of Indonesia is China and India, the major export destination, where most of the
demand from both countries is the use of CPO as raw material for cooking oil. The demand
for bio fuel is expected to come from European market. As long as this pattern of demand
for Indonesian CPO does not change, the business as usual scenario will be likely to
happen.
Government is considered as the leading or key actor in environmental change in

Indonesia. Despite better initiatives through PROPER, the orientation of the industry is still
how to meet minimum requirements from the regulatory environmental standards.
Research support is limited compared to Malaysian budget. The effectiveness of RSPO
certification and environmental NGO pressure will mainly depend on which market is the
main destination of export.
*
4.1.2. Moderate, Optimistic and Very Optimistic Scenario
As discussed before, transition towards moderate and optimistic scenario will much depend
on which markets the export destinations are. The ‘demand push’ environmental
awareness, supported by pressure from green consumerism and environmental NGO, is the
key of change. The difference between moderate and optimistic scenario will much depend
on the market share of the export. Furthermore, the demand for compost and biogas ‘must
be created in the field’; to make the plan of methane gas utilization is practically more
reasonable. The rate of increase of the success stories in cleaner production
implementation in terms of biogas from wastewater or EFB composting will also make a
different story for the moderate and optimistic scenario.
Strategic cooperation between Indonesian governments is needed for enhancing research in

cleaner technologies. The policies of the government are needed to enhance the use of
CPO as raw material for bio fuel such as using certain amount of blended bio fuel and
petroleum oil for transportation sectors. The trends towards moderate and optimistic
scenario will be also driven by the stability of oil and bio fuel price. Fiscal and tax
incentives are needed to stimulate the shift towards the implementation of cleaner
technologies.
Campaign to introduce the benefit of composting is essential to be done together by all

leading actors involved such as governments, the business association and the RSPO body.
Increasing the people awareness is a very difficult task, especially for households segment
because it depends on many factors such as level of household income, level of education
and social practices. Intensive and continuous campaign is needed towards green
consumerism. Thus, the successful transitions towards moderate, optimistic and very
optimistic scenario depend on the level of intensity and effectiveness of this campaign.
The greater composition of CPO demand from bio fuel and oleo chemical sectors than
cooking oil or food sectors and the stability of oil palm price and bio fuel price will be the
key factors for the trend towards a very optimistic scenario, combined with strong
-
environmental awareness from the consumers in traditional export destinations such as
China, India, and also domestic market in Indonesia. Great pressure from demand side for
environmental friendly products will make RSPO and PROPER certification as
‘compulsory’ for CPO producers in order to gain a piece of cake in the market. The
business climate will follow what markets determine, and strong support from government
is needed in order to stimulate investment in better and clean technologies in palm oil mill
through several fiscal and tax incentives and other policy instruments.
In conclusion, integrated and comprehensive efforts are needed for transition towards
moderate, optimistic and very optimistic scenario.
4.2. Backcasting Analysis
Strategy in detail to pursue each desired future is explained in table 3.7 until 3.9 and figure
until 3.3 until 3.6 in Chapter 3.
For the Agro-Complex scenario, initial effort must be done through creating more demand
for compost product and enhancing research in better oil extraction and separation
technologies. Intensive campaign is needed to create the demand for compost. The level of
success of this scenario depends on how much compost is absorbed by the market. Initial
efforts must be dedicated most in this demand or market creation and research in
enhancing the process of composting. Establishing industry or agricultural practice to
consume the compost such as horticulture nearby the plantation and promoting organic
agriculture can help much in achieving this scenario goal. In environmental assessment,
integration of RSPO and PROPER assessment and introducing by-product market
capitalization as additional criteria and also technology audit as part of both assessments.
Government policies and support are needed to stimulate the use of cleaner technologies
through tax and fiscal policies, and also promoting technology transfer. Also, the
government should support the development of small business in the settlement by
providing soft subsidized loan to the entrepreneur, to attract more people to make a living
within the plantation.
(
For the Energy Mania scenario, initial effort is more focused on creating a demand for the
excess of energy. The biomass is utilized and maximized for energy. Depending on the
type of boiler used, in average Palm Oil Mill with capacity 30 ton FFB/hour (usually one
boiler with capacity average 20 tons steam/hour is operated and one boiler stands by),
almost all the fibre is consumed as fuel for the boiler (Bagus Giri Yudanto, IOPRI
engineer, personal communication) and left the shell and EFB for potential use as energy
source. Of course it is cheaper to invest in new boilers first rather than capture or utilize
methane source from the wastewater. Also, it is easier to operate and maintain this
additional energy plants rather than build a methane capture facilities from the wastewater.
To utilize the excess of energy from burning all the wasted biomass, the mills or plantation
can set up additional unit of Palm Kernel Oil Mills and Refinery Mills (and also supply
electricity to the settlement during the operation hours of the mills). This is the usual
practice. But in this thesis, we focus on creating small home industries nearby the mill
workers settlement.
The settlements in palm oil mill can be divided to the corporate employee housings and the
partner farmer settlements. The plantation are usually divided into several agronomic
divisions each of 1000 hectares or less depending on many factors such as the
characteristics of the landscapes (flat or undulating) and other factors such as soil type
(peat on non peat land) (Pahan, 2007). The requirements of labour per hectares also depend
on several factors, but typically the demand is 0.15 permanent labours per hectare for
mature plant area and 0.08 permanent labours per hectare for immature plant area (Pahan,
2007). The labour compositions are divided into permanent labour and temporary labours
and the composition for low level jobs varies depending on labour availability, the type of
jobs (such as maintenance, weeding, harvesting) and the company policies. Typically the
composition is 70 – 80% permanent labour and 20 – 30% temporary labour (Pahan, 2007).
Permanent labours usually reside in the division settlements but temporary labour can be
recruited from the labour family or relatives (especially for plantation use family
harvesting approach), or be recruited from the surroundings villages and partner farmers
settlements. The settlement for mill workers is situated near the mill. The plantation
provides basic services need such as school, religious facilities, sport facilities, basic health
facilities or even hospital depend on the size of the plantation, and marketplace.
The electricity source is coming from supply from the mills, generator inside the settlement
and supply from state owned electricity company. Mill supply is only effective during the
mill operation hours, because only the excess of power is distributed for the domestic
(plantation) demand. Usually public facilities also situated not far from the mills.
The small home business cluster must be located nearby the mills. Also, the settlement
nearby the mills is upgraded into new ‘town centre’ means that almost all public facilities
are located in this area. Of course the working hours in the cluster much depend on the
working hours of the mills. The initial set up is the additional boilers are operated
separately to create electricity for the small business centre. Standby generator and supply
from state owned electricity company also needed as backup electricity.
The establishment of small home industry cluster must be pushed by the government in
order to make this scenario effective. The government make an initiative that the initial
supply of energy is done by the mills by utilizing the potential biomasses and also biogas
from the mills and sell to the small home industry centre nearby the mills at the same price
with electricity tariff for the households by the state owned Electricity Company. The
collection of the electricity bills is done by the state owned electricity company and the
palm oil mill makes profit from this business. To make the industrial cluster more feasible,
the raw materials must be supplied nearby or within the plantation. This industry can be
based on the utilization of oil palm residues or by products. Efforts must be done to
stimulate the marketing campaign for the products those use oil palm residue or by
products in order to create demand, increase the positive image of the small industry based
on oil palm by products through intensive campaign, support the development of the small
business in the settlement by providing soft loan to the entrepreneur. In this scenario, the
government is the most leading key actor. The objectives are not only utilizing new
energy source, but also create jobs in rural areas in order to decrease the rate of
urbanization and establish new centres of economic growth.
For the Eco-Business Plantation complex, the efforts are tougher than the Energy-Mania
Scenario. All the efforts to achieve the Energy-Mania scenario are included and further
supported by strong environmental law that regulates all new mills are to be opened with
zero waste/waste minimization designs and RSPO and PROPER principles and criteria
implementation become ‘compulsory’. The business and investment climate should be
adjusted by the government for the use of more environmental friendly products and
technology. Campaign to increase the people awareness towards organic products and eco-
friendly products are done more intensively than in Energy Mania scenario.
As discussed before in the forecasting for moderate, optimistic and very optimistic
scenarios, the market shares of bio fuel and the increase of the awareness of the consumer
towards more environmental friendly products are driving factors also for Eco-Business
Complex and Energy Mania scenarios. The effectiveness of those determines which
scenario will likely to happen. The effort should not directly aim towards methane
emission reduction, but more to (re)new(able) energy utilization and new jobs and
economic centres creation.
4.3. Key Actors Analysis, Impact Predictions and Transition Management
There are many stakeholders that involved in these efforts of reducing methane emissions
from palm oil mills wastewater such as the mill owners/the shareholders, the government,
the journalist and the people who live in the settlements. Of course not all stakeholders will
play significant role on those efforts. Key actors are the driving factors towards the
transition.
As discussed before, increasing the awareness of the consumers towards the eco-friendly
products is a difficult task that needs a lot of efforts from various stakeholders. The most
important actors here are the environmental NGOs and also the governments of the
importing countries, which influence the bio fuel and also cooking oil and others oleo
chemical sectors in the importing countries. The government of Indonesia can do such a
campaign through the Ministry of the Environment but the effectiveness will not be
significant compared to the rules of the government from importing countries and the
environmental NGO. The domestic market in Indonesia is much influenced by the level of
average income. For those people who still struggle to fulfil their daily needs with their
income will think about what they could afford to buy first rather than which products is
good for the environment or not. All the scenarios outside the business as usual scenario
depend on the economic growth and the prosperity of Indonesian people. The consumers of
bio fuel market and also the regulating body in the bio fuel market is the determining
factors. They decide what they buy and also their government regulate where to buy the
raw material to produce the bio fuel, but the main actor is their government (because they
decide the rule of the game). The campaign from the environmental NGO is mainly aimed
to ‘educate people’ and increase their awareness towards consistent and continuous
environmental campaign. In Indonesia, the campaign effort is harder because the level of
income and the level of education might be lower from the importing countries. The RSPO
certification effectiveness depends on the requirements and the consumer attitude towards
environmental friendly products in the importing countries, not in Indonesia.
The impacts of the campaign in increasing the awareness of the consumers in importing
countries and the regulation made by the importing countries will indirectly determine
which scenario will fit in the future. In order to save the CPO industry as one of Indonesia
main export commodities, the government of Indonesia and the business association will
negotiate and make their best efforts to reduce such trade barrier.
Research can bridge the transition towards more sustainable palm oil productions. The
importing countries can assist Indonesia in enhancing the transition towards sustainable
industry by aiding the efforts in research and transferring clean technology. The “Joint
Implementation“ in reducing green house gases should be more focused in providing the
best technology economically achievable in the producing countries that the efforts did not
harm the competitiveness of the product in the market.
Creating a success story is the migration landscape for the whole success of the scenarios,
for both in forecasting and backcasting. Intensive effort by leading actors (the government,
business association, RSPO body and other environmental NGO and the plantation owner)
must be done in the initial years in order to create some good examples. The success story
also means better financial condition of the mills that operates the cleaner technologies.
Guarantee of better price and specific market shares for the CPO produced from eco-
friendly producers is the key. The industry will wait the effect of having RSPO
certification to their sale of CPO.
Creating the compost market and small home business complex within the plantation needs
support from the government of Indonesia. Without the government supports, the efforts
will be very difficult due to the infrastructure, policies to stimulate the economic growth
within the settlement in the plantation and the tendency of the mills that will prefer use the
excess of energy for increasing or extending the production complex (such as adding new
downstream processing mill) rather than use it to stimulate growth in the settlement.
Creating compost market means creating demand for the compost, which economic
practices will use compost as their ‘input’ or ‘raw material? Therefore, creating these
supporting industries for compost market is another migration landscape.
Supplying electricity for small business cluster also need supports from the government in
order to stimulate the home industry growth and providing the backup electricity supply
from the state owned electricity company (if the complex is progressing that the mills
cannot supply enough energy or the mills operate under their capacities in processing
FFB). The mills can sell the electricity at certain price below or the same tariff with normal
electricity tariff for the households with some fee for state owned electricity company. By
creating small home industry which relies on the electricity produced by the mills, the
mills will be stimulated to maintain the processing capacities in the mill to the
maximum (in order to produce more biomass as the source of energy). That means
that the harvesting yield of FFB should be maximized. Therefore, they should apply
best agronomic practices for that. This is a good ‘cycle’ because the efforts to
minimize methane emission from palm oil mill wastewater also indirectly means to
increase yield in the field and to ensure the best agronomic practices that will help to
increase the production of Fresh Fruit Bunch and also the CPO production in order
to keep and maintain the processing operation of the mills. This will also enhance the
breeding research in oil palm planting material to search for high yielding material,
pest and disease resistance material and also low input material.
The breeding research is at the top of sustainability efforts of oil palm industry. Searching
for high yield, low input and pest or diseases resistance planting material can accelerates
research in biotechnology and also genetic engineering. High yield palm means more input
for the mills (and more energy can be produced by the mills) and also less land needed to
produce with the same output. Because the conventional breeding research takes long time
to release new planting material in one research cycle (the productive age of oil palm is 25
and to test new planting material usually needs more than 8 years in the field). Genetic
engineering by introducing and enhancing cloned palms to reduce the research time is also
the transition effort. The migration path is by supporting more research fund in genetic and
biotechnology research. The group of environmental NGOs which criticize the oil palm
development in Indonesia should support the efforts to increase oil palm productivity,
especially in planting material research and cleaner technology research. This will shows
their good will towards oil palm sustainability.
A Palm Oil Mill is designed to operate 22 hours a day ideally (which exceeds in peak
harvest month and underachieves in low harvest months). Maintaining their operation
means maintaining the supply of FFB. If the average above 20 hours daily operation is
achieved, the back up electricity from the state owned electricity is not a needed, except if
the small business complex progress fast and need the consumption of more electricity or
in Saturday or Sunday. The mill weekly maintenance operation in Saturday or Sunday can
be considered as the non operating day also for the small home business industry. If there
are enough excess of biomass, these can be used as source of energy.
The program of Corporate Social Responsibility which is promoted by the government of

Indonesia can also include the small business development within the plantation. The
mills/plantation should help the marketing or promotion of the products produced by this
business cluster in order to keep them survives as new economic centre of growth.
The main issue is to create jobs in rural area in order to decrease the pressure of
urbanization. Most of Indonesian money circulates in Java (and 70% is estimated in
Jakarta) and because almost all the oil palm plantation located outside Java (except in
Banten Province of Java), this effort can be considered as promoting equality in
economics and jobs opportunities outside Java.
In conclusion, in this effort, the government of Indonesia is the key actor supported by the
mills/plantations. RSPO certification body may help the efforts by including economic
capacity building as their main criteria.
$
Chapter 5
5.1. Conclusion
The efforts to reduce methane emissions from palm oil mill wastewater treatment can be
achieved through better efficiency in oil extraction and related processes in milling
technologies, composting the EFB with the help of wastewater as moisturizer and also
creating energy demand in the settlements nearby the mills. Composting and harvesting the
energy from the biomass will likely be chosen first rather than utilizing energy from the
biogas due to investment and maintenance consideration. There are several scenarios
developed for these methane reductions and each scenario depends on the market or export
composition of Indonesian CPO and also the green consumerism level in the importing
countries.
Increasing people awareness for environmental friendly products does not mean to give the
decision and the responsibility solely on the people. Driving actors are needed. The key
driving actors are the environmental NGO and the government from the importing
countries. Their decisions and efforts have social, technical and legal implication in
Indonesia palm oil industries.
The driving factors for the transitions are how much the share of the bio fuel and oleo
chemical markets for the export and the level of environmental awareness in the importing
countries. The Indonesian domestic market will not shift towards green consumerism
unless the level of average income of lay-people increase. The environmental awareness of
the consumers of the end products of the oleo chemical such as soap, shampoo and butter
in the importing countries more determine the future of the CPO industry in Indonesia
rather than Indonesian domestic market environmental awareness.
*
The transition needs success story from each promising scenario. People in the industry
will wait if the implementation of methane reduction scenario will directly or indirectly
cause positive impacts on their financial performance and the relative competitiveness of
their products compared to business as usual products. They will also wait whether the
RSPO certification has significant impact on the volume of the export from Indonesia and
Malaysia or not.
The effort of establishing new small home business cluster nearby the mills that need
energy supply from the mills will stimulate the mills and the plantations to maintain their
productivity and increase efficiency in their activity. The continuation of mill operation
heavily depends on the harvest yield. It means that the agronomic practices indirectly
determine the success of methane emission reduction program. This loop or cycle show the
sustainability potential of the Energy Mania and Eco- Friendly scenarios, as well as
optimistic and very optimistic scenarios. Sustainability of wastewater treatment or energy
program also needs sustainability in the upstream practices (agronomy and harvesting).
Research in planting material will play a key to support these efforts.
5.2. Recommendation
For the government of Indonesia as the main decision maker and key actor in
environmental matters, the following steps or efforts are recommended as background
policy:
1. To direct the issue of methane emission reductions to the issue of job providing
and economic improvement outside Java, especially through creating bio based
economy within the oil palm plantation. Several policies can be made in order to
stimulate the development and sustainability of these new centres of economic
growth. Campaign to create the market of this bio based products must be also fully
supported by the government. Providing infrastructures and establishing stable
market for these products will ensure the survival of these new business clusters.
2. To support the fund for the breeding and biotechnology research in order to
compensate the lack of land availability in the future and increase the productivity of
-
the oil palm plantation. Cooperation in research is strongly suggested with Malaysia
as two main producers of oil palm, where 86% of the CPO produced in both
countries.
3. To lobby the importing countries where the oleo chemical and bio fuel industries to
gain support in cleaner technology and breeding research. This will also stimulate
their bio fuel and oleo chemical industry to gain positive image through the use of
environmental responsible raw material. The government also can lobby the hard line
environmental NGOs that criticize much on oil palm development to work together
towards the sustainability of oil palm industry and also to ensure their good will
towards this issue.
4. Supporting the current efforts in composting and methane utilization programs which
are the part of CDM projects or just conventional projects.
5. Creating a new policy for establishing new plantation that new plantation to be
built must also include a plan to build a bio based economy within the
plantation to create jobs not only for the permanent or temporary workers who
work for the plantation company but also create job opportunities for other lay-
people especially the indigenous people or the people who lives surrounding the
area through this bio based economy cluster. Certain tax stimulus is given for
the palm oil mill which utilizes its biomass and biogas to provide energy for this
bio based economy.
Several PhD research through case studies can be directed towards exploring the feasibility
of bio based economy in oil palm plantation as a tool or strategy to equalize the
development inside and outside Java. Each region or case is characterized according to the
land potential, the agronomic and milling practices, surrounding economic potential and
potential market to be developed for bio based economy. The characteristic of
environmental dispute and also social conflict between plantation or mill and the
surrounding people (especially indigenous people) are analysed deeply.
The oil palm plantation must see the real benefit of implementing such cleaner
technologies. The environmental NGOs supported by the government and RSPO body
$(
must promote the success of composting and biomass energy harvesting in several mills in
order to create a good example. If the environmental NGOs want to create green
consumerism towards palm oil based products, the campaign target must be mainly
directed to the consumers in the importing countries, not in Indonesia. Their governments
also play a key role because they can decide the import criteria of CPO. Technology
transfer from developing countries to Indonesia in terms of cleaner technology must be
increased.
The RSPO and PROPER certification can also accommodate this economic capacity
building through bio based economy within the plantation through their assessment as the
indirect efforts for methane emission reduction. This will benefit not only the environment
but also help provide jobs and alleviate poverty that also related to environmental
degradation.
$
Appendices.
Table A.1. Potential energy from oil palm biomass (Chua et.al, 2007)
Biomass % Fresh Fruit Gross Net Kcal/kg

Bunch (FFB) Kcal/kg
Fruit Fibre ( 35 – 40% VM) 14 4,590 2,711
Shell (10 – 12 % VM) 8 5,120 4,500
EFB (45 – 50% VM) 14.5 4,890 1,991
Table A.2. Potential energy from Palm Oil Mill Effluent (Chua et.al, 2007)
% Fresh Fruit Bunch Biogas to FFB Kcal/NM3

(FFB)
(Nm3/MT FFB)
POME 70 19.6 5.350
Table A.3. Quantity of bio-mass and biogas at various mills throughputs (Chua et.al, 2007)
Quantity (metric tons/hour)
FFB Throughput (MT/hr) (mill capacity) 30 40 50
Fruit Fibre @14% 4.2 5.6 7
Shell @7% 2.1 2.8 3.5
EFB @14.5% 4.35 5.8 7.25
Quantity (Nm3/hour)
FFB Throughput (MT/hr) (mill capacity) 30 40 50
Biogas 588 784 980
$
Table A.4. Benefits of Using Fixed of Anaerobic Digester (Darnoko, IOPRI Engineering
and The Environment Research Group Internal Poster, 2007)
Renewable Energy with Fixed Bed Carbon Credit

Anaerobic Digester
• Recovery of 8 – 14 m3 biogas/m3 POME • Methane is 23 x of CO2

• Methane content 64% • Eligible for carbon trading
• COD removal rate 90% • Carbon Emission Reduction (CER)
• Value up to 1,200,000 liter diesel/yr/mill minimum 15,000 ton CO2 eq/yr/mill
• Equivalent to 25 kWh/ton FFB proc. • Value min US $ 105,000/yr/mill
• Enough to supply energy in the mill • Additional profit
• No need to use high pressure boiler
• More biomass residu left for other uses
Table A.4. CPO Mills by provinces in Indonesia until 2006 (Bisinfocus, 2006)
No Province Number of factory Capacity (tons FFB/ hour)
1 N. Aceh D. 17 543
2 North Sumatera 135 4,736
3 West Sumatera 11 545
4 Riau 108 4,570
5 Jambi 24 930
6 South Sumatera 29 1,265
7 Bengkulu 9 350
8 Bangka - Belitung 7 267
9 Lampung 7 290
Total Sumatera 347 13,496
$
No Province Number of factory Capacity (tons FFB/ hour)
10 West Java 2 60
Java 2 60
11 West Kalimantan 23 900
12 Central Kalimantan 29 1,010
13 South Kalimantan 5 170
14 East Kalimantan 13 530
Total Kalimantan 70 2,610
15 Central Sulawesi 4 120
16 South Sulawesi 6 210
Total Sulawesi 10 330
17 Papua 8 240
TOTAL Indonesia 437 16,736
Table A.5. Projection of Oil Palm Plantation Area from 2006 - 2025
Year Area (in thousands hectares)
Smallholders State-Owned Private Owned National

Plantation Plantation
2006 2 017 702 3 254 5 973
2007 2 337 727 3 449 6 513
2008 2 657 752 3 644 7 053
2009 2 997 777 3 839 7 593
2010 3 292 802 3 929 8 023
2015 3 792 927 4 289 9 008
$
Year Area (in thousands hectares)

2020 3 792 927 4 289 9 008
2025 3 792 927 4 289 9 008
Increase 3.4 1.5 1.5 2.2

(%/year)
Source: Directorate General of Crop Production Indonesian and IOPRI in Directorate General of Crop Production, Indonesian
Department of Agriculture. 2007. Roadmap Kelapa Sawit 2006 – 2025.
http://ditjenbun.deptan.go.id/tahunanbun/tahunan/images/pdf/Roadmap/roadmap-sawit-des2006.pdf (last visited 1 February 2009)
Table A.6. Projection of CPO Production 2006 - 2025
Year Production (in thousands tons CPO)

2006 4 558 2 348 7 466 14 402
2007 5 238 2 453 7 942 15 633
2008 5 907 2 561 8 429 16 897
2009 6 594 2 672 8 930 18 196
2010 7 288 2 785 9 254 19 327
2015 8 884 3 304 10 870 23 058
2020 9 571 3 657 11 612 24 840
2025 10 310 3 989 12 511 26 760
Increase 4.4 2.8 2.8 3.3

(%/year)
$
Table A.7. Projection of Oil Palm Plantation Productivity 2006 - 2025
Year Productivity (in kg CPO/ha/year)

2006 3 025 3 858 3 689 3 483
2007 3 048 3 905 3 737 3 495
2008 3 052 3 953 3 786 3 513
2009 3 064 4 002 3 837 3 535
2010 3 082 4 052 3 891 3 559
2015 3 286 4 321 4 176 3 779
2020 3 540 4 655 4 501 4 093
2025 3 814 5 015 4 849 4 509
Increase 4.4 2.8 2.8 3.3

(%/year)
Table A.8. Projection of Indonesian CPO Supply and Demand (in thousands tons) 2006 -
2025
Year Initial Production Import Export Domestic Final

Stock Consumption Stock
2006 534 14 402 0 10 791 3 772 418
2007 418 15 633 0 11 222 3 989 860
2008 860 16 897 0 11 671 4 227 1 859
2009 1 859 18 196 0 12 045 4 502 12 512
2010 12 512 19327 0 12 528 4 795 14 516
2015 14 516 23 058 0 15 389 6 570 15 615
$
Year Initial Production Import Export Domestic Final
Stock Consumption Stock
2020 15 615 24 840 0 16 496 8 028 15 931
2025 15 931 26 760 0 16 661 8 109 17 921
Increase 21.6 3.3 0 2.3 4.2 23.7

(%/year)
$$
References
Bisinfocus. 2006. Prospek Perkebunan dan Industri Minyak Sawit di Indonesia 2006-2020.
Bisinfocus Data Pratama. Tangerang
Buron, M., Hashib, S.A., Frappe, M., Ghennam, M. 2007. Sustainable Development and
CDM Projects in the Palm Oil Industry in Malaysia. Proceedings of Chemistry &
Technology Conference PIPOC Conference Session 7: 2007: 232 - 261
Chalvarit, O., Rulkens, W.H., Mol, A.P.J., Khaodhair, S. 2006. Options for Environmental
Sustainability of the Crude Palm Oil Industry in Thailand through Enhancement of
Industrial Ecosystems. Journal Environment, Development and Sustainability:
Springer Netherlands Vol 8(2), May 2006: 271-287.
Chua, N.S., Gian, H. F., Chua, T. N, Ngoi, S.H., Teo, A.C. 2007. Environment-Friendly
and Efficient Utilization of Palm Bio-Renewable Energy in an Integrated Palm Oil
Processing Complex. Proceedings of Chemistry & Technology Conference PIPOC
Conference 2007: 205 - 222
Directorate General of Crop Production Indonesian Department of Agriculture. 2008.
Pendataan Kelapa Sawit Tahun 2008 Secara Komprehensif dan Objektif (6 May
2008)
http://ditjenbun.deptan.go.id/sekretbun/sekret/index.php?option=com_content&task
=view&id=171&Itemid=26 (last visited 30 November 2008)
Directorate General of Crop Production Indonesian Department of Agriculture.
2007. Roadmap Kelapa Sawit 2006 – 2025.
http://ditjenbun.deptan.go.id/tahunanbun/tahunan/images/pdf/Roadmap/roadmap-
sawit-des2006.pdf (last visited 1 February 2009)
Dit, M. 2007. Palm Kernel Shell (PKS) is More Than Biomass for Alternative Fuel After
2005. Proceedings of Chemistry & Technology Conference PIPOC Conference
Session 7: 2007: 275 – 287.
Dortmans, P.J. 2004. Forecasting, backcasting, migration landscapes and strategic planning
maps. Futures 37 (2005) 273–285
Erningpraja, L., and R. Fauzan. 2005. Pengelolaan Limbah Cair Pabrik Kelapa Sawit
Dalam Menghadapi Berbagai Isu Dan Aturan Lingkungan. Jurnal Penelitian Kelapa
Sawit 13 (1): 11 – 24
Friedsen, W., and Quade, E.S. 1997. Chapter 4: The Methodology of System Analysis: an
introduction and overview, In : Quade, E.S., and Miser, H.J. Handbook of
System Analysis. Overview of uses, procedures, applications and practice (Vol 1),
Chichester. p 117 – 149
Hansen, S.B. 2007. Feasibility Study of Performing an Life Cycle Assessment on Crude
Palm Oil Production in Malaysia. The International Journal of Life Cycle
Assessment (Springer Berlin/Heidelberg) 12: 50-58.
Hassan, M. A, Yacob, S., Busu, Z and Shirai, Y. 2007. Sustainability of Palm Biomass
Initiative. Proceedings of Chemistry & Technology Conference PIPOC Conference
2007: 230 - 261
$*
Indonesian Department of Agriculture. 2006. Pedoman Umum Pengelolaan Limbah
Industri Kelapa Sawit. Direktorat Jenderal Pengolahan dan Pemasaran Hasil
Pertanian. Available online at
'0 1 " # 1' 234 5 6 7)/
89 :;7: 2 <2 ' ' <; <: ' <= # 1! 1 ' 23)> 5 ;7? 7)/? 7=%;/
23@A7)%7) Blast visited 30 November 2008)
Indonesian Ministry of the Environment. 2008. PROPER: The Company' s Environmental
Performance Rating Program. Available online at
http://www.menlh.go.id/proper/proper%20baru/eng-html/01/about%20proper.html
(last visited 30 November 2008)
Kompas Online. 2008. Aturan Perdagangan Karbon Sedang Digodok Pemerintah (7
November 2008). Available online at
http://www.kompas.com/read/xml/2008/11/07/15190373/aturan.perdagangan.karbo
n.sedang.digodok.pemerintah (last visited 30 November 2008)
Kompas Cetak.2008. Bakrie dan AES Corporation Kerja Sama CDM (25 November 2008)
Available online at
http://cetak.kompas.com/read/xml/2008/11/25/01244165/bakrie.dan.aes.corporatio
n.kerja.sama.cdm (last visited 17 January 2008)
Ling-Hoak, O., Wai-Cheong,L., Khoon-San,C., Zain, S.M., Yacob, S., and Visuvalingam,
V. 2007. Treatment of Palm Oil Mill Effluent and Empty Fruit Bunch by the Zero-
Waste Zero-Discharge Boustead Biotherm Palmass Plant. Proceedings of
Chemistry & Technology Conference PIPOC Conference Session 7: 2007: 264 -
274
Pahan, I. 2007. Panduan Lengkap Kelapa Sawit: Manajemen Agribisnis dari Hulu Sampai
Hilir. Penebar Swadaya. Jakarta
Palm Oil Mill Research Institute of Malaysia. 1993. Palm Oil Mill Handbook Part 1. Palm
Oil Mill Research Institute of Malaysia (1993)
Poh, P.E., and M.F. Chong. 2009. Development of anaerobic digestion methods for palm
oil mill effluent (POME) treatment. Bioresource Technology 100 (2009) 1–9
Reijnders, L., Huijbregts, M.A.J. 2008. Palm Oil and the Emission of Carbon-Based
Greenhouse Gases. Journal of Cleaner Production 16 (2008): 477-482
Roundtable_on_Sustainable_Palm_Oil. 2005. RSPO Principles and Criteria for Sustainable
Palm Oil Production: Public Release Version 17 October 2005. Availabe online at
http://www.rspo.org/resource_centre/RSPO%20Principles%20&%20Criteria%20fo
r%20Sustainable%20Palm%20Oil%20(final%20public%20realease).pdf (last
visited 30 November 2008)
Subramaniam,V., M.A. Ngan, C.Y. May, and N.M.N. Sulaiman. 2008. Environmental
Performance of the Milling Process Of Malaysian Palm Oil Using The Life Cycle
Assessment Approach. American Journal of Environmental Sciences 4: 310-315.
Schuchardt, F., Wulfert, K., Darnoko,D., Herawan, T. 2007. Effect of New Palm Oil Mill
Process on the EFB and POME Uitilisation. Proceedings of the PIPOC 2007
International Palm Oil Congress (Chemistry and Technology)
Sumathi, S., S.P. Chai, A.R. Mohamed. 2008. Utilization of oil palm as a source of
renewable energy in Malaysia. Renewable and Sustainable Energy Reviews
12 (2008) 2404–2421
$-
Weng, W.P., Kandiah, S., 2007. Emerging Trends In Palm Oil Milling Technology.
Proceedings of Chemistry & Technology Conference PIPOC Conference 2007: 9
- 31
Yousoff, S. 2008. Life Cycle Assessment of Crude Palm Oil Production in Malaysia.
Proceedings of International Conference on Environmental Research and
Technology (ICERT 2008).
*(

Microsoft Word - Minor Thesis Methane Scenario Palm Oil-Roby Fauzan

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Microsoft Word - Minor Thesis Methane Scenario Palm Oil-Roby Fauzan

Uploaded by

Copyright:

Available Formats

Options and Scenarios for Methane Emission Reduction

from Palm Oil Mill Wastewater Treatment in Indonesia

Source: Directorate General of Crop Estate, Indonesian

Source: Directorate General of Crop Estate, Indonesian

ESA Minor Thesis by Roby Fauzan (MAB 791030237010)

Wageningen, February 2009

1.1. Research Background 6

1.2. Statement of the Research Problem 12

1.3. Objective of the Study and Research Questions 12

1.4. Research Steps and Methods 13

1.5. Content of the Report 15

2.1. Overview of Palm Oil Mill Processing and Wastewater Treatment 17

3.1. Simple Forecasting 34

3.2. The Desired Futures-Backcasting Analysis 44

4.1. Forecasting Discussion 58

4.3. Key Actors Analysis, Impact Predictions and Transition Management 63

AMDAL Analisa Mengenai Dampak Lingkungan - Indonesian Regulatory

BOD Biochemical Oxygen Demand

CDM Clean Development Mechanism

COD Chemical Oxygen Demand

CPO Crude Palm Oil

CSR Corporate Social Responsibility

CSTR Complete Stirred Mixed Reactor

EFB Empty Fruit Bunch

FFB Fresh Fruit Bunch

MPOB Malaysian Palm Oil Board

NGO Non Governmental Organization

IOPRI Indonesian Oil Palm Research Institute

IPCC International Panel on Climate Change

POME Palm Oil Mill Effluent

PORIM Palm Oil Research Institute of Malaysia, now MPOB

PROPER Program Pemeringkatan Kinerja Perusahaan – Indonesian

RSPO Roundtable on Sustainable Palm Oil

UASB Up flow Anaerobic Sludge Blanket

UASFF Up flow Anaerobic Sludge Fixed Film

1.1. Research Background

Anaerobic 2.16 20 36 80.7 Yacob et.al

1.2. Statement of the Research Problem

1.3. Objective of the Study and Research Questions

1.4. Research Steps and Methods

1.5. Content of the Report

Tabel 1.4. Research Timetable

2.1.Overview of Palm Oil Processing and Wastewater Treatment

The wastewater is usually treated with a series of anaerobic-facultative ponds (waste

Minimizing the amount of wastewater through better improvement in clarification systems

The concept of composting is to moisturize empty fruit bunch (EFB) by periodically

2.3.Methane Emission Estimation from Palm Oil Mills in Indonesia, Scenario

Emission in ton CO2 equivalent per

Total Methane emissions (m3) = TME

Table 2.3. Comparison between Forecasting and Backcasting (Dortmans, 2004)

Philosophical view Causality; determinism; Causality and teleology;

Perspective Dominant trends; likely Societal problems in need

Approach Extrapolate trends into the Define interesting futures;

Methods Various econometric Partial and conditional

Techniques Various mathematical Not specified

Source: Dortmans, 2004

3.1. Simple Forecasting

Assumptions Business as usual Moderate Optimistic Very Optimistic/ Ideal

Comparison of Total Emissions of Methane from Four Scenarios

3000 Business As Usual

Figure 3.1. Comparison of Four Scenarios in Total Emissions

50,0 Business As Usual

Figure 3.2. Comparison of Four Scenarios in Number of Mills