Oil Palm Industry in Malaysia


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Oil Palm Industry

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Oil Palm Industry in Malaysia

  1. 1. Palm Oil: A Success Story in Green Technology Innovations Kalyana Sundram, Yusof Basiron, & Yew Foong Kheong Malaysian Palm Oil Council (MPOC)
  2. 2. PALM OIL PRODUCTION Planting → Harvesting → Palm oil mill → Palm oil refinery
  3. 3. Palm Oil’s Contribution to World Supply 14 7.8 18.6 28 31.2 Palm Oil Soya Rapeseed Sunflower Others
  4. 4. Net Importing & Exporting Countries for Oils & Fats (2009) •Malaysia, Indonesia & Argentina – are major net exporters of oils and fats. Indonesia Malaysia Argentina Brazil Saudi Arabia Ukraine Canada Philippines Thailand Russia
  5. 5. Cultivated Area of Oil Seeds in the World Land Use Type Total Area As % of Area (million ha) Total Agricultural Land * 4267 100 Oil Seeds ** 233 4.69 Soyabean ** 92 1.85 Rapeseed ** 30 0.60 Sunflower ** 23 0.46 Oil Palm ** 11 0.22 *** Coconut ** 9 0.18 Other Oil Seeds ** 68 1.37 Malaysian Oil Palm 4.7 0.09 Sources: * FAO ** Oil World Planted on 4.7 million ha and produced 17.6 million tonnes of CPO production in 2009. We also generate biomass, nearly 115 million MT. Palm Oil is only oil crop in world to have such a sustainability certifying system
  6. 6. Why did palm oil industry use green technologies? • Responsible business entity • Green technologies sustain basic land resources • Government helped to spur growth of green technologies in some cases by putting legislations in place • In return this is beneficial for the cultivation of oil palm • Quantum leaps in green technology took place in last two decades • Coincided with time of awareness of climate change when environment friendly technologies sought
  7. 7. Zero burning & Integrated Pest Management are Traditional Green Technologies Zero burning returns nutrients and organic matter to soil Result: Lower inputs of chemical fertilizers and saves costs
  9. 9. Palm Oil – A Choice Raw Material for Biodiesel Production Using Malaysian Patented Technologies Malaysia 1st Commercial Palm Sime Darby Biodiesel Sdn. Bhd. Biodiesel Plant Winter-Grade Palm Biodiesel Plant, Carotino Sdn. Bhd., Johor. Home Grown MPOB Technology
  10. 10. The greenhouse-gas perspective • EU Renewable Energy Directive requires reduction of GHG emissions by at least 35% compared with fossil fuels, so that one biofuel is classified as "sustainable" and therefore meets the objectives and requirements • Palm Oil :Discriminatory element in RED - typical value ("state of the technology") vs. default value ("worst case scenario") in the "calculation" of GHG substitution: Biofuel / source Typical value Default value Ethanol / sugar-beet 61% 52% biodiesel / rapeseed 45% 38% biodiesel / sunflower oil 58% 51% biodiesel / palmoil 36% 19% (full methane capture) (62%) (56%) Adapted from Dr. Gernot Pehnelt, IPOSC 2010 10
  11. 11. • As a raw material, the oil palm is more efficient than other oil crops: Typical yields of different oil crops (t/ha/a) Rape seed Palm oil 5 Yield of seed, fruits 4.11 t/ha/a 19.5 t/ha/a 4 Oil available from process 30% 19% 3 Yield of plant oil 1.23 t/ha/a 3.85 t/ha/a* t/ha/a 2 Yield of biodiesel 1.19 t/ha/a 3.63 t/ha/a 1 Gross energy of biodiesel 46.5 GJ/ha/a 141.6 GJ/ha/a 0 (biodiesel energy value: 39 GJ/t) soybeans groundnut sunflow er rapeseed coconut palm (US) (US) (ARG) (EU) (PHI) (MAL) Source: Thoenes 2006 Average oilcrop yields (tonnes/ha/year) 6 5 • Energy balance of palmoil better than other 4 oil crops, e.g. rapeseed t/ha/a 3 2 • Palmoil lowest land use and lowest cost per 1 output unit 0 soybeans groundnut sunflow er rapeseed coconut palm Thoenes 2007 Basiron 2007 Source: Basiron 2007, Thoenes 2007 Adapted from Dr. Gernot Pehnelt, IPOSC 2010
  12. 12. US EPA: Palm Biodiesel LCA Analysis using GREET Model Greenhouse Gas Emissions (GHG; g CO2e/MJ) Hybrid Hybrid Co-Product Method: Displacement Allocation Allocation Palm Kernels, Co-Products Palm Kernels, Palm Kernels, Palm Biomass Credited Glycerin Glycerin Glycerin Farm Equipment 0.9 0.8 1.4 Farm Chemicals 5.0 4.5 7.5 Feedstock Transport 0.7 0.6 1.0 Oil Extraction 0.8 0.7 1.2 POME methane 4.0 3.6 5.9 Oil Transport 0.3 0.3 0.3 Transesterification 5.2 5.2 5.4 BD T&D 3.2 3.2 3.2 Fuel Combustion 4.4 4.4 4.4 Palm Kernel Credit -3.6 Glycerin Credit -21.5 Total Fuel Cycle 24.5 23.3 5.3 Reduction from Diesel 74.1% 75.4% 94.4% The Well To Wheel (WTW) analysis of palm biodiesel indicates that from a GHG perspective, a minimum 74.1% reduction in fuel cycle GHG savings are achieved compared to baseline California Ultra Low Sulphur Diesel is achieved .
  13. 13. Life Cycle Analysis of Palm Biodiesel: US GREET MODEL Including LUC GHG Emissions (g CO2 e / mmBtu) over 100 years 5,000,000 Fuel Production 4,000,000 Farm Inputs & N2O 3,000,000 50% Reduction Fuel & Feed Transport 2,000,000 Tailpipe 1,000,000 iLUC excl N cycle 0 Palm Plantation LUC/dLUC -1,000,000 Net Emissions in e se ld C el ba yie yL U s l gh l l Ba ies e lh i on es e o d s e sia Di Bi die ala y lm o RFS2: Biodiesel with 50% GHG 00 5 Pa Bi M 2 lm sel Reduction compared to Fossil Diesel Pa ie B iod Qualifies As an Advanced Diesel lm Pa Palm Biodiesel Should Thus Qualify Since it has greater than 50% reduction
  14. 14. Sustainability criteria: EU Directive • Minimum 35% greenhouse gas emission saving compared to fossil fuel • No conversion of land with high carbon stock since January 2008 (wetlands, continuously forested areas, peatlands) • No raw material from land that had high biodiversity value from January 2008 (primary forest, biodiverse grassland, nature protection areas) • (EU raw materials must meet EU rules on agro-environmental practices) There will be some further elements to report on – Commission to determine them soon; no consequences Based on presentation of Mr. Ewout DEURWAARDER (European Commission)
  15. 15. Developed countries should be fair to developing countries to use some forest to alleviate poverty 70 % Forest 60 50 40 30 20 10 0 Average: 25.5% Average: 57%
  16. 16. The Carbon Cycle of a Palm Plantation includes Harvested Wood, Roots and Other Biomass Products Apart from its Oil and Kernels. Branches Wood products Herbaceous vegetation Litter Soil Carbon Dead wood Roots Palm plantations sequester carbon – up to 5 tonnes C/ha/year or 110 tons C for the lifecycle of the plantation (25 years) . A natural forest sequesters a bit slower if starting also from scratch (around 1 tonne) but the stock is much higher. The iLUC and LUC for palm must be better integrated to accurately take into account these effects. Most current LUC models take into account the initial release from clearing land. However, the uptake from the palm tree and root systems is seldom accounted for.
  17. 17. The Wet Weight of Potential Oil Palm Biomass Available in Malaysia in 2009 Unit Sources of Oil Palm Biomass Million tonnes per year Million cubic meter per year Oil Palm Trunk (OPT) 15.2 23.6 Oil Palm Frond (OPF) 83.0 - Empty Fruit Bunches (EFB) 17.5 - Total 115.7 23.6 Total oil palm planted area = 4.7 million hectares
  18. 18. 1. EMPTY FRUIT BUNCHES 37 tonnes per ha (dwb) 17.5 mil tonnes (wet ) 65 % moisture PALM FIBRES Fronds: 9.7 tonnes per ha (dwb) 11.3 mil. tonnes(wet) Moisture 42 %
  19. 19. Solid Fuel • Conventionally combusted in mills • Used by alternative industry • Independent heat generation in industrial plants supplying energy to industries in vicinity • Palm biomass briquettes
  20. 20. Palm Biomass Briquettes • Treated EFB can be used as a raw material for the production of palm based biomass briquettes 100% Pulverized EFB Pulverized EFB + sawdust EFB Fibre + sawdust (PEFB) (PEFB+SD) ( 50:50) (FEFB+SD) (50:50) • As a substitute raw material for commercial sawdust briquette industry • Made either from 100% palm biomass or mixed with sawdust.
  21. 21. PRODUCTION OF COMPOST FROM EFB AND EFFLUENT Source : Asiagreen Sdn. Bhd.
  22. 22. Waste Management ● Treated palm oil mill effluent (POME) contains high level of plant nutrients that may replace inorganic fertilizers ● Treated POME applied to land improves the soil and increases yield 22
  23. 23. Reduced Emissions = Sustainability Average 40 tonne/hr FFB Mill C02 e Removed in Covered Pond = 34,486 t/year Additional C02 e Removed when methane used for electricity = 8,966 t/year Total = 43,452 t/year less 5,431 site generated emissions = 38,021 t/year C02 e. Over 400 Mills this = over 15 million t/y Current CDM Value = RM800m/y
  24. 24. Gaseous Fuel (Biogas) 80% of palm oil mills deploy ponding system for POME treatment Ponds & Tank Digester UP POME treatment system Gas Engine
  25. 25. 25
  26. 26. Renewable Energy to the Grid TSH Bioenergy Sdn. Bhd. • 8 MW palm biomass based grid connected power plant • Expected to supply a maximum of 7 MW electricity to the grid. Source: (FSDP Special Issue- Cogen3)
  27. 27. RESEARCH IN OIL PALM TISSUE CULTURE • Solid culture system • Liquid culture system • Development of biomarker Expression Profile of Embryogenic Markers Explant EgRLK1 OPZE5 EgRLK1 EgRLK2 EgRLK3 EgRLK2 OPZE3 Callogenesis OPZE5 OPZE3 EgRLK3 Embryogenic calli (contains PEMs) Non-embryogenic calli EgPER1 EgHOX1 Selection of calli for initiation of suspension OPHb1 EgPK1 OPZE3 EgRLK3 EgPER1 EgHOX1 Suspension cultures EgNAC1 OPZE5 EgRLK2 EgRLK1 OPHb1 Proliferation of embryogenic calli/early stage embryos Progression of embryogenesis suppressed by auxins EgPER1 Hormone-free medium EgPER1 Expression Profile EgPER1 profile in AM12-14 OPZE3 Rapid progression of embryogenesis OPZE5 Pattern formation log10 rescaled norm expr EgNAC1 10 OPHb1 Meristem establishment 1 Transferred to solid media for embryoid maturation EgPER1 (white & green embryoids) EgNAC1 OPZE5 OPZE3 0.1 OPZE3 Shooting EgRLK1 0.01 EgRLK3 OPZE5 EgRLK2 T0 T1d T7d T1m T2m T3m T3mA T4m T5m T6m T6mA T9m T9mA Rooting stages LOW AM12(L) ZERO AM13(0) HIGH AM14(H) Pre-nursery Courtesy: DG, MPOB
  28. 28. TISSUE OIL PALM CLONING PROCESS (SOLID MEDIUM) CULTURE Embryoid formation Taking of leaf cabbage Cutting of young leaves Leaf explant culture Callus formation /palm crown 24 6 months 9 months month s In field nursery Acclimatization of ramets Rooting stage Shoot Polyembryoid development stage multiplication stage 8-9 months 3 -4 months 3 months 4 months 2 months (Field planting at 1 year old) Courtesy: DG, MPOB
  29. 29. TISSUE CLONING OF PALMS WITH SPECIAL TRAITS CULTURE  Palms with special traits from the ‘fast- track’ breeding programme were cloned:  High bunch index  High vitamin E  High carotene  Long stalk High-bunch index dura of 0.68 (virescent High-bunch index type) tenera of 0.58  Low height increment Long stalk tenera (35.5cm) High-carotene oleifera ramets (4000 ppm) High vitamin E dura & tenera (1551 & 1392 ppm, respectively) Courtesy: DG, MPOB
  30. 30. GENOME SEQUENCING Deli Dura 5 crosses 18 crosses Progeny Progeny tested tested in 3 trials in 3 trials Dura Pisifera (Sh+Sh+) (Sh-Sh-) 0.212/70 0.182/77 Completed Genome Sequencing of 3 Palms • 17.2 x - Oleifera genome • 16.5 x - Pisifera genome • 34.7 x - Dura genome • 68.4 x Total Deciphered the transcriptome of 17 Palm tissues (will complete another 13 palm tissues in 2010) Courtesy: DG, MPOB
  31. 31. GENOME ANALYSIS Relative Genome Sizes Arabidopsis Moss Rice Sorghum Clover Tomato Soybean Elaeis oleifera Canola Oil Palm Genome Analysis Lolium Corn • Genome Size: est. to be > 1,710 MB Tobacco • 93.4% of the genome in sequence contigs • 95.4% of genetic markers in sequence contigs Wheat Courtesy: DG, MPOB
  32. 32. ROADMAP OF GENETICALLY MODIFIED OIL PALM IP auditing & Regulatory approval Screening of D & P with Commercia transgene lization of Selfing of Crossing of GM oil progenies w/o selected D palm bar gene &P Screening w/o Bar gene Crossing GM X Non-GM Screenhouse Planting/Proof of concept 2010 2015 2020 2025 2030 2035 2040 Courtesy: DG, MPOB
  34. 34. PATENTED TECHNOLOGY : RECOVERY OF PHENOLIC ANTIOXIDANTS FROM PALM OIL MILLING WASTE Plate heat exchangers for cooling Holding Tank POME Upper oil Lower aqueous phase phase containing Holding Pelleted nutraceuticals Tank solids Palm oil mill Centrifugal system Phenolic Flavonoid Antioxidant rich filtrate Series of membrane systems Patents granted in USA, Malaysia, Indonesia The follow-up R&D on biological properties of this phenolic antioxidant or Palm Fruit Juice has yielded additional 9 patents through collaborations between MPOB, CSIRO (Australia), MIT (USA), Brandeis (USA). Awaiting COMMERCIALIZATION
  35. 35. Capitalizing on America’s Fear of Heart Disease: Palm Oil is the major ingredient in the American Heart Association’s (AHA) Recommended Diet
  36. 36. SMART BALANCE FAMILY OF FOODS Based on our Patents (Sundram et al. ) and the Brand name “SMART BALANCE”, a US public listed company paid US$465 million (RM 1.58 Billion) to acquire this business. Company trades on the Nasdaq as “Smart Balance Inc.” - annual turnover of US250 Million Palm oil thus ticks even in the most sophisticated markets! AMAZING PALM OIL INDEED!
  37. 37. How and Why Has the Malaysian Palm Oil Industry Innovated How Industry is taxed through an Act of Parliament and pays RM11 per MT of CPO/CPKO produced for R&D and RM2 for promotion. This provides for at least RM200 million for R&D (MPOB) and RM36 million for promotional activities (MPOC). In addition we compete actively for government grants. We have created a reasonable pool of experts who are in great demand (and actively being fished by overseas producers). WHY We cannot afford to play second fiddle in the global oils and fats markets. We remain the prime movers and will hold this position for as long as possible!!!
  38. 38. THANK YOU www.mpoc.org.my www.mpoc.org.my