Embed Size (px)
Citation preview
Systematic Tools for Sustainable Oil Palm Plantation
Development - A Response to European Union
Resolution on Palm Oil
Dr. Viknesh Andiappan, CEng MIChemE
29th April 2019
Mr. Jaya Prasanth
Dr. Wan Yoke Kin
Dr. Viknesh Andiappan
Prof. Denny Ng Kok Sum
Prof. Raymond Tan
RESEARCH TEAM
ABOUT
• Degree(s):
• MEng (Hons.) Chemical Engineering: (Uni of Nottingham, Malaysia)
• Ph.D in Engineering (Uni of Nottingham, Malaysia)
• Position: Assistant Professor
• Affiliation: Heriot-Watt University, Malaysia
• Other Qualifications: CEng MIChemE, GradEng (BEM)
3
Brief History of Heriot-Watt University
4
• Edinburgh, Scotland
• Founded in 1821
• Dubai Campus (2005)
• Malaysia Campus (2014)
Heriot-Watt University in Malaysia
5
City of Putrajaya, West Malaysia
36.8 km from Kuala Lumpur
22.6 km from KLIA
01
INTRODUCTION
02
MOTIVATION
03
RESEARCH
PROBLEM
04
SCOPES &
RESULTS
05
DISCUSSION
YEARS TO
MATURITY
DIVERSIFIED
MARKET
VERSATILE
PRODUCTECONOMIC
LIFESPAN
PRODUCTION
COSTYIELD
EMERGENCE OF
PALM OIL
3
7
5
0
2
4
6
8
Oil palm Coconut Olive
No
of
ye
ars
PALM OIL
CRUCIAL COMMODITY
03
01
02
AVAILABILITY(PHYSICAL)
ACCESSIBILITY(ECONOMIC)
ACCEPTANCE(SOCIAL)
SIGNIFICANCE
OF PALM OIL
45 MT (> 60% exports)
55% of veg oil trade
ASIAEUROPEAFRICA AMERICAS
FOOD
SECURITY
10% -20% lesser in
cost compared to
others
OVERVIEW OF PALM
OIL INDUSTRY
OIL PALM PLANTATION
ESTATE /
SMALLHOLDERS
FRESH FRUIT BUNCH
(FFB)
INFLUENCE OF
CLIMATIC REQ ON
GEO’PIC DISTRBUTION
PALM OIL REFINERY
IMPURTIES, ODOUR
& FFA TO
PRESCRIBED LIMITS
REFINED PALM OIL
PALM OIL MILL
PROCESS FFB TO
PRODUCE CRUDE
PALM OIL (CPO)
BIOMASS WASTES
CHP PLANT
POME
PALM OIL
USED FOR
DIFFERENT
APPLICATIONS
01
INTRODUCTION
02
MOTIVATION
Other plant-based oils have a much
higher environmental footprint & land
use
Recognize complexity and
emphasizes the importance of
developing a global solution
Recognizes importance for conservation
of rain forests and biodiversity.
Stresses preservation efforts should be
combined with sustainable development
Oil palm
• can deliver positive contributions to the
economic development;
• but must be responsible and
sustainable
EU
RESOLUTION
PALM OIL
CONTIBUTION TO
TROPICAL
DEFORESTATION (7/14)
CARBON EMISSION (3)
WILDFIRES (3)
BIODIVERSITY LOSS (1)
SOCIAL ISSUES
CORE
ISSUES
UN Sustainable Development Goals
Ensure sustainable food production systems andimplement resilient agricultural practices thatincrease productivity and production, that helpmaintain ecosystems
Ensure the conservation, restoration andsustainable use of terrestrial ecosystems andtheir services, in particular forests, wetlands,mountains and drylands
Promote the implementation of sustainablemanagement of all types of forests, haltdeforestation, restore degraded forests
Integrate ecosystem and biodiversity values into national and local planning during development process, poverty reduction strategies etc
Integrate climate change measures into nationalpolicies, strategies and planning
Achieve the sustainable management andefficient use of natural resources
PREVIOUS WORK
• Biomass supply chain optimisation considering oil palm
plantation growth rates and palm biomass export
• Considers carbon reduction targeting
• Biomass supply chain optimisation for bioenergy
distribution
• Analyses feasible operating range of the entire network
OIL PALM PLANTATION
ESTATE /
SMALLHOLDERS
FRESH FRUIT BUNCH
(FFB)
INFLUENCE OF
CLIMATIC REQ ON
GEO’PIC DISTRBUTION
PALM OIL REFINERY
IMPURTIES, ODOUR
& FFA TO
PRESCRIBED LIMITS
REFINED PALM OIL
PALM OIL MILL
PROCESS FFB TO
PRODUCE CRUDE
PALM OIL (CPO)
BIOMASS WASTES
CHP PLANT
POME
PALM OIL
USED FOR
DIFFERENT
APPLICATIONS
PREVIOUS WORK
OIL PALM PLANTATION
ESTATE /
SMALLHOLDERS
FRESH FRUIT BUNCH
(FFB)
INFLUENCE OF
CLIMATIC REQ ON
GEO’PIC DISTRBUTION
PALM OIL REFINERY
IMPURTIES, ODOUR
& FFA TO
PRESCRIBED LIMITS
REFINED PALM OIL
PALM OIL MILL
PROCESS FFB TO
PRODUCE CRUDE
PALM OIL (CPO)
BIOMASS WASTES
CHP PLANT
POME
PALM OIL
USED FOR
DIFFERENT
APPLICATIONS
CURRENT WORK
01
INTRODUCTION
02
MOTIVATION
03
RESEARCH
PROBLEM
INCREASE IN
VEGETABLE OIL
DEMAND
OIL PALM
EXPANSION
Increase in population
Rise in income
Urbanization
Agronomic &
Economic
advantages
DEFORESTATIONFOOD SECURITY
ENVIRONEMNTAL
IMPACTS
UNSUSTAINABLE
PALM OIL
PRODUCTION DUE
TO LUC
RESEARCH
PROBLEM
STATEMENT OF PROBLEM
The sustainability crisis plaguing the palm oil industry is mainly due to unplanned excessive land
use change of sensitive ecosystems (tropical forests) to oil palm plantations.
This phenomenon was fed by increased vegetable oil demand. With continuing increase in
demand and vulnerability of forests to large scale deforestation, it remains a big challenge to
ensure food security along with sustainable palm oil production.
To develop decision support tools that aid decision makers in making systematic and scientific
decisions on sustainable oil palm plantation development
OBJECTIVE OF RESEARCH
01
INTRODUCTION
02
MOTIVATION
03
RESEARCH
PROBLEM
04
SCOPES &
RESULTS
S1Analysis Tool to Assess Expansion in Palm Plantations based on LUC
costs
ENV accounted as LUC Tax
OUTCOMES
Optimised LUC for sustainable oil palm plantation expansion
Demand to which expansion is absolutely necessary
The expansion cost associated with different expected demands
over the timeline
To develop a systematic tool to carry out expansion analysis for oil palm plantation
development OBJ
DECISION VARIABLES
Deforestation/land clearing cost
Planting cost
LUC Tax
Land types considered • Tropical forest (TF)
• Peat forest (PF)
• Grasslands (GL)
EP5
EP1 EP2
EP4EP3
EP6 EP7
NP
1
NP
5
NP
4
NP
3
NP
2
Existing palm
plantations
Potential lands for new palm
plantation development
CPO
Palm Oil MillFresh Fruit Bunch
KPO
Kernel cake
Fibre
Nut shell
EFB
POME
CPO / KPO
Refinery
Refined Palm Oil
Refined Kernel
Palm Oil
Drying
WWTP
Steam
Power
Treated water
CHP
Superstructure
90 t/h(fixed)
240,613 tons of FFB/year
CPO
Palm Oil MillFresh Fruit Bunch
KPO
Kernel cake
Fibre
Nut shell
EFB
POME
CPO / KPO
Refinery
Refined Palm Oil
Refined Kernel
Palm Oil
Drying
WWTP
Steam
Power
Treated water
EP1
EP2
EP3
EP4
EP5
EP6
EP7
NP1
NP2
NP3
NP4
NP5
32708 t/y
225000 t/y
67500 t/y
45000 t/y
67500 t/y
CHP
67500 t/y
Scenario 1
NO EXPANSION
CPO
Palm Oil MillFresh Fruit Bunch
KPO
Kernel cake
Fibre
Nut shell
EFB
POME
CPO / KPO
Refinery
Refined Palm Oil
Refined Kernel
Palm Oil
Drying
WWTP
Steam
Power
Treated water
EP1
EP2
EP3
EP4
EP5
EP6
EP7
NP1
NP2
NP3
NP4
NP5
262500
78750
52500
78750
CHP
78750
Scenario 2
OPTIMISED EXPANSION
CPO
Palm Oil MillFresh Fruit Bunch
KPO
Kernel cake
Fibre
Nut shell
EFB
POME
CPO / KPO
Refinery
Refined Palm Oil
Refined Kernel
Palm Oil
Drying
WWTP
Steam
Power
Treated water
EP1
EP2
EP3
EP4
EP5
EP6
EP7
NP1
NP2
NP3
NP4
NP5
300000
90000
60000
90000
CHP
78750
Scenario 3
OPTIMISED EXPANSION
0
2
4
6
8
10
12
14
16
Exp
ansi
on
Co
st (
in m
illio
ns,
USD
)
Palm Oil Demand (tons/year)
SENSITIVITY ANALYSIS – DEMAND
Planting Cost
Deforestation Cost
Min Demand
for expansion
S2Analysis Tool to Assess Expansion of Palm Value Chain based on Costs, Carbon
and Water Footprints
OUTCOMES
Optimised LUC for sustainable oil palm plantation expansion
Trade-Offs between economic performance, carbon and water
footprints
To develop a systematic tool for sustainable expansions in palm value chain OBJ
DECISION VARIABLES
Deforestation/land clearing cost
Planting cost
LUC tax
Operating costs
Land costs
Revenue – palm oil, power
Carbon emissions – logistics, LUC
Water footprint – plantations, mills, CHP
EP1
EP2
EP3
EP10
NP1
NP2
NP
10
NP3
Fresh
Fruit
Bunch
CPO
Mill_2
Mill_3
Mill_5
Mill_1KPO
Kernel Cake
Fibre
Shell
EFB
POME
By-Pass
CPO
By-Pass
KPO
By-Pass
POME
Steam
CPO
Refinery
KPO
Refinery
Drying CHP
WWTP
Refined
Palm Oil
Refined
KPO
Electricity
Treated
Water
Superstructure
30 t/h
45 t/h
273,374 tons of FFB/year
10 MW
EP1
EP2
EP3
NP
9
NP
1
NP
6
NP
3
Fresh
Fruit
Bunch
CPO
Mill_2
Mill_4
Mill_1
KPO
Kernel Cake
Fibre
Shell
EFB
POME
ByPass
CPO
ByPass
POME
Steam
Maximum Profit
EP4
EP5
EP6
EP7
EP8
EP9
EP10
NP
10
639562 t/y
162058 t/y
669432 t/y
85344 t/y
ByPass
KPO8534 t/y
CPO Refinery
KPO
Refinery
Drying CHP
WWTP
Refined
Palm Oil
Refined
KPO
Electricity
Treated
Water
NP
5NP
8
4 MW @ POM 4
CU – 0.97
CU – 0.79
EP1
EP2
EP3
NP9
NP5
Fresh
Fruit
Bunch
CPO
KPO
Kernel Cake
Fibre
Shell
EFB
POME
ByPass
CPO
ByPass
POME
Steam
Minimum
Carbon
EP4
EP5
EP6
EP7
EP8
EP9
EP10
465953 t/y
118067 t/y
487714 t/y
62177 t/y
ByPass
KPO6217 t/y
CPO Refinery
KPO
Refinery
Drying CHP
WWTP
Refined
Palm Oil
Refined
KPO
Electricity
Treated
Water
Mill_2
Mill_4
Mill_1
3 MW
CU – 0.93
CU – 0.45
EP1
EP2
EP3
NP3
Fresh
Fruit
Bunch
CPO
KPO
Kernel Cake
Fibre
Shell
EFB
POME
ByPass
CPO
ByPass
POME
Steam
EP4
EP5
EP6
EP7
EP8
EP9
EP10
NP10
114323 t/y
471349 t/y
60205 t/y
ByPass
KPO6020 t/y
CPO Refinery
KPO
Refinery
Drying CHP
WWTP
Refined
Palm Oil
Refined
KPO
Electricity
Treated
Water
Mill_5
Mill_1
Minimum Water
CU – 0.93
Existing POM 2 (45 t/h) replaced
EP1
EP2
EP3
NP9
NP5
Fresh
Fruit
Bunch
CPO
KPO
Kernel Cake
Fibre
Shell
EFB
POME
ByPass
CPO
ByPass
POME
Steam
EP4
EP5
EP6
EP7
EP8
EP9
EP10
465953 t/y
118067 t/y
487715 t/y
62177 t/y
ByPass
KPO6217 t/y
CPO Refinery
KPO
Refinery
Drying CHP
WWTP
Refined
Palm Oil
Refined
KPO
Electricity
Treated
Water
Mill_2
Mill_1
Multi-Objective
NO EXPANSION
NO EXPANSION
Profit /year
(USD)
Carbon/year
(tCO2)
Water
(m3/year)
Maximum
Profit29,256,230 50,546 218,300,500
Minimum
Carbon24,981,770 588 90,934,930
Minimum
Water21,134,290 28,547 57,259,260
Multi-
Objective 27,727,050 958 90,934,930
0
5
10
15
20
25
MAX Profit MIN Carbon MIN Water MULTI Obj
Cost
in m
illi
ons
(US
D)/
yea
r
Plantation Cost
Land Cost Expansion Cost Operation Cost
PROPORTIONAL TO FFB PRODUCTION
0
0.1
0.2
0.3
0.4
0.5
0.6
MAX Profit MIN Carbon MIN Water MULTI Obj
Cost
in m
illi
ons
(US
D)/
yea
r
LUC TAX
LUC TAX
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
MAX Profit MIN Carbon MIN Water MULTI Obj
Cost
in m
illi
ons
(US
D)/
yea
r
Mill Cost
Mill 1 Mill 2 Mill 3 Mill 4 Mill 5
0
0.5
1
1.5
2
2.5
MAX Profit MIN Carbon MIN Water MULTI Obj
Cost
in m
illi
ons
(US
D)/
yea
r
CHP Cost
CHP 1 CHP 2 CHP 3 CHP 4 CHP 5
NO EXPNO EXP
DEPENDS ON SELECTION OF
LANDS
0
10000
20000
30000
40000
50000
60000
MAX Profit MIN Carbon MIN Water MULTI Obj
tons
of
Carb
on d
ioxid
e/yea
rCarbon Emissions
LUC Transport
0
50
100
150
200
250
MAX Profit MIN Carbon MIN Water MULTI Obj
cubic
met
er (
in m
illi
ons)
/yea
r
Plantation Water Footprint
Green Blue Grey
0
0.005
0.01
0.015
0.02
0.025
0.03
0.035
MAX Profit MIN Carbon MIN Water MULTI Obj
cubic
met
er (
in m
illi
ons)
/yea
r
CHP Water Footprint
Green Blue Grey
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
MAX Profit MIN Carbon MIN Water MULTI Obj
cubic
met
er (
in m
illi
ons)
/yea
r
Mill Water Footprint
Green Blue Grey
DEPENDS ON SELECTION OF
LANDS
0
10
20
30
40
50
60
70
MAX Profit MIN Carbon MIN Water MULTI Obj
Cost
in m
illi
ons
(US
D)/
yea
r
Annual Total cost, Revenue & Profit
Total Cost Revenue Profit
0
50
100
150
200
250
MAX Profit MIN Carbon MIN Water MULTI Obj
cub
ic m
eter
(in
mil
lions)
/yea
r
Annual Total Water Footprint
Green Blue Grey
REVENUE vs PROFIT
S3Multi-Period Planning Tool to Assess Storage Options for Oil Palm Plantation
Expansion
OUTCOMES
Optimised LUC for sustainable oil palm plantation expansion considering the
varying yield due to maturity
Storage capacity optimisation and its influence on expansion – LUC &
investments
To develop a systematic tool to plan storage, accounting the varying yield of palm
plantations due to maturity in expansion analysisOBJ
DECISION VARIABLES
Deforestation/land clearing cost
Planting cost
EP5
EP1 EP2
EP4EP3
EP6 EP7
NP
1
NP
5
NP
4
NP
3
NP
2
Existing palm
plantations
Potential lands for new palm
plantation development
CPO
Palm Oil MillFresh Fruit Bunch
KPO
Kernel cake
Fibre
Nut shell
EFB
POME
CPO / KPO
Refinery
Refined Palm Oil
Refined Kernel
Palm Oil
Drying
WWTP
Steam
Power
Treated water
CHP
Superstructure
240,613 tons of FFB/year
0
50000
100000
150000
200000
250000
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045
FF
B y
ield
(to
ns/
yea
r)
Year
P10
P9
P8
P7
P6
P5
P4
P3
P2
P1
Varying yield due to maturity
*Assumption - In the year 2021, plantations P1 and P2 were existing with maturity of 15 and 20 years respectively
New plantation developed
P3, P6P8
P1
P5, P7, P9
P10
0
5
10
15
20
25
30
35
40
45
50
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2045
Co
st i
n m
illi
ons
(US
D)
Year
Annual Investments needed for optimised plantation expansion
Investment
0
5000
10000
15000
20000
25000
30000
35000
40000
2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045
CPO – Demand, Production and Storage
Demand Production Storage
S4Planning Tool to Assess Required Maturity for Oil Palm Plantations for Future
Demands
OUTCOMES
Optimisation of expansion based on maturity profile optimisation
To determine the required maturity of plantations to meet future demands based on the
plantation profilesOBJ
DECISION VARIABLES
Deforestation/land clearing cost
Planting cost
THANK YOU FOR YOUR ATTENTION
FEEDBACK, QUESTIONS & SUGGESTIONS
