BioCNG lifeline for palm oil industry

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The BioCNG plant in Sg TenggiThe BioCNG plant in Sg Tengi.

If there were a product that deserves the title, “King of Versatility”, it should be palm oil. It is a lifeline for a variety of industries, used in countless array of products including food, cosmetics and supplements, to name a few.

However, this economic lifeline is mired in controversy due to the allegations that the industry is the cause for the rapid deforestation of rainforests, as well as the destruction of habitats, as well as a pollution contributor – all in the race to meet demand that keeps growing at an exponential rate.

In addition to that, Palm Oil Mill Effluent (POME) – waste water discharged from the sterilisation, crude oil clarification and cracked mixture separation processes – emits huge amounts of methane gas from its anaerobic process. Methane has 21 times the global warming potential (GWP) compared with the other gasses.

The uncontrollable release of methane from these treatment ponds is a critical environmental issue and most mills mitigate this by capturing the methane and flaring it in order to reduce the amount released into the atmosphere.

The problem with flaring of methane is that it is the least value added approach towards sustainability, says to Dr Lim Daw Yuen of the Technical Service Division of Sime Darby Offshore Engineering Sdn Bhd.

Methane produced here is a huge source of renewable energy with the potential to create a viable revenue stream for the mills, while addressing environmental and regulatory concerns. The source remains largely untapped, adds Dr Lim (pic).

POME is a thick brownish liquid that contains organic matter, solids, oil and grease and is harmful for the environment if discharged untreated. The conventional industry practice of processing POME is to keep the waste liquid in open-air treatment ponds, where it is subjected to anaerobic digestion. This in turn releases a huge amount of greenhouse gasses, particularly methane, into the atmosphere.

To prevent the release of methane, the treatment pond is often sealed with a High-Density Polyethylene (HDPE) material to capture the released gases for either flaring or to be tapped as fuel.

An alternative fuel

The captured biogas can be used to fuel boilers in mills as well as generate electricity which can be connected to the national grid or used internally.

The potential of methane as a revenue generator has been addressed by the initiatives under the Palm Oil National Key Economic Area (NKEA), which looks at the development of biogas trapping facilities at mills as well as its potential to create RM3 billion in GNI and about 2,000 jobs by 2020.

A pilot biogas plant capable of supplying compressed natural gas to commercial entities began this year at the Sungai Tengi mill, which belongs to Felda Global Group. The mill will be the first to install a commercial scale bioCNG facility in Malaysia.

The Chief Executive Officer of Felda Palm Industries and Head of Plantations, Malaysia at Felda Global Ventures Holdings Berhad (FGV) Dato’ Ir Jamlus Hj Aziz says Felda is collaborating with Sime Darby Offshore Engineering and Malaysian Palm Oil Board on this project, which is aimed  at providing a sustainable source of bioCNG for commercial entities.

BioCNG, he points out, is a more viable and lucrative alternative to feeding the electricity converted from methane to the national grid, which proves to be a challenge when the mills are located faraway from power stations.

Contributing to energy mix

According to Dr Lim, opting for compressed biogas would enable mill owners to fully monetise the potential of biogas as every single flow of biogas will be quantified and scaled to price pre cubic meter (RM/m3) basis. End users of bioCNG not only benefit in terms of cost when compared with fuels such as diesel, medium fuel oil, light fuel oil and liquid petroleum gas but can also leverage on the sustainability labelling of green fuel when marketing products overseas, he continues.

“BioCNG will enable us as a nation to go far in our bio-economy footprint. Currently, Malaysia has approximately 439 oil palm mills with an equivalent energy of 182 MMSCFD (million standard cubic feet per day) that can be generated from bioCNG.

“It is a vast amount of energy that can be a significant contributor to the nation’s energy mix and balance. In terms of revenue we are looking at an annual contribution of RM3.3 billion yearly on a sustainable basis, assuming the bioCNG is valued at RM40/MMBTU (one million British Thermal Units).

For FELDA, the Sungai Tengi BioCNG project will be the test case for the commercial viability of bioCNG. “We want to proof that bioCNG from palm biogas is indeed financially and operationally viable,” says Dato’ Jamlus.

“We will first focus on delivering to industrial customers and in the future we hope to broaden our customer base, for example to include the possibility of providing bioCNG for dual fuel vehicle (NGV).  However, for now we have to wait for the market to be comfortable with bioCNG in term of gas quality and delivery consistency.

“We hope that in time, the market will accept bioCNG as it is a renewable fuel that pushes their products up the value chain,” he adds.

According to Dr Lim, Sime Darby has developed an entire bioCNG value chain that delivers the fuel right to the customers’ doorstep. Currently, Sime Darby Offshore Engineering has partnered with Gas Malaysia Berhad, which will undertake the role in delivering the bioCNG generated on site.

“To encourage more mills owners to seriously consider installing a BioCNG plant, Sime Darby has positioned itself to invest in the BioCNG model. We have also identified several private investors who are keen to collaborate with us as co-investors.”

If all these bioCNG projects do work out according to plan, the Malaysian palm oil industry could be on the road to a much greener and more profitable future.

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