White paper

Potential for advanced biofuel production from palm residues in Indonesia

Alternative fuels
Indonesia’s goals of national greenhouse gas (GHG) emission reduction and biofuel production could be pursued synergistically through the promotion of more sustainable palm oil and biofuel production practices. One strategy to produce low-carbon renewable energy is to create advanced biofuel from unused palm residues. Biofuel made from palm fronds, trunks, or empty fruit bunches that are not needed for other purposes could deliver high GHG savings while supporting the agricultural economy and displacing oil imports. This study assesses the production and other uses of palm residues and estimates the amount that could be sustainably available for biofuel.
Only residues that are not needed for other uses are considered as sustainably available in our assessment. Palm fronds and trunks from pruning and replanting are generally left in the field as fertilizer and mulch, serving an important role in sustainable palm cultivation. Some processing residues, such as the palm kernel shells and palm press fiber, are combusted to produce heat and electricity to power the palm oil milling process. Around 24% of total palm residues are not needed for other uses and can be considered sustainably available for biofuel without risking significant indirect impacts. This amounts to 34 million tonnes biomass per year on a national level, which could potentially displace 7.4 million tonnes of diesel and gasoline, or 15% of total road fuel consumption. Additionally, the Indonesian palm oil industry could produce 1.5 million tonnes per year of methane from palm oil mill effluent, which could potentially displace 1.6 million tonnes of diesel or gasoline, or 3% of Indonesia’s total annual diesel and gasoline demand. 
Supporting advanced biofuel from wastes and residues in Indonesia could make a meaningful contribution to the country’s GHG reduction targets with low risk of negative indirect impacts. Because advanced biofuels are often considered high-risk ventures by investors, policy and fiscal support by the Indonesian government would be needed to encourage commercialization of this industry.