Economic Analysis of Resource Efficiency Opportunities at the Pagar Merbau Palm Oil Mill

Shahputra ZMA, Arief M, Muda I and Sugianto S

Published on: 2024-07-31

Abstract

This study presents an economic analysis of resource efficiency opportunities at the Pagar Merbau palm oil mill. The analysis identifies significant potential to enhance the efficiency of water and energy use, as well as minimize waste, through a combination of simple and more complex measures. The key identified inefficiencies include leaks at various stations and workplace safety hazards. Addressing these issues can increase energy and water use efficiency, as well as improve the occupational health and safety system. Recommended measures include condensate water recycling, enhanced safety protocols, and utilizing waste for composting and animal feed. Further improvements, such as optimizing processes and investing in biogas and electricity production, require higher-level approval. Of the proposed options, implementing a condensate discharge system is prioritized for quick results, while the others will be pursued upon approval from mill management. The crucial role of mill managers in implementing these improvements is emphasized. By addressing the identified inefficiencies, the mill can achieve significant gains in resource use efficiency and worker safety, leading to enhanced economic and environmental performance.

Keywords

Palm oil mill; Resource efficiency; Water and energy use; Waste minimization; Condensate recycling; Safety; Economic analysis

Introduction

Indonesia is the world's largest palm oil producer, and the palm oil industry plays a crucial role in the country's economy [1]. However, this industry is often associated with various environmental problems such as deforestation, habitat destruction, and significant greenhouse gas emissions. In this context, implementing more efficient and environmentally-friendly production practices in the palm oil industry can help reduce the negative impact on the environment. Clean production and resource efficiency help manage waste, reduce greenhouse gas emissions, and mitigate the negative impact on the environment and human health. Additionally, these production practices can also improve production efficiency and reduce operational costs, which in turn will support Indonesia's economic growth. Therefore, it is important for the palm oil industry in Indonesia to adopt more efficient and cleaner production practices to maintain environmental, health, and economic sustainability. Resource Efficient and Cleaner Production (RECP) is an important concept in the palm oil industry in Indonesia. The basic concept of clean production involves efforts to reduce negative environmental impacts, such as solid waste, wastewater, and greenhouse gas emissions, while increasing the efficiency of natural resource use, such as water and energy. In the context of palm oil mills, this involves optimizing production processes, reducing solid waste, wastewater, and greenhouse gas emissions. One way to achieve cleaner production is to implement sustainable practices, such as processing palm waste into value-added products, like biogas for renewable energy or organic fertilizers as a substitute for chemical fertilizers. The efficient use of natural resources in the palm oil industry also involves wise water management to ensure sustainable water availability and optimize energy use to reduce waste and carbon emissions. The benefits of implementing the Resource Efficient and Cleaner Production (RECP) concept include increased profitability through operational efficiency and waste management, maintaining environmental sustainability, climate change mitigation, and regulatory compliance, improving corporate performance, and enhancing the company's image. In evaluating cleaner production and efficient use of natural resources in an effort towards an environmentally-friendly industry, it is important to trace the products, processes, and waste generated by palm oil mills. The main products of a palm oil mill are crude palm oil (CPO) and palm kernel oil (PKO), which are produced from Fresh Fruit Bunches (FFB) and palm kernels. The CPO production process involves sterilization of FFB, stripping, digestion, pressing, extraction, clarification, purification, and palm kernel processing. The waste generated by palm oil mills includes empty fruit bunches, shells, fibers, and Palm Oil Mill Effluent (POME).

Efforts to manage this waste include using it as fuel, composting, and land application. The POME treatment system can also be utilized to produce biogas or reused as fertilizer. Some companies only return the liquid waste to the plantations, a practice known as land application. In the context of evaluating cleaner production and efficient use of natural resources in the palm oil industry, it is crucial to thoroughly understand the production process and the various waste streams generated. This knowledge can then guide the implementation of sustainable practices to minimize environmental impact, such as utilizing waste for energy or fertilizer production, and optimizing resource use throughout the production cycle. (See Table 1.1).

Table 1: Results of a survey on waste from palm oil mill processing industry.

No.

Type of Palm Oil Waste

Quantity(million tons)

Utilization

1

Replanted palm trees

10.8

Left to decompose with limited use

2

Pruned fronds

69.9

Left to decompose with limited use

3

Empty fruit bunches (EFB)

21.5

Composting, fuel, mulching, planting

4

Palm kernel shells

6.9

Around 40% utilized as boiler fuel

5

Fibres

12.4

Used as boiler fuel

6

POME

0.63 m3/tons FFB

For compost, land application, and biogas

Source: Characteristics of palm oil industry waste related to emission factors, FGD "Global Warming and Reduction of Greenhouse Gas Emissions from the Palm Oil Industry, September 12, 2013, Bandung. Studies on the efficient use of natural resources and cleaner production in the palm oil processing industry aim to improve the productivity of natural resources and environmental performance [2]. It is expected that the results of these studies will provide a positive contribution towards the development of a sustainable palm oil industry in Indonesia [3]. The key objectives of these studies on resource efficiency and cleaner production are to increase the productivity of natural resources used in the palm oil industry and to enhance the environmental performance and sustainability of palm oil processing operations.

Assessment Method

Recp Concept

UNIDO [4] explains that RECP is the application of preventive environmental strategies to processes, products, and management to increase efficiency and reduce risks to humans and the environment, in pursuit of sustainable development. For an assessment work, RECP presents a recipe of tasks that must be completed based on the engineering assessment process. This recipe of tasks can be applied to the palm oil processing industry, using The Deming Cycle (Plan, Do, Check, Act) that aims to achieve continuous improvement of a product, process, or service within an organization. The stages are as follows:

Stage 1: The steps taken are to obtain commitment from top

management, followed by the formation of the RECP Team and capacity building, which are the initial stages in the Planning and Organizing aspect. The research team appointed by the national leadership of the Indonesian RECP project assists in training human capital (personnel) to conduct the audit and accompany the researchers.

Stage 2: The initial assessment of the palm oil processing industry identifies the processing flow, evaluates the inputs and outputs, and the staff and employees who have been trained together with the researchers select the focus areas deemed important to understand the problems faced. At this stage, the goal is to only get a general picture of the problems. Based on the initial assessment, more detailed assessments can be carried out by the researchers together with the factory staff and employees.

Stage 3: In the detailed assessment, the company's human capital team, together with the researchers, conducts a more in-depth assessment of the material balance and energy balance, evaluates the sources of waste generation and prevention, and determines the choice and screening of prevention options. From this assessment, the causes of waste generation can be understood and calculated, and a comprehensive action plan can be developed based on the findings.

Stage 4: The Feasibility Analysis is conducted based on the initial findings, evaluating the technical, economic, and environmental aspects, and then taking steps to evaluate the economic and environmental feasibility. The interim results obtained in this phase are a list of feasible prevention measures that can be implemented by the palm oil mill and documentation of the expected benefits. If the analyzed parameters are feasible, then changes to the materials that will have a positive impact on the economy and the environment can be made, and this phase is part of the recommendations for implementing the RECP findings. In the Implementation and Continuation stage, the research team guides the human capital to implement the recommended improvements. Monitoring and evaluation are carried out regularly to ensure the company that the changes made have resulted in beneficial improvements, whether in terms of economics, the environment, or social aspects. If there are any shortcomings in the implementation, the process will return to the initial planning or Planning and organizing stage, thus enabling continuous improvement. The assessment method up to the implementation of the RECP concept are conducted in six stages of the RECP assessment methodology that investigate three dimensions of sustainability individually and synergistically:

  • Production Efficiency: Through the increased productive use of natural resources by the company.
  • Environmental Management: Through the minimization of the company's negative impact on the environment.
  • Human Capital Development: Through the reduction of risks to people and communities by the company, and in efforts to support human capital development. These three aspects of production efficiency, environmental management, and human capital development are interrelated, as presented in Figure 1.3.

Figure 1: The Interrelationship between Production Efficiency, Environmental Management, and Human Capital Development.

Efficient production will be achieved if environmental management is implemented effectively, and this can only be realized if the human capital, i.e., the people, have the capacity to carry it out - people with the necessary knowledge, skills, and the ability to collaborate, both vertically and horizontally. Human capital is in a very important and strategic position to implement the principles of RECP management. The development of human capital in the palm oil processing industry, as intended, starts from the factory managers, staff, and extends to the employees who implement the standards and procedures set by RECP. Of course, the implementation of RECP can only happen after obtaining approval from the highest level of company leadership, who are committed to the concept of sustainability. Efficient production can only be achieved if environmental management is implemented well, and this in turn can only be realized if the human capital, or the people, have the necessary knowledge, skills, and ability to collaborate both vertically and horizontally. Human capital is in a very important and strategic position to implement the principles of RECP management. RECP utilizes 'cause categories' standards to explore the root causes and their impacts on process efficiency and waste generation. The categories of causes for inefficiency and waste generation are presented as follows:

  • Product Specifications
  • Selection and Quality of Input Materials
  • Selection and Design of Technology
  • Selection and Design of Equipment
  • Process Control Status/Standard Operating Practices
  • Handling Procedures, Operations, and Maintenance of Materials
  • Internal Value of Waste Stream Components
  • External Value of Waste Stream Components

Based on the standards used according to the categories mentioned, a diagnosis of the causes of inefficiency and waste generation is then conducted, as presented in Figure 10.4.

Figure 2: Diagnosis of the Causes of Inefficiency and Waste Generation.

By auditing based on the process causes of inefficiency and waste generation, a step-by-step investigation is conducted, starting from identifying what inputs will be processed, how much, and whether they meet the standards (for example, FFB: raw fruit, overripe fruit, mixed fruit, level of cleanliness, no waste cleaning). Similarly, the water and energy inputs used for the production process are examined. Regarding the operating system, it is investigated whether there are written procedures, manuals, and work instructions, whether they are understood and implemented, and what problems the operators face. When the plant is in operation, the process control, equipment condition, level of equipment modernization, leaks, and deviations from standards in the plant's operation are identified. For the produced output, it is examined whether the handling is going well, whether there are any leaks, storage/silos, etc. Regarding the waste generated by the plant, observations are made, for example, whether there are any minimization efforts such as addressing the mixing of CPO drips with wastewater, whether it is recorded and reported, whether actions are taken, and whether the liquid waste is separated from the fiber and EFB, sand, and leaves (internal value). The management of liquid waste is observed, including the oil content, any oil recovery efforts, and the utilization of liquid and solid waste (external value). Based on the diagnosis results, the causes of inefficiency and waste generation can be identified. This represents the opportunities for RECP to address the issues, and a summary of the problem-solving options is are presented as follows. Input Material Change: An option for input material change is to use organic fertilizer from composted empty fruit bunches (EFB) to partially replace the inorganic fertilizers currently used. This can reduce production costs without compromising output. Palm oil industries also utilize a mixture of empty fruit bunches and wastewater to produce high-quality compost. Some plantation companies have also harnessed methane (CH4) gas from wastewater ponds to generate electricity. Others have opted to simply flare the CH4 to reduce greenhouse gas emissions. Using alternative inputs can be a viable option to reduce or minimize the problematic waste generated and/or make it less hazardous, while also reducing costs. Good Housekeeping: Reviewing changes in operating procedures and workplace management aims to eliminate unnecessary activities or 'waste'. By improving housekeeping, industries can increase the efficiency of water and energy use, reduce waste generation, segregate waste, turn off unnecessary lights, and maintain cleanliness and comfort in the workplace. Occupational health and safety issues can also be addressed by improving manual procedures and work instructions for all activities in the plant. Plant Modification: Three solutions are offered for plant modifications by improving the control system to ensure the processing is well-controlled, continuous, and reliable. Better process control can enhance equipment performance, enabling higher efficiency and avoiding resource wastage. For example, Haco Industries in Kenya achieved significant water and energy savings through sub-metering and routine monitoring, with efficiency indicators measured as the ratio of water and energy consumption to production output. Modifying equipment can increase production by avoiding equipment overruns and improving efficiency. For instance, G Steel in Thailand repositioned their EAF burners to increase oxygen efficiency and improve casting machine operation - an investment of $210,000 resulted in annual savings of $15 million. For major technological changes, such as the need to replace machines, a specific economic and environmental feasibility assessment must be conducted. Replacing wasteful technology with more efficient alternatives is an example - the HTO Olive Mill in Morocco replaced the 3-phase olive oil extraction process with a 2-phase system, which saved energy and used the pomace as a fuel substitute. This change resulted in improved olive oil quality, and eliminated wastewater and organic waste. For product modifications, redesigning products aims to reduce the environmental impact during production, use, and disposal. For example, water hyacinth, which can be a nuisance in lakes, marshes, and rivers, can be processed and used as a raw material for economically valuable handicrafts like bags, wallets, and hats. However, for palm oil mills, product modification may be less relevant, as crude palm oil (CPO) is an input for producing finished goods like cooking oil, margarine, and biodiesel. For waste, the solutions are reuse, recycle, and recovery (land application, utilizing greenhouse gases for energy, oil-water separation). Solid waste can be composted or used as a substitute for fossil fuels. Utilizing useful materials (such as energy, water) from industrial waste streams or using them for alternative purposes is also beneficial. For example, using palm kernel shells as boiler fuel instead of selling them for charcoal production, and utilizing the ash from boiler combustion by other companies to produce bricks or cement mixtures [5].

Recp Analysis Method

The RECP Analysis Method is a way to investigate and understand the workings of an industrial production process. The key components of this method include Material Flow Analysis (MFA), Input Material Analysis, Water and Energy Efficiency Analysis, and Cost-Benefit Analysis (CBA) [6].

The importance of this method lies in its ability to help companies identify ways to improve resource efficiency and reduce environmental impact in their production processes. By analysing the production processes, companies can save costs, reduce waste, and comply with environmental regulations. This can also provide a competitive advantage for companies by creating cleaner and more efficient products. The analysis methods used in RECP studies can be described as follows:

  • Resource Efficiency: Through process analysis, organizations can identify ways to use resources (such as raw materials, energy) more efficiently, reduce waste, and increase productivity.
  • Lower Environmental Impact: Through analysis, companies can reduce greenhouse gas emissions, water pollution, and solid waste. This helps achieve cleaner and more sustainable production practices.
  • Competitive Advantage: Organizations that adopt the RECP analysis method can gain a competitive advantage by reducing production costs, improving product quality, and meeting the demands of environmentally conscious consumers.

By implementing the RECP analysis method, companies can ensure that they comply with applicable environmental regulations.

 Recp Analysis Parameters

To measure the level of efficiency and cleaner production, several parameters are presented that are measured to analyze RECP and indicators to detect variables of resource use, pollution, and production output, both in absolute numbers and relative numbers (%), from the material changes that occurred before RECP was implemented (baseline) and after RECP was implemented (year 1 and year 2). From these changes, it can be seen whether it is beneficial or not. For a clearer understanding of how to calculate the changes, a matrix is presented in Table 2.1.

Table 2: Absolute Indicators of Resource Use, Pollution Intensity, and Production Output.

Absolute Indicators

Unit

Baseline (B) (before RECP intervention)

Year 1 (A) (after RECP implementation)

Change (C) C = 100*(A-B)/B (%)

Difference between A and B

Resource Use

Energy Use

MJ/year

0,00

0,00

0,00

0,00

Material Use

ton/year

0,00

0,00

0,00

0,00

Water Use

m3/year

0,00

0,00

0,00

0,00

Pollution

Carbon dioxide (CO2)

ton CO2-eq/year

0,00

0,00

0,00

0,00

Liquid Waste

m3/year

0,00

0,00

0,00

0,00

Solid Waste

ton/year

0,00

0,00

0,00

0,00

Product Output (Q)

CPO Product

ton/year

0,00

0,00

0,00

0,00

PKO Product

ton/year

0,00

0,00

0,00

0,00

Note: For the second year and the third year, the same method can be used, just replacing the column with year 2 and so on.

Table 3: Relative Indicators of Resource Use, Pollution Intensity, and Production Output.

Indikator Relatif

Unit

Baseline (B) (before RECP intervention)

Year 1 (A) (after RECP implementation)

Change (C) C = 100*(A-B)/B (%)

Resource Productivity

Energy Productivity

ton Q/MJ Energi

0,00

0,00

0,00

Material Productivity

ton Q/ton material

0,00

0,00

0,00

Water Productivity

ton Q/m3 water

0,00

0,00

0,00

Pollution Intensity

Carbon Intensity

ton CO2eq /ton Q

0,00

0,00

0,00

Liquid Waste Intensity

m3 waste/ton Q

0,00

0,00

0,00

Solid Waste Intensity

ton waste/ton Q

0,00

0,00

0,00

For efficiency analysis (output-input ratio), it is done by comparing product output data (CPO) with raw materials (FFB), energy resource use, and water use. For pollution intensity, it is done by comparing product output data (CPO) with equivalent CO2 release intensity, liquid waste intensity, and solid waste intensity. The two parts of the RECP study are resource efficiency and pollution intensity, as follows:

Tabel 4: RECP Indicator.

Efisiensi Sumberdaya

Intensitas Pencemaran

Pengukuran output produktif per unit konsumsi sumberdaya

Pengukuran limbah dan emisi yang dihasilkan per unuit output produktif.

Total penggunaan energi

Pencemaran udara

Total penggunaan air

Volume limbah cair

Total penggunaan material

Kuantitas limbah padat

Analisis Output - Input untuk masing-masing indikator untuk penggunaan sumberaya, intensitas pencemaran dan output produk serta data disajikan sebagai berikut [7].

1.Product output (CPO and PKO) against material consumption (FFB): tons of CPO / tons of FFB and tons of PKO / tons of FFB.

Table 5: Product output (CPO and PKO) against material consumption (FFB).

Material Indicator

Reference Indicator

Conversion

Total Material Usage, in tons/year

Output produk, dalam satuan tons/year

1 ton = 1000 kg

Material Productivity

Ktons/year atau IDR/year

1ktons = 1 million kg

Total Material Usage

Data Needed

Materials purchased from suppliers, materials sourced internally (extractive and harvested) are included.:

 

· Invoices from suppliers,

· Raw materials - main raw materials (FFB)

 

 Weight data from the weighbridge

· Materials related to the production process but not part of the produced product (such as oil, lubricants)

 

· Records of incoming goods

· Semi-manufactured materials or materials that become part of the final product.

 

· Receipts and invoices

· Materials used for packaging.

 

· Inventory data

2.Product output against energy consumption: in tons of CPO product /MWh and PKO/MWh

Table 6: Product output against energy consumption.

Material Indicator

Reference Indicator

Conversion

Total energy usage, in MJ/year or kwh/year

Product Output, (tons/year)

1 kwh = 3,6 MJ

Energy Productivity

Kwh/year or IDR/ Year

1 MJ = 0,278 kwh

Total Material Usage

Data Needed

1) Motive energy (natural gas, fuel oil, coal, biofuel, solid waste (fiber, EFB), solar power, wind energy, micro hydro, etc.)

5) Invoices from suppliers,

6) Records of incoming goods

2) District heating/cooling

 

7) Receipts and invoices

3) Additional electricity from external sources

 

8) Inventory data

4) Steam usage

 

 

3.Productivity output (CPO and PKO) against water consumption: In tons/Gl

Table 7: Productivity output (CPO and PKO) against water consumption.

Material Indicator

Reference Indicator

Conversion

Water usage (kl/year atau m3/year)

Product Output, (unit /year or tons/year

1kl = 1m3 1kl = 1000L

Water Usage Productivity

Kl/year or IDR/year

 

 Total Material Usage

Data Needed

The total water usage should cover water from various sources.

 

1) Invoices from suppliers,

7) Urban water sources (PDAM) or other utilities

 

2) Receipts and invoices,

8) Surface water, wetlands, rivers, lakes, or the sea.

 

3) Water usage meters,

9) Rainwater or recycled water

 

4) Measurements,

10) Wastewater from external sources

 

5) Calculations, and estimates

In the input-output analysis of liquid and solid waste, waste generation is the output, while production is the input.

4.Liquid waste generation per unit of production output: In kl of waste/ton product

Table 8: Liquid waste generation per unit of production output.

Liquid Waste Indicator

Reference Indicator

Conversion

Total liquid waste (kl/year)

Product Output, (unit /year or tons/year)

1 kl = 1 m3

Waste Intensity

Kl/year or IDR/year

1kl = 1000 l

The total liquid waste

Data needed

1) Liquid waste that is allowed to flow into the company's environment through pipes, drums, tanks, or other ways of moving it

5) Invoices from the wastewater treatment company

2) Water from process results, sanitation, and cleaning

6) Receipts and invoices

3) Unplanned discharges whose volume can be measured or estimated

7) Measurements

4) Water that seeps into the ground

8) Water balance calculations 9) Estimates based on emission factors and industry benchmarks

5.Solid waste generation per unit of productive output: In tons of solid waste/ton of product output

Table 9: Solid waste generation per unit of productive output.

Waste Indicator

Reference Indicator

Conversion

Total solid waste tons/year

Product Output, (unit/year or ton/year)

1 ton = 1000 kg

Waste intnsity

ktons/year or IDR/year

1kton = 1 million kg

Total Solid Waste

Data Needed

1) Waste sent to landfill

7) Invoices from suppliers

2) Processed in incinerators

8) Receipts and invoices

3) Hazardous and toxic waste

9) Weighbridge records (either at the weighbridge or at the landfill site)

4) Municipal waste

10) Measurements

5) Garden/yard waste

11) Calculations

6) Waste sent for recycling outside the palm oil mill

12) Estimates

6.Air emissions per unit of productive output: in tons of CO2/ton of product.

Table 10: Air emissions per unit of productive output.

Air Emissions Indicators

Reference Indicator

Conversion (approximation) of CO2 emissions in grams/kWh

Green House Gass (GHG) (ton CO2 eq/year)

Product Ouput (ton/year)

Natural gas = 200

Carbon intensity

ton/year or IDR/year

Fuel oil for lighting = 260. Fuel oil for heavy work/machinery = 280

Air Emissions

Data needed

1) Power generation, heat, steam, including energy inputs (imports)

Most of the calculations are based on data obtained from:

· Invoices from suppliers

2) Combustion processes

· Receipts and invoices

· Measurements

3) Physical and chemical processes

· Calculations

· Estimates/standardized emission factors for common processes in the industry

4) Ventilation

· Conversion factor lists

5) Fugitive emissions

6) Carbon content lists

For GHG calculations, RECP uses the conversions used by UNIDO and ITB (2014) which are derived from the Defra (2004) Guideline to Defra's GHG conversion factors. Based on the conversion factors, the product type and the quantity of products from a given activity, using Excel, the amount of GHG emissions in CO2eq can be obtained. The amount of emissions generated depends on the type of activity, such as the use of electricity, district heating/cooling, steam, fuel combustion like the use of petroleum products, coal and coal products, and gas [8].

Discussion

This research is one of the 6 palm oil mills owned by state-owned enterprises (BUMN) and private companies that have been audited. The researchers who conducted the audit were certified researchers who had previously received training from UNIDO and ITB. RECP for palm oil mills is one of the industries in the UNIDO-ITB collaboration project from 2014-2016. The assessment results of PAGAR MERBAU Palm Oil Mill (PKS PAGAR MERBAU) aim to serve as learning material for students and similar industries. In the production process, PKS PAGAR MERBAU uses large amounts of energy and water resources, and also generates significant solid waste, wastewater, and greenhouse gases. Therefore, assessing the efficiency of resource use and waste minimization programs is a very strategic step for the palm oil processing industry. Most palm oil mills use electricity from the national grid (PLN), while some use biomass by-products from the mill as energy sources. PKS PAGAR MERBAU utilizes shells and fibers as additional energy sources. Some palm oil mills use biogas from wastewater treatment as an energy source, but PKS PAGAR MERBAU has not implemented this. Unfortunately, not all mills utilize empty fruit bunches (EFB) for energy due to their high water content and relatively low heat output. However, some palm oil mills use EFB as organic material to enrich plantation lands, and some have even developed high-quality compost from EFB. To improve resource use efficiency, energy, water, and waste minimization, an initial assessment of the condition of PKS PAGAR MERBAU was conducted. Opportunities to implement RECP were then identified, evaluated, and applied at PKS PAGAR MERBAU, with the provision of support services, including demonstration, adaptation, and replication for the future. The efficiency program and implementation of cleaner production (RECP) will have a positive impact on the economy and the environment. The goal of the efficient resource production and cleaner production (RECP) assessment for the palm oil sector is to demonstrate and replicate RECP concepts, methods, practices, and techniques to improve resource use productivity, increase energy, material, and water use efficiency, and enhance environmental performance, thereby contributing to the sustainable development of the palm oil industry in Indonesia [9].

Baseline Situation

The fresh fruit bunch (FFB) processing by the palm oil mill is almost the same in all mills, a brief explanation of FFB and CPO processing is as follows:

  1. 1)FFB is transported from the plantation to the factory using trucks and weighed immediately, after which the FFB is loaded into a loading ram with a capacity of 2-3 tons/truck.
  2. 2)The next process is the hot water part; The truck is loaded into a sterilization unit or a hot steam capsule (see picture/photo) and steamed for 90 to 100 minutes at a temperature of 135° to 150° Celsius with a pressure of 2.8 to 3.0 bar.
  3. 3)The steamed FFB from the sterilization unit is loaded using a crane into the thresher unit. In this process, the fruits and bunches are separated.
  4. 4)The separated fruits are then heated at a temperature of 85 to 95°Celsius for 30 minutes before being fed into the digester unit. The fruits in this unit are stirred with a mixer blade. The rotation speed of the mixer blade is 20 to 30 revolutions per minute. In this process, the kernel is separated from the mesocarp.
  5. 5)The fruits coming out of the digester are then extracted for the oil using a screw press with a normal pressure of 30-50 bar. To facilitate extraction, hot water with a temperature of 90-95°C is added at 15-20% of the weight of the processed FFB. The nuts and fibers are sent to the depericarper for separation.
  6. 6)The next step is to filter the CPO, install a vibrating screen, and pump it into a mixing tank, and then the sediment is continuously fed into a clarifier tank to separate the oil from the fine sludge. The clean oil is fed into the purifier and vacuum drier unit, while the remaining sludge is re-filtered and sent to the wastewater treatment plant. The clean oil from the vacuum drier is pumped into the storage tank, which is the final step in the CPO production process.
  7. 7)For palm kernel processing, to facilitate the release of the kernel shell, a Ripple Mill is used. The drying is done on the floor, where the top, middle, and bottom are treated with temperatures of 60, 70, and 80°C, respectively. In the kernel cracking process, equipment and screen grading are required. The screen grading separates the large and small kernels using a rotating drum that separates the small fraction (< 12 mm) and the large fraction (> 12 mm). The kernels that meet the requirements are then fed into the appropriate cracker. Inside the cracker, the kernels are thrown against the inner wall until they are cracked. The kernels are separated from their shells by a hydrocyclone, which is a vertical tube that can be rotated.

Environmental Hazards

Potential environmental hazards from various hazardous sources at the PAGAR MERBAU Palm Oil Mill are as follows:

  1. Wastewater treatment and greenhouse gases from the pond system and land use, odor, insects, high oil content in the ponds, and heat waste.
  2. Boilers in the form of smoke, ash, excessive heat, scale (scale), and particulate waste.
  3. Hydrocyclones that use clay slurry causing very thick sedimentation in the ponds.
  4. Storage of chemicals for boiler feed, NaOH, H2SO4, and Ca(ClO)2 water.
  5. Almost all hazardous waste units because they use used oil, grease, lubricants, used light bulbs, and oil filters.
  6. Used lamps are found in almost all rooms.
  7. Used batteries are found in several rooms.
  8. Wastewater treatment plant (WWTP).

Areas of Improvement

There are 10 key stations at the Pagar Merbau Palm Oil Mill that can be improved, namely:

  • Loading Station
  • Sterilization Station
  • Stripping Station
  • Pressing Station
  • Clarification Station
  • Kernel Plant
  • Water Treatment Station
  • Power Plant
  • Boiler Station
  • Wastewater Treatment System - Pond System

Meanwhile, regarding the housekeeping aspects, we observe that the company has taken some measures, but there are still several things that need to be improved, as follows:

  • Monitor water consumption for processing and improve efficiency of water use in the production process.
  • Promptly repair any leaks and maintain good housekeeping.
  • Reuse/recycle water and reduce water consumption in the production area.
  • Improve management of domestic waste.
  • Improve management of hazardous and toxic (B3) waste (need labeling, safe temporary storage).
  • Conserve and improve energy efficiency.
  • Develop a new system to avoid raw material losses during production.
  • Identify sources of hazardous waste and separate organic and inorganic waste.
  • Periodically control energy use to improve energy efficiency.
  • Seek alternative replacements for B3 waste with more environmentally friendly materials.

Priority For Improvement

Based on the RECP options provided, there are several improvements that need to be considered, namely as follows:

1) Good housekeeping includes:

  1. a) Cleaning oil spills at the pressing station and clarification station by covering leaks, including:
  • Leaks at the pressing station and hydrocyclones
  • Unmanaged kernels at the kernel station
  • Steam leaks at the clarification station and rusted second floor

2) Steam leaks on the Sound Dampener at the sterilization station.

3) Addressing health, safety (KKK), and cleanliness issues, including:

  1. Hazards from scattered kernels (nuts) on the floor at the kernel station, which are muddy and slippery. To address this, the CPO plant manager should develop a new temporary storage area outside the building, and regularly clean and dry the water flow.
  2. Ash from boiler combustion is not properly managed. Management must improve regular ash management, disposing of it in the plantation as fertilizer.
  3. Untie gases tube - this is a simple solution without extra costs, but safer and tidier.
  4. Unmanaged kernel at the kernel station, which is a dangerous fire hazard and reduces quality. Due to the kernel silo being full, the CPO factory manager should develop a new temporary storage area outside the building.
  5. Steam leaks on the Sound Dampener at the sterilization station.
  6. Addressing health, safety, and cleanliness issues, including:

Hazards from scattered kernels (nuts) on the floor at the kernel station, which are muddy and slippery. To address this, the CPO plant manager should develop a new temporary storage area outside the building, and regularly clean and dry the water flow.

  1. Ash from boiler combustion is not properly managed. Management must improve regular ash management, disposing of it in the plantation as fertilizer.
  2. Untie gases tube, this is a simple solution without extra costs, but safer and tidier.
  3. Unmanaged kernel at the kernel station, which is a dangerous fire hazard and reduces quality
  4. Due to the kernel silo being full, the CPO factory manager should develop a new temporary storage area outside the building.

6) Input Changes: Developing a transportation schedule for Fresh Fruit Bunches (FFB) (FIFO = first in first out --> this affects the quality of the CPO product).

7) Better Process Control: Implementing measurement equipment on each tank and pressure vessel.

8) Equipment Modification: Creating a holding tank to store condensation water for reuse.

9) Technology Change: Changing the sterilization equipment from horizontal to vertical, which will reduce costs and space requirements.

10) On-site Reuse or Recycling: Recycling water condensate.

11) Reusing empty fruit bunches (EFB) as fuel.

12 )EFB for feed production (Japan project).

13) Producing useful by-products such as charcoal from EFB.

14) Product Modification: Developing machines to produce biofuel (biodiesel) from low-quality CPO and improving CPO quality.

Traffic Light Method

After conducting a comprehensive review, the researchers used the traffic light system method to summarize the overall assessment results of natural resource use, environmental load, and mitigation costs, as well as potential hazards, as presented in Table 3.1.

Figure 3: Summary of overall problem identification results for the Pagar Merbau Palm Oil Mill.

Detailed Assessment

The detailed RECP assessment aims to compile a comprehensive catalog for the established priority areas. From the detailed assessment and benchmarking to compare with better CPO factories, many improvements can be made by the PAGAR MERBAU POM such as enlarging the truck road space to improve heat transfer efficiency; Install a vibro screen (single deck to increase mud separator efficiency; convert the current horizontal sterilization model to a vertical model; analyze the use of only one set of hydro cyclones and clay baths instead of the current dual use, the impact is expected to achieve energy use efficiency; EFB for fuel and utilize recycled water condensate oil; and use GHG gas from POME to generate electricity. These initiatives require further investment that requires a separate proposal to obtain CEO approval. The PAGAR MERBAU POM Manager has a role to follow up on these findings and discuss with the CEO. From the five options offered by RECP, the aim is to further improve resource efficiency and energy efficiency and minimize environmental impact, including (1) Divert the discarded oily condensate/steam (from sterilization and kernel heaters) to a hot water collector tank then to the dilution water channel, (2) Operate either a hydro cyclone or claybath to separate kernel and shell to minimize energy consumption. (3) Replace 3 units of P-12 screw press with 2 units of P-17 screw press to facilitate control; (4) Use a slow speed mud separator or decanter, not the current mud separator and (5) Boiler ash can be sold as a conblock (brick) making material. The manager proposes as follows: No (1) to work on the easy one because of the quick results and no need to get CEO approval. Next No. 2; No.3, No.4 and No.5 will be followed up later after getting CEO approval. As for the recommended action options presented by the RECP team, they are shown in the following table [10]:

Table 11: Recommended RECP Action Options.

Action

Economy

Environment

Investment

Revenue or income

Pay back

NPV

Conservation of resources

Waste reduction

Reuse discharged water/condensate/steam

Rp 22.220.000,-

Rp 63.520.089,6

4 months

Rp 79.719.929,6

Water conservation up to 14.054,4 m3/year

Liquid waste is reduced 14,054.4 m3/year

Replacing 3 units of screw press P-12 into 2 units screw press P-17 to facilitate control/monitoring.

The investment is relatively large, so it requires mgt. approval.

16849 kW/ year X Rp23,179 per kWh = Rp390.542.971,-

Depends on the investment cost

-

Energy conservation up to 5.3 kWh (16849 kW/year)

Reduce oil loss

Use a slow speed sludge separator or decanter, not the current sludge separator.

The investment is relatively large, so it requires Mgt. approval.

-

-

-

-

Lebih sedikit kontaminasi minyak dalam lumpur limbah (sludge waste)

Boiler ash can be sold as a raw material for making concrete blocks (bricks).

Not utilized/distributed to the plantation area. Costs for collecting the ash and transporting it to the field.

Improving soil structure / increasing productivity but needs to be observed

None

None

None

Yes, because of recycling

Conclusion

The analysis of the Pagar Merbau Palm Oil Mill (PKS Pagar Merbau) shows a significant potential to improve the efficiency of water and energy use, as well as the potential to reduce waste through actions that can be taken without requiring large investments. Closing leaks at various points and improving employee performance in consistently implementing standard operating procedures (SOPs) are crucial, with the crucial role of the factory manager in implementing immediate improvements. There are two assessment stages: the initial stage and the detailed stage. Some early findings indicate inefficiencies in the processing stage, such as CPO and steam leaks, as well as Occupational Health and Safety (OHS) issues. The suggested solutions include plugging leaks, improving infrastructure, and increasing discipline in implementing work safety procedures. For the detailed waste management stage, increasing the efficiency of waste use, such as reusing condensate water and utilizing waste for other purposes, such as using methane gas for energy, becomes an important step in minimizing environmental impact and reducing or mitigating climate change. Initiatives such as upgrading equipment, utilizing biogas, and increasing the use of empty bunches for fuel and compost are also proposed to improve efficiency and reduce environmental impact. From the various options offered, some can be immediately implemented by the manager without the CEO's approval, while others require proposals to obtain the necessary approval and investment. Overall, the efforts to improve resource use efficiency and reduce environmental impact at the Pagar Merbau Palm Oil Mill (PKS Pagar Merbau) promise positive results in both the short and long term, with the right management support.

References

  1. Maksum A. Trading of Indonesian crude palm oil supply chain and its impact on economic growth: implementation of theory of comparative advantage and the competitive advantage of nation. Int J Energy Econ Poli. 2012; 11: 296-302.
  2. Liu J, Loan VTK, Mousa S, Ali A and Cong PT. Sustainability and natural resources management in developed countries: The role of financial inclusion and human development. Resou Poli. 2023; 80: 103143.
  3. Putri H. The Effect of Lean Practices on Organizational Sustainability through Green Supply Chain Management as Intervening Variables (Study on the Palm Oil Industry in North Sumatra Province). J Econ Fina Manag Stud. 2022; 5: 119-126.
  4. UNDP and UNIDO 2008. Case study in Good Organization Management and Governance UNDP and UNIDO. Report t2008.
  5. UNDP and UNIDO 2008. Viet Nam National Cleaner Production Centre UNDP and UNIDO. Report t2008.
  6. UNDP and UNIDO 2005. Tanzania National Cleaner Production Centre Case study in Good Organization Management and Governance UNDP and UNIDO Report t2005.
  7. Berkel V From RECP to Sustainable Innovation Bahan presentasi yang diberikan kepada peserta Training RECP pada Tanggal 16-17 Juni 2014 di Medan Kerjasama UNIDO dan ITB Bandung untuk Proyek RECP Indonesia. 2014.
  8. Berkel V Introduction to Resource Efficient and Cleaner Production, Bahan presentasi yang diberikan kepada peserta Training RECP pada Tanggal 16-17 Juni 2014 di Medan. Kerjasama UNIDO dan ITB Bandung untuk Proyek RECP Indonesia.
  9. Berkel VR. Policy Financing and Markets for Resource Efficient& Cleaner Production, Bahan presentasi yang diberikan kepada peserta Training RECP pada Tanggal 16-17 Juni 2014 di Medan. Kerjasama UNIDO dan ITB Bandung untuk Proyek RECP Indonesia. 2014.
  10. Zen Z, Carthy JMC and Barlow Environmental Economics in an Age of Regional Autonomy: the Case of Pollution in the Plantation Sector of Northn Sumatra Oil Palm Industrial Economics Journal. 2005; 5: 3.

Acknowledgements

  1. The highest appreciation and gratitude are expressed to the Director of PTPN IV who has provided access for cooperation in the context of the RECP audit at the Pagar Merbau Palm Oil Mill (PKS Pagar Merbau) factory.
  2. Gratitude is expressed to the Pagar Merbau Palm Oil Mill (PKS Pagar Merbau) factory manager and staff who have cooperated well during the RECP audit process.
  3. Gratitude is expressed to Dr. Rene Van Berkel who has provided training and assessment of the results of the RECP expert team's work.
  4. Gratitude is expressed to Prof. Tjandra Setiadi, the director of CREPI ITB, who has entrusted the expert team to carry out the Audit task.