Plantations, pumps and power stations

palm oil storage tank, Riau (DTE)

How oil palm produced in Indonesia ends up in Europe’s transport and electricity systems

DTE 96-97, December 2013

The following information is largely drawn from Mapping and understanding the UK palm oil supply chain, Proforest’s April 2011 report for the UK government.

From plantation to mill:

Palm oil comes from the fruit of the oil palm tree (Elais guineensis), which is grown in plantations in Asia, Africa and South America. The fruit, called Fresh Fruit Bunches (FFB) in the industry, is harvested all year round and crushed in a mill, usually on or near the plantation, to extract crude palm oil (CPO) from the fleshy part of the fruit. The palm kernels are also separated from the fruit, extracted from the palm nuts and crushed to extract palm kernel oil (PKO).  Additionally, palm kernel expeller or meal (PKE or PKM) is also produced from the kernel crushing process. Other residues are produced too (palm shells, palm fibres and empty fruit bunches (EFB), some of which may be used for local energy generation at the mill. The fibres and EFB are not available on the commodity market.

From mill to pump: biodiesel for transport fuel

The main marketable products from the mill are: the oils - Crude palm oil (CPO) and palm kernel oil (PKO) - and the palm kernel meal (PKE/PKM). These form the raw materials for a huge variety of products in the food, cosmetic, cleaning, animal feed and industrial sectors as well providing feedstock for power stations and transport fuel in Europe.

The main processes involved in processing the mill products used in transport in Europe are as follows:

CPO & PKO  ->refinery (transesterification process) -> PME (palm oil biodiesel)  -> FAME (blended biodiesels) ->  Final product (bioidiesel blend, blended with fossil diesel)

File 514

(Image source: Proforest, 2011)

To make biodiesel suitable for the EU market, the palm oil (CPO and PKO) is transported to a refinery where it is processed (through a process called transesterification) into Palm Methyl Ester (PME). This happens either in Europe, using imported palm oil, or in Southeast Asia. The PME is then blended with similar products made from other oils (e.g. rapeseed and soy). At this point, the blended product is called FAME (Fatty Acid Methyl Ester). The FAME is mixed with fossil fuel diesel at an oil refinery to make the finished product. In the UK, FAME accounts for up to 7% of the finished fuel (as reported in 2011).

PME is made both in Indonesia and Europe, while FAME and the end-product (biodiesel and fossil diesel blend) is mostly blended in Europe.

In the UK the biodiesel blend is distributed via underground pipes from coastal refineries to terminals in the Midlands. There is also a network of independent coastal terminals which distribute fuel. It is then transported from these terminals or depots to petrol stations and private and public sector customers.


From mill to power stations: palm oil products for electricity  generation

Palm oil (CPO and PKO) can be used as feedstock for power stations as well as palm kernel meal (PKM) directly – i.e. it is shipped directly to Europe and transported to the power stations requiring it. Palm oil is termed a bioliquid, while PKM is termed a solid biomass.

Palm oil is also processed into other products, including Palm Fatty Acid Distillate (PFAD), stearin and olein at refineries in Europe before being distributed for use in power stations.

PKM -> direct to power stations and used for energy generation and co-firing with coal (burning coal and PKM/PKE together).

CPO -> energy generation

CPO & PKO -> Palm Fatty Acid Distillate (PFAD) -> energy generation (co-firing with other fuel) (potential)

Biodiesel can also be used to generate electricity.

NB: The processes are recorded as in use or having potential for use by Proforest in their 2011 report.

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(Image source: Proforest 2011)