Environmental impacts and improvement prospects for environmental hotspots in the production of palm oil derived biodiesel in Malaysia

Abstract

Palm oil is the largest and fastest growing vegetable oil on the world market and the prospects of biodiesel production will further spur the expansion. In order to contribute to the knowledge base on current environmental impacts and potential improvements in the palm oil industry this study sets out to generate LCI data for central, yet underexplored elements in the production of biodiesel with a focus on greenhouse gasses (GHG). The research follows an attributional modelling framework, but does include system expansion to account for the use of residues from the palm oil production. The reference flow of the study is 1 MJ palm oil derived biodiesel, which has been chosen to facilitate comparisons of the results to fossil diesel and other biodiesels. The impact focus is on global warming potential with extensive quantification of GHG emissions and potential reduction. Other impact categories are included mainly with the purpose of documenting whether the proposed GHG reduction initiatives result in problem shifting. Land use changes (LUC) are the most controversial aspect of palm oil production with large potential GHG emissions and impacts on biodiversity. With global warming and extinction of animals and plants in tropical areas being easily communicated to the public, palm oil has been the target of numerous scare campaigns. Conversely, the palm oil industry is adamant that palm oil and oil palm plantations are sequestering carbon and supporting a wide range of flora and fauna. Through critical selection of literature data, field studies and application of state-of-the-art LCA methodology, this study is quantifying the GHG emissions from palm oil related LUC for the two most common previous land uses in Malaysia, namely logged-over forest and rubber plantations. In order to be able to assess the impacts from average palm oil production in Malaysia, a Malaysian average LUC scenario was set up and assessed. Solid residues from the production of palm oil constitute two tons dry weight organic matter per ton palm oil produced. Current use of this potential resource is limited to mulching of plantation residues and empty fruit bunches (EFB) from the mills and use of press fibre and kernel shells in the mill boilers. The mill wastewater called palm oil mill effluent (POME) is treated anaerobically in open lagoons emitting large amounts of methane. In recent years it is becoming more popular to sell kernel shells for use in industrial boilers, and biogas plants with methane capture for the POME treatment are slowly making their entry, but the potential uses and environmental benefits of such uses have only been sporadically explored. Residue energy recovery for substitution of fossil fuels is explored here through application of biomass power plants, pyrolysis and biogas production. Modelling the results of the LUC study and the residue use study into a GaBi model, various scenarios were set up to test the environmental potentials of management decisions in respect to LUC choices, yield optimization and residue use. The study also includes an assessment of the management practices of corporations and smallholders and an economic feasibility study to assess financial aspect of environmental improvements. The results show that biodiesel production from conventionally produced palm oil with national average LUC emissions emits only marginally less GHG than the life cycle emissions of fossil diesel. This study, however, shows that significant environmental improvements are available with currently available technologies to bring the impacts well below the fossil diesel emissions, and do so with economic profitability. Residue use shows a big potential for improvement. The conventional residue management causes net GHG emissions where the prospective fossil fuel substitutions through residue energy recovery alone is so significant that net GHG emissions from the PME production process can become close to CO2 neutral when not including LUC. An added bonus for the palm oil industry is that such improvements are likely to result in a net income through sales of residues and/or residue use products. LUC emissions can potentially result in so large GHG emissions when high-carbon stock land is converted to oil palm that no environmental improvements or management strategies will be able to make the produced palm oil sustainable. On the other hand, conversion of low-carbon stock land or land with a temporary carbon stock can result in low or even negative LUC emissions thus giving PME carbon neutral potentials when combined with environmental initiatives in the production. A methodological choice made in this study of focusing on the Malaysian average LUC emissions results in LUC contributions of app. 40% of the total conventional biodiesel production emissions of 70 g CO2/MJ. The impacts from LUC as well as the biodiesel production process can, however, be improved through management strategies. Increasing yields have a direct correlation with lower LUC emissions per MJ biodiesel and with potentials of up to 75% yield increases from the plantations, Malaysian average LUC emissions could thus be reduced by about 50%, which in combination with residue use would lower the overall PME emissions by 80%. Such a scenario would require an optimization of the production system, which may be possible from a few dedicated producers, but is very unlikely as a Malaysian average scenario in a foreseeable future. However, the two future scenarios set up in this study show that the GHG emissions from biodiesel are likely to drop by almost 15% in 2015 and close to 65% by 2020 thus putting biodiesel on track to meet the sustainability criteria. Assessing other impact categories than global warming potential (GWP) shows that all impact categories experience reduced impacts due to the proposed environmental improvements in the management scenarios set up in this study. Thus, even though most other impact categories experience lower reductions that GWP, it can be concluded that the proposed improvements do not result in problem shifting. Through the data collection process in this study it has become evident that many holes in life cycle inventory data for palm oil production still exist. Thus, this study recommends extensive further studies within areas like biodiversity, nitrogen emissions, water footprint and many more as well as further studies on LUC and residue use.