BENEFITS OF CDM APPLICATION ON THE LCA PERSPECTIVE A CASE STUDY ON MALAYSIAN PALM OIL INDUSTRY

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1 LCA AgriFood ASIA Monday 9 th March 2015, SIRIM, Shah Alam BENEFITS OF CDM APPLICATION ON THE LCA PERSPECTIVE A CASE STUDY ON MALAYSIAN PALM OIL INDUSTRY Onn Chiu Chuen, Sumiani Yusoff, Department of Civil, Faculty of Engineering, University of Malaya, Lembah Pantai, Kuala Lumpur, Malaysia. onnchiuchuen@um.edu.my

2 KYOTO PROTOCOL Agreed on 11th December 1997 under an international agreement linked to the United Nations Framework Convention on Climate Change (UNFCCC) Annex I Parties committed to an agreement in reducing 6 main GHG emissions such as carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulfur hexafluoride (SF4), Hydrofluorocarbons (HFCs), and Perfluorocarbons (PFCs)

3 CLEAN DEVELOPMENT MECHANISM (CDM) Defined under Article 12 of the Kyoto Protocol which aimed to help Annex I countries meet their commitment and promote sustainable development in non-annex I parties As a non-annex I countries, Malaysia is not bound by any commitment to reduce GHG emission, but by participating in the CDM, Malaysia could benefit from the monetary investment of the projects. On 12th March 1999, Malaysia became a signatory to the Kyoto Protocol and announced the country s ratification of the Protocol on 4th September 2002

4 CLEAN DEVELOPMENT MECHANISM (CDM) Initially, CDM was introduced in Malaysia through the Energy Policy & 8th Malaysia Plan with the main focus on energy. However, in recent years the involvement of palm oil industry in CDM project have increase gradually. Carbon credits or Certified Emission Reduction (CERs) revenues from CDM project in the palm oil industries contributed to almost 59% of overall CERs revenues in the country at year CDM practise have thus proven to be financially beneficial for the palm oil industry.

5 IMPORTANT OF THIS RESEARCH The objective of the research is to carry out a case study on local palm oil industry to discover the benefits of CDM implementation on LCA perspective

6 PRODUCTION OF MAJOR WORLD VEGETABLE OILS AT 2013 Cottonseed 3.0% Peanut 3.3% Coconut 2.0% Olive 1.8% Palm Kernel 3.9% Sunflower seed 9.2% Rapeseed 15.5% Soybean 26.3% Palm 34.8% Major Vegetable Oils Palm Soybean Rapeseed Sunflower seed Palm Kernel 6.99 Peanut 5.15 Cottonseed 5.58 Production (Million Metric Tons) Coconut 3.45 Olive 3.15 TOTAL Production (in Percentage) Source: USDA (United States Department of Agriculture), Table 03: Major Vegetable Oils: World Supply and Distribution (Commodity View)

7 WORLD PRODUCTION OF PALM OIL 2013 Major Production Countries Production (Million Metric Tons) Indonesia 30,500 Thailand 3.6% Columbia 1.8% Nigeria 1.6% Other 7.8% Malaysia 20,161 Thailand 2,150 Nigeria 1,040 Colombia 930 Other 4,634 Malaysia 33.9% Indonesia 51.3% Production (in Percentage) Source: USDA (United States Department of Agriculture), Table 11: Palm Oil: World Supply and Distribution

8 MAJOR EXPORT PRODUCTS- PALM OIL 5TH

9 PALM OIL ACTIVITIES IN MALAYSIA CPO production CPO averaged price Export amount of CPO Export earning of CPO Oil Palm plantation area (mature) Oil Palm plantation area (immature) Average oil yield per hectare million tonnes RM2,371 per tonne million tonnes RM 43 billion 4.71 million hectares 0.74 million hectares 4 tonnes Source:

10 WORLDWIDE PALM OIL CONSUMPTION Consumer products (cosmetics, detergents, etc) 24.0% Energy (fuels, etc) 5.0% Foods 71.0% Use by (in Percentage)

11 METHODOLOGY Data Collection Palm oil Mill with CDM implemetation Compilation and analysis data Using LCA methodology in accessing feasible benefits of CDM strategies for palm oil industry.

12 LCA (LIFE CYCLE ASSESSMENT) Life cycle assessment (LCA) is a process that determines the environmental impacts of products or processes through it s life cycle. Processing Manufacturing Distribution Extraction of raw materials The "life-cycle" of a product Use of the product Disposal or possible recovery of the product.

13 SITE SELECTION The palm oil mill implemented CDM project through installation of biogas capturing system on closed Continuous-flow Stirred Tank Reactor (CSTR) anaerobic treatment of Palm Oil Mill Effluent (POME) The captured biogas will be utilized for on-site power generation with steam turbine and two 0.5 Megawatt gas engines.

14 PALM OIL MILL LOCATED AT PERAK Process an average of 80 metric tons of Fresh Fruit Bunches (FFB) per hour and almost 525 thousand tonne of FFB per year The operation at the mill also results in approximately 0.6 m3 of POME/ton of FFB processed Generating approximately 315,000 m3 of wastewater per year Based on 3 months monitoring from September to November in 2009, the incoming POME COD are in the average of 66.1 thousand ppm.

15 BASEDLINE VS PROJECT BOUNDARY

16 MONITORING ON THE BIOGAS PRODUCED THROUGH POME TREATMENT FOR 3 MONTHS (SEPTEMBER NOVEMBER 2009) Month FFB Processed, tons POME transferred to AD tank, m³ Biogas Produced, m³ Biogas burned by flared, m³ Biogas consume d at power plant, m³ Electricity generated by biogas engine, kwh Methane concentr ation, % Sep Oct Nov Total 136,088 78,337 2,510,771 1,975, , ,292 Average These data will be used for emission reduction calculation which based upon AM002: Avoided Wastewater and On-site Energy Use Emissions in the Industrial Sector methodology provided by UNFCCC. The total emission reduction achieved is 10,417 tco₂e.

17 CONSIDERING 754,292 KWH OF POWER SAVING THROUGH BIOGAS ENGINE AND 10,417 TCO₂E EMISSION REDUCTION THROUGH CAPTURING OF THE METHANE GAS. The implementation of CDM can save a total score of 100.6k in damage to environment. Results generated through SimaPro software using Eco-indicator 99 (H) v2.07 / Europe EI 99 H/H Weighting methodology

18 LCA RESULT ON MAXIMUM EMISSION REDUCTION However, if all biogas can be reverted into biogas power plant without being flare the emission reduction will increase to approximate 98% of baseline emission at19,593 tco₂e. Whilst, the amount of power generated by biogas engine is expected to reach 4 million kwh with the biogas engine efficiency at 1.6 kwh of energy generated per volume (m 3 ) of methane supplied As a result, 387k of Eco-indicator point achieved

19 RESULTS The million of score with production 136 kton of fresh fruit bunch (FFB) is comparable to around 38700% of the environmental impacts produced by single person annually. With Malaysia yearly production of 90 million tons of FFB at 2009 and 28.3 million people in Malaysia, thus emission reduction through CDM will be able to save 0.9% of the total environmental impacts in Malaysia. As in research done by Yusoff & Hansen (2007), CPO production is responsible for 3.5% of yearly environmental impacts in Malaysia, implementation of CDM for treatment for POME will help in reducing almost 25% of total impacts generated by palm oil industry. Source: Yusoff, S., and Hansen, S.B., Feasibility Study of Performing an Life Cycle Assessment on Crude Palm Oil Production in Malaysia.

20 CONCLUSIONS Vegetable oils had emerged as a potential replacement for depleting fossil fuels in the market, especially with its potential as biodiesel. CDM brought a new lifeline to palm oil industry in mitigation GHG emissions and consequently increase the sustainability of oil palm products Through this research, it was found that the introduction of CDM into palm oil industry not only helps to improve the treatment of wastewater in the palm oil mill due to technology transfer, but importantly is also able to reduce the total environment impact generated from palm oil industry to at least 25% of overall damages generated.

21 THANK YOU Onn Chiu Chuen & Sumiani Yusoff (2012): Benefits of clean development mechanism application on the life cycle assessment perspective: A case study in the palm oil industry, Journal of the Air & Waste Management Association,62:3,