Clean 2008, 36 (5 6), 453 465 S. J.

Santosa 453

Sri Juari Santosa1

1
Department of Chemistry, Faculty of
Mathematics and Natural Sciences,
Gadjah Mada University, Yogyakarta,
Indonesia.
Review
Palm Oil Boom in Indonesia: From Plantation to
Downstream Products and Biodiesel
Indonesia has been the biggest producer of palm oil (PO) in the world since 2005. The
total production in 2007 was 17.0 and 1.9 million tons of crude palm oil (CPO) and
crude palm kernel oil (CPKO), respectively. More than 70% of the CPO was exported
and 87% of the domestic consumption was used for food. The production and subse-
quent refining and fractionation of CPO and CPKO generated biomass by-products
that consists of trunk, frond, empty fruit bunch (EFB), fiber, shell, and palm kernel
meal (PKM), and discharged wastes of palm oil mill effluent (POME) as well as palm
fatty acid distillate (PFAD). The amount of by-products and wastes produced has been
growing very rapidly and efforts to diversify and improve their utilization are a great
challenge. As claimed in many research reports, the by-products and wastes could be
potentially utilized as sources of energy, animal feed, chemicals, paper pulp,
advanced materials, medicines and food ingredients. A more important role may be
played by PO as the Indonesian Government took further steps in 2006 to become the
world's largest producer of biodiesel. As a starting point, Presidential Instruction No.
1/2006 for the Production and Use of Biofuel as Alternative Fuel was issued in January
2006. Responding to this Presidential Instruction, at least 15 companies are planning
to establish new larger biodiesel refineries to enhance the currently produced 82.5
million L of biodiesel. It is planned to start production in 2008/2009 with two new
refineries that have a total capacity of ca. 1,600 million L/year.
Keywords: Biodiesel; Biofuel; Indonesia; Palm kernel oil; Palm oil;
Received: February 20, 2008; revised: March 27, 2008; accepted: April 15, 2008
DOI: 10.1002/clen.200800039

1 Introduction Elaeis guineensis was originally grown in the humid tropics of

Oil palm trees (Elaeis) belong to the Arecaceae family and comprise
two species, i. e., Elaeis guineensis and Elaeis oleifera. The Elaeis guineensis
is native to West Africa while Elaeis oleifera is native to tropical Cen-
tral and South America.
Correspondence: Prof. S. J. Santosa, Department of Chemistry, Faculty of
Mathematics and Natural Sciences, Gadjah Mada University, Sekip Utara
Kotak Pos Bls. 21, Yogyakarta, Indonesia.
E-mail: sjuari@yahoo.com
Abbreviations: BPPT, Agency for Assessment and Application of Tech-
nology; CNO, coconut oil; CNOOC, China National Offshore Oil Corp.;
COD, chemical oxygen demand; CPKO, crude palm kernel oil; CPO,
crude palm oil; EFB, empty fruit bunch; EU, European Union; FFA, free
fatty acid; FFB, fresh fruit bunches; HDL cholesterol, high-density lipo-
protein cholesterol; LDL cholesterol, low-density lipoprotein cholester-
ol; Lemigas, Center for Oil and Gas Technology; MSG, monosodium glu-
tamate; NAD, Nanggroe Aceh Darussalam; NSP, non-starch polysaccharide;
Pertamina, state-owned petroleum industry; PFAD, palm fatty acid dis-
tillate; PHA, polyhydroxyalkanoate; PIR, Perkebunan Inti Rakyat; PKM,
palm kernel meal; PO, palm oil; POME, palm oil mill effluent; ppm, part
per million; PTP, PT Perkebunan; RBDP olein, refined, bleached, and deo-
dorized palm olein; RBDP stearin, refined, bleached, and deodorized
palm stearin; RBDPK olein, refined, bleached, and deodorized palm ker-
nel olein; RBDPK stearin, refined, bleached, and deodorized palm kernel
stearin; RBDPKO, refined, bleached, and deodorized palm kernel oil;
RBDPO, refined, bleached, and deodorized palm oil
Africa, mainly in the coastal belt between 108 N latitude and 108 S
latitude. Elaeis oleifera (also known as Elaeis melanococca) is frequently
found at riversides or in swampy areas of tropical Central and South
America. The oil obtained from Elaeis oleifera is used locally for cook-
ing, soap manufacturing, and lamp fuel, but the plant has not been
cultivated on a commercial scale previously. For commercial pur-
poses, the tropical countries in Central and South America grew
Elaeis guineensis, which was first introduced to Guatemala from
Sierra Leone in 1920, from Malaysia to Panama in 1926 and Hondu-
ras in 1927, and later other introductions were from Java (Indone-
sia) and Congo [1]. As a result, Elaeis guineensis is now spreading
throughout the tropical regions in the world with countries such as
Indonesia and Malaysia being the main producer of palm oil (PO)
from Elaeis guineensis. In addition to Indonesia and Malaysia, Thai-
land and Papua New Guinea are the other important PO producers
in Southeast Asia. Nigeria, Congo, The Ivory Coast, and Cameroon
are important countries producing PO in Africa, while Colombia,
Ecuador, Honduras, and Costa Rica are the main PO producers in
America.
PO has been an important commodity for thousands of years. It
may have been traded in Egypt, since archaeological evidence indi-
cated that PO was most likely available in ancient Egypt. The excava-
tion of an early tomb dated to 3000 B.C. at Abydos, revealed a mass
of several kg of palm oil in a vessel. Even before the first civilizations

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454 S. J. Santosa
appeared in Africa, PO was eaten by populations living along the
coast between Senegal, Angola and the Congo River basin. In
Europe, PO became more widely used during the Industrial Revolu-
tion and was utilized as grease and to produce soaps, candles and
lubricants. In addition, kernel husks recovered from the remaining
chaff of the palm fruit were used as cattle feed during the industrial
revolution [1].
2 Oil Palm Plantation
The oil palm was first introduced to Southeast Asia in 1848, when
four seedlings were brought from Nigeria by the Dutch and planted
in the botanical gardens at Buitenzorg (now Bogor, West Java). For
some years, this introduction did not lead to a plantation industry
but only involved ornamental purposes [2]. Later, four seedlings
from Bogor were cultivated in Deli (East Sumatera) and it was
noticed that the trees grew more quickly and bore a richer fruit
than their counterpart in West and Central Africa. This superiority
probably reflected the more optimal soils, rainfall, and sunshine
conditions for the oil palm in Southeast Asia than in its original
home.
2.1 Plantation Area
The relatively high yields and low risks involved in planting oil
palm in Deli inspired traders to commercially plant oil palm in
Southeast Asia. Using the seedlings from the Deli palms, the first
large-scale oil palm plantation was set up by the Dutch trader Hallet
in Sumatra, which was followed by a plantation by his friend Fau-
connier in Malaya in the 1910s. By 1919 more than 6,000 ha had
been planted in Sumatra and this figure rose to 32,000 ha by 1925.
Over the next five years, the coverage of oil palm plantations in
Sumatra was doubled [1]. PO produced in the 1930s to 1940s was
restricted mainly for use as a lubricant [3]. Until recently there were
three types of oil palm, namely dura, pisifera, and tenera planted in
Indonesia [4]. Tenera is the most widely cultivated palm in the world
because it gives the highest yield of oil per ha [5].
After Indonesia proclaimed and gained its independence in 1945,
the Dutch plantation system collapsed, and all of the colonial plan-
tations were nationalized and placed under the control of Perusa-
haan Perkebunan Negara (the State Plantation Company) in 1957.
Until the end of the Orde Lama (Old Order) regime in 1967, the oil
palm plantations covered an area of no more than 106,000 ha,
including 65,573 ha of state-owned plantations [3].
The change of regime from Orde Lama to Orde Baru (New Order)
also led to changes in the policies for the oil palm sector. The gov-
ernment in this New Order era actively expanded the oil palm plan-
tations, primarily in North Sumatera to reach 176,408 ha in 1979
through direct investment via the state-owned company PT Perke-
bunan (PTP). When the price of PO in the international market was
exceptionally high in 1974, efforts were made to increase the PO
production. For this purpose, the government established a scheme
known as Perkebunan Inti Rakyat (PIR) or Nucleus Estate and Small-
holder, where the state-owned companies provided seedlings, tech-
nical assistance and finance to smallholders. Their crops were then
purchased by companies' mills [6]. With this PIR scheme, the oppor-
tunity for smallholders (farmers) to possess their own mills was
opened. As a result, more and more farmers and small companies
were attracted to cultivate oil palm, and therefore, the growth of oil
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Clean 2008, 36 (5 6), 453 465
Figure 1. Expansion and annual growth of oil palm plantations in Indone-
sia from 1985 to 2007.
palm area after 1975 was a result of both the state-owned companies
and in addition, smallholders and private (both foreign and domes-
tic) companies [6].
Malaysia was the world's biggest PO producer in the 1970s. In the
1980s, with the availability of much larger areas of land for oil palm
plantation and a cheaper work force, Indonesia set a target to over-
take Malaysia as the main worldwide producer of PO. To achieve
this target, the government handed out vast areas of land to both
foreign investors and domestic business groups for oil palm planta-
tions. These plantations were not only limited to the traditional
areas in Sumatera but also new areas in the eastern part of Indone-
sia. As a result, the plantation area expanded from 176,408 ha in
1979 to 630,000 ha in 1985. However, the target to supersede Malay-
sia as the leading PO producer was still not achieved until the
1990s.
The fact that the domestic and world demand for vegetable oil
including PO grew rapidly, coupled with the need for biofuel as a
substitute for fossil fuels with their decreasing reserves and produc-
tion, has again accelerated the expansion of oil palm plantations in
Indonesia. From 630,000 ha in 1985, the plantation area had
increased to 1,117,000 ha in 1990, doubled again in 1991, and
became three, four, five, six, seven and nine times larger in 1994,
1997, 2000, 2002, 2004, and 2006, respectively, Fig. 1. In 2007, the
plantation area reached 6.65 million ha or more than ten times
greater than that in 1985.
The annual growth of oil palm plantation area from 1986 to 1997
tended to increase from 12 to 14%, see Fig. 1. The growth then fell to
5% just after the Asian financial crisis in 1997 to 1998 and gradually
increased again during the Reformation Era which replaced the
Orde Baru in 1998. In the last two years, the growth has sharply
increased to 15 and 19% in 2006 and 2007, respectively. These sharp
expansions in 2006 and 2007 were driven by the efforts of govern-
ment to accelerate the development of biofuel from PO after Indone-
sia became a net oil importer in July 2004 [7].
The accelerated increase in oil palm plantation area also yielded
an increase of mature oil palm plantation. From the financial crisis
to 2007, the mature oil palm area increased from 1.83 to 4.39 mil-
lion ha, see Fig. 2. The mature plantation constituted 64% of the
total plantation area in 1998 and reached 76% in 2005. Since 2005,
the portion of mature oil palm to the total plantation has decreased
because of the vast expansion of new oil palm plantations in 2006
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Clean 2008, 36 (5 6), 453 465
Figure 2. Mature oil palm area and its proportion of the total area under
palm.
and 2007, as shown in Fig. 1. From 2007 to 2012, the total area for
oil palm will be enlarged from 6.65 to 8.90 million ha, and the
mature oil palm area is also estimated to increase significantly, see
Fig. 2.
2.2 Plantation by Company
As described earlier, during the Orde Lama, the state-owned company
dominated the oil palm plantation business. Privatization by small-
holders (farmers) occurred during the PIR scheme starting in 1975
and was conducted by the government in Orde Baru, and eventually,
the privatization of large estates was implemented predominantly
by later governments in the Reformation Era. From 5.6 million ha
of oil palm plantations in 2006, the proportions of large private
estates, smallholders, and state-owned company involvement were
ca. 50, 33, and 17%, respectively [6]. The portion of large private
estates in 2007 was more than 50%, since from a total oil palm plan-
tation area of 6.65 million ha, 3.98 million ha was run by these
estates. The breakdown of private estates involved in oil palm plan-
tation projects in 2007 is summarized in Tab. 1. The largest estates
were the Salim Group and China National Offshore Oil Corp.
(CNOOC) with plantation areas of 1.16 and 1.00 million ha, respec-
tively. Other estates, i. e., Sinar Mas, PBB Oil Palm Bhd., Raja Garuda
Mas, London Sumatera, Wilmar Holding, Astra Group, Sampoerna
Agro, and Surya Dumai Group are running plantation areas of 0.32,
0.27, 0.26, 0.25, 0.21, 0.19, 0.17, and 0.15 million ha, respectively.
The latest news indicates that the Astra Group will expand its oil
palm plantations in Sumatera, Kalimantan, and Sulawesi to give a
combined total of 0.26 million ha in 2008 [8], and a new player, i. e.,
PT. Pupuk Kaltim will also enter the PO business by running 20,000
ha in 2008 [9].
As mentioned above, the ambition of the Indonesian government
to be the world's largest PO producer was achieved in 2005, and now
their ambition is to become the world's largest biofuel producer.
Efforts to reach this ambition involve pursuing the further expan-
sion of the oil palm plantation area. This expansion that is planned
to reach 8.90 million ha in 2012 will be extended again to 26.07 mil-
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Palm Oil Boom in Indonesia 455
Table 1. Private estates involved in oil palm plantation projects in 2007.
No. Estate Area (103 ha)
1 Salim group 1155.6
2 China National Offshore Oil Corp. (CNOOC) 1000.0
3 Sinar Mas 320.5
4 PBB Oil Palm Bhd 274.8
5 Raja Garuda Mas 259.1
6 London Sumatera 245.6
7 Wilmar Holding 210.0
8 Astra Group 192.4
9 Sampoerna Agro 170.0
10 Surya Dumai Group 154.1
lion ha in 2020. The vast extension will be implemented in West
Kalimantan, Riau, and Papua Provinces with 5, 3, and 3 million ha,
respectively, followed by North Sumatera, Central Kalimantan,
South Sumatera, Jambi, and East Kalimantan Provinces with 1 mil-
lion ha each. Smaller extensions will also be implemented in West
Sumatera, South Kalimantan, Lampung, South Sulawesi, Bengkulu,
Nanggroe Aceh Darussalam (NAD), Central Sulawesi, South East
Sulawesi, and Bangka Belitung Provinces. The only areas where
extension prospects are not available are Banten and West Java Prov-
inces. In summary, the order of oil palm plantation by province
from the largest to the smallest in 2012 will be West Kalimantan,
Riau, Papua, North Sumatera, Central Kalimantan, South Sumatera,
Jambi, East Kalimantan, West Sumatera, South Kalimantan, Lamp-
ung, South Sulawesi, Bengkulu, NAD, Central Sulawesi, South East
Sulawesi, Bangka Belitung, Banten and West Java, see Fig. 3.
3 Production, Consumption and Export
Nigeria, Malaysia, and Indonesia are the countries that consecu-
tively occupy the position as the biggest PO producer in the world.
Nigeria became the world's biggest PO producer in the 1960s. In
1970, the PO production of Malaysia surpassed that of Nigeria, while
Indonesia was in third position. In that year, the production of PO
in these three countries was 598, 432, 248 thousand tons for Malay-
sia, Nigeria, and Indonesia, respectively, see Fig. 4. Malaysia was
able to maintain its leading position until 2004 before being over-
taken by Indonesia in 2005. The proportion of PO production in
2005 by the two countries was 15.0 million tons for Indonesia and
14.8 million tons for Malaysia. The sharp increase of PO production
in Indonesia began just after the financial crisis in the mid 1990s,
see Fig. 4. In 1998, the production of PO was 5.8 million tons and
this has jumped to 17 million tons in 2007. This was caused by the
fact that in that period, the oil palm plantation area was expanded
extensively and most of these palms (> 64%) had reached maturity
to give a maximum production yield.
While Indonesia has cheaper labor and copious quantities of land
compared to Malaysia, it still lacks the capital and technical know-
how to maximize these advantages. This fact was proven by the fact
that nearly 25% of Indonesia's current crude palm oil (CPO) produc-
tion is derived from Malaysian investment. Indonesian nationalists
have long complained that Indonesia served as merely a source of
raw material and cheap labor for Malaysia's better-funded, more
sophisticated and considerably more profitable operations [10].
From 1965 to 1977, the PO produced by Indonesia was mostly for
export, Fig. 5. With the increasing demand for domestic consump-
tion, which has still not been accompanied by increased levels of
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456 S. J. Santosa
Figure 4. Palm oil production of Indonesia, Malaysia, Nigeria, and other
countries.
production due to the oil palms that were newly planted, the
domestic consumption balanced the export requirements in the
period between 1977 and 1998. After 1998, with aggressive expan-
sion of oil palm plantations and the dominance of mature planta-
tions, exports once again significantly surpassed domestic con-
sumption. The exported PO consists of crude and processed PO. The
proportion of these products to the total exports from 2002 to 2005
is listed in Tab. 2 [6]. It appears that the contribution of the proc-
essed PO to exports is higher than that of CPO. In addition to PO,
Indonesia also exports palm kernel oil (PKO). Unlike the PO, the
crude palm kernel oil (CPKO) makes a greater contribution to the
total export than the processed oil. Europe typically buys 61% of
Indonesia's exports of PKO, primarily for use in cosmetics, and 87%
of Indonesia's exports of palm kernel meal (PKM), which is used in
animal feed [11]. The domestic consumption of PO is mostly for food
and more precisely, for frying oil. This accounts for 87% of total
domestic consumption in 2005, while the domestic consumption
for industry was only 11%. Indonesian people are accustomed to
i 2008 WILEY-VCH Verlag GmbH & Co. KGaA, Weinheim
Clean 2008, 36 (5 6), 453 465
Figure 3. The existing and planned exten-
sion of oil palm plantation area by province in
Indonesia.
Figure 5. Exported and domestic consumption of palm oil in Indonesia
from 1965 to 2005.
fried foods. There are many varieties of fried foods in Indonesia, and
nearly all these foods need oil for their preparation.
India was the main CPO importer in the world in 2003/2004, fol-
lowed by the European Union (EU), China, and Pakistan [12]. These
countries were also the destination for Indonesian CPO export, see
Fig. 6. With a total export of CPO worth 2.35 billion US$ in 2003, the
export of CPO to India accounted for 37.7%, followed by that to
China (15.0%), The Netherlands (8.7%), Malaysia (7.5%), Singapore
(5.5%), and Pakistan (5.0%). The remaining CPO was exported to the
USA, Germany, Italy, Egypt, Bangladesh, and Saudi Arabia. Total
exports consisting of 2.35 billion US$ were achieved in 2003 from
2.89 million ton of CPO, since the price of CPO at that time was US$
813/ton. Today, the price of CPO has climbed to US$ 915/ton, follow-
ing the price of petroleum, which has exceeded US$ 100/barrel [13].
The recent growth in consumption of edible oil in India, i. e.,
from 700 to 800 million tons, is twice that of its production growth
capacity. Approximately 80% of CPO imports into India are origi-
nally from Indonesia [13]. As a competitor of India in consuming
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Clean 2008, 36 (5 6), 453 465 Palm Oil Boom in Indonesia 457

Table 2. Export of palm and palm kernel oils from Indonesia for 2002 to 2005.

Year Palm oil (106 ton) Palm kernel oil (103 ton)

Crude Processed Total Growth (%) Crude Processed Total Growth (%)

2002 2.81 3.53 6.34 595 143 738

2003 2.89 3.49 6.38 0.95 523 137 660 10.57
2004 3.82 4.84 8.66 35.52 706 198 904 36.97
2005 4.54 5.76 10.30 18.94 770 230 1000 10.62

Figure 6. Main exports (higher than 100

million US$) of Indonesian crude palm oil
(CPO) by country in 2003.

edible oil, China raised its import of CPO to 3.34 million tons during
the last nine months of 2007. This represents a 4.4% increase com-
pared to the same period in 2006. The import of China's CPO is cur-
rently mainly from Malaysia and Indonesia.
4 Processing, Refinery and Product
Utilization
Oil palm is harvested as fresh fruit bunches (FFB) throughout the
year. The normally expected range of production varies between 20
to 25 tons of FFB per hectare, depending on genetic characteristics
and cultivation practices. The FFB is brought by trucks or other
modes of transport to the PO mills. The oil palm fruit composes of
mesocarp in the outer part, which contains PO, and kernel with
hard shell in the inner part, which contains PKO.
4.1 Processing
The FFB have to be processed within 24 h or otherwise free fatty
acids will be built-up rapidly due to the action of fat splitting
enzymes in the mesocarp. In order to avoid the action of the
enzymes, the FFB must be sterilized by steaming at a pressure 3 kg/
cm2 and then the fruits are separated from the bunch stalk [6]. This
separation process following the sterilization is known as stripping
[14]. The empty bunches are then sent to the boiler station to be
used as fuel, see Fig. 7. Before the oil palm fruits are extracted to
yield their oil content, they are first reheated in a steam-heated ket-
tle to loosen the mesocarp. The extraction is typically performed by
pressing with a screw-type press to release the oil. The rate of oil
extraction averages between 21 and 23%. The extracted oil contains
water and impurities originating from the mesocrap and other veg-
etable materials. The oil is then purified to remove the water and
impurities to produce CPO. The water and the impurities are first
removed by settling and centrifugation, and then the dissolved
water in the oil is removed by vacuum evaporation. Good clarifica-
tion should produce PO with a moisture content of 0.08% and
impurities of 0.02%, which is then suitable for export [6].
The cake produced as a residue of the oil extraction consists of
nuts and fibers. It is transported by the screw-type cake breaker con-
veyor to a separating column and fiber cyclone where the nuts are
separated. After sufficient drying, the nuts are fed into a nut cracker
and the mixture of kernels and shells exiting this nut cracker is sep-
arated by use of a winnower and hydro-cyclone. The kernels are
then dried using steam so that the water content is reduced to 7%
[6]. The fiber and shell by-products are used as fuel for the boiler sta-
tion. Before 1980, oil palm in Indonesia was only processed to pro-
duce CPO and kernel, and by-products of empty bunch, fiber, and
shell for use as fuels for the boiler stations. All CPO and kernel were
directly exported, since there was no kernel crushing plant or refin-
ery plant for CPO and CPKO in Indonesia.

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458 S. J. Santosa
Figure 7. Current process operation and products of palm oil mills and
kernel crushing plants in Indonesia.
4.2 Refinery and Product Utilization
Kernel crushing plants as well as CPO and CPKO refineries were
established in the 1980s. Since then, CPKO and palm kernel meal
(PKM) have been domestically produced, see Fig. 7, and various
downstream products of CPO and CPKO have also been generated,
see Fig. 8. While the average rate of oil extraction from mesocarp is
between 21 and 23%, the average rate of extraction from kernel is
only between 4.5 and 5.5%. PKM as a by-product of CPKO is currently
discarded due to its grittiness. In addition to PKM, palm oil mill
effluent (POME) is generated as waste. To date, POME is only dis-
carded to ponds or used as landfill filler.
The refining of CPO and CPKO primarily consists of neutraliza-
tion, bleaching, and deodorizing. Neutralization is required to neu-
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Clean 2008, 36 (5 6), 453 465
tralize free fatty acids that may develop a rancid taste due to their
reaction with oxygen in the air. Bleaching is used to remove color
and dissolved impurities. An adsorbent such as zeolite may be
employed for this purpose. Deodorizing is performed to remove any
smell and taste in the oil. This is achieved by blowing steam through
the heated oil and a vacuum draws off the steam along with the
smells and tastes [3].
Through neutralization, bleaching, and deodorizing, a refined,
bleached, and deodorized palm oil (RBDPO) is obtained from CPO
and palm fatty acid distillate (PFAD) is produced as a by-product.
RBDPO is a light yellow liquid or semi-solid at room temperature. It
is used for industrial frying oil, margarines, shortenings, ice cream,
condensed milk, soap, and other products [3]. In the case of PFAD, it
is a light brown solid at room temperature, which melts to a brown
liquid on heating. PFAD is used in the soap and animal feed indus-
tries as well as a raw material for oleochemical industries. Vitamin
E can be extracted from PFAD [15].
As with most other vegetable oils, POs in its original condition
have a limited application. Hence, their properties need to be modi-
fied in order to extend their range of utilization. Fractionation is
the most common secondary process undertaken in most oil refin-
eries. This means that the PO is cooled under controlled conditions,
separating the high melting point components in the oil from the
low ones. This separates a clear yellow liquid at room temperature,
named as a refined, bleached, and deodorized palm (RBDP) olein
from a white solid at room temperature named as RDBP stearin.
RBDP olein and RBDP stearin are used for different end-products.
RBDP olein for edible applications is sold as cooking oil, used in the
manufacture of margarines and shortenings, and in the industrial
frying of processed foods. RBDP stearin for edible uses is used for
margarines and shortenings, a source for producing specialty fats
for coatings in confectionery, and for non-edible uses, in the soap
and oleochemical industries [3].
As for PO, the refining of CPKO firstly yields refined, bleached,
and deodorized palm kernel oil (RBDPKO). A portion of the RBDPKO
is fractionated into RBDPK olein as the liquid component and
RBDPK stearin as the solid component. RBDPKO is used in edible
applications, e. g., in the production of margarine and shortenings
and in non-edible areas, e. g., soaps, detergents, etc. RBDPK olein is
commonly used as cooking and frying oil and as the base oil for the
manufacturing of margarine. The applications in non-edible fields
include its use in the production of soaps, shampoos, detergents,
cosmetics, and lubricants [3]. RBDPK stearin is widely used to substi-
tute for the more expensive cocoa butter in many of its traditional
Figure 8. Downstream products obtained
from crude palm oil (CPO) and crude
palm kernel oil (CPKO).
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Clean 2008, 36 (5 6), 453 465 Palm Oil Boom in Indonesia 459

Table 3. Major chemical constituents of palm and palm kernel oils (compiled from [3, 5], www.chemblink.com, www.inchem.org/documents/icsc/icsc/
eics530.htm, http://palmoilis.mpob.gov.my/publications/pod35-pantzaris.pdf), www.sjlipid.com, http://en.wikipedia.org).

Constituent IUPAC* Name Molecular Physical Property Content

Formula (%)
Melting Boiling Density Palm Palm Ker-
point (8C) point (8C) (g/cm3) Oil nel Oil

Caproic acid Hexanoic acid CH3(CH2)4COOH 3 202 203 0.920 0.3

Caprylic acid Octanoic acid CH3(CH2)6COOH 16 17 237 0.910 4.2
Capric acid Decanoic acid CH3(CH2)8COOH 31 269 0.893 3.7
Lauric acid Dodecanoic acid CH3(CH2)10COOH 44 46 298 0.880 0.2 48.7
Myristic acid Tetradecanoic acid CH3(CH2)12COOH 58.8 326 0.862 1.1 15.6
Palmitic acid Hexadecanoic acid CH3(CH2)14COOH 63 64 351 352 0.853 44.1 7.5
Stearic acid Octadecanoic acid CH3(CH2)16COOH 69.6 383 0.847 4.4 1.8
Oleic acid (9Z)-octadec-9-enoic acid CH3(CH2)7CH=CH(CH2)7COOH 13 14 360 0.895 39.0 14.8
is-9-octadecenoic acid
Linoleic acid (Z)-9,12-octadecadienoic acid CH3(CH2)4CH=CH(CH2)CH=CH(CH2)7COOH 5 229 0.900 10.6 2.6
Cia,cis-9,12-octadecadienoic (16 mmHg)
acid
Others 0.8 0.1

* International Union of Pure and Applied Chemistry

applications. In some instances, RBDPK stearin exhibits perform- mainly of palmitic acid, (1) and glycerol, (2), as well as a mixture of
ance superior to that of cocoa butter. azelaic, (3) and pimelic acids, (4). The latter compounds are normal
For certain purposes such as in manufacturing margarines, short- oxidation products of fatty acids. As will be described later, palmitic
enings, fats, cocoa butter substitute, and other food ingredients for acid is the most dominant fatty acid in PO. Hence, the analyst con-
baking, chocolate, confectionery, ice cream, snacks, and biscuits, cluded that the original material was probably PO, partly hydro-
further processes such as hydrogenation and rearrangement (inter- lyzed and oxidized during its long storage [1].
esterification) are required. In hydrogenation, hydrogen is added to
unsaturated fatty acids to convert them to saturated fats, and hence,
to increase the oxidative stability and melting point of the oils.
Depending on the extent of hydrogenation, the oils and fats can be (1)
modified to yield products of varying degrees of hardness, thus giv-
ing a wider range of utilization. Rearrangement (interesterification)
is a process that alters the distribution of fatty acids in the glycerol
moiety of the triglyceride, thus producing fats with different melt- (2)
ing and crystallisation characteristics compared to the non-interes-
terified fat [16].

5 Chemical Composition and Product (3)

Diversification
Oil palm is the most productive tree for producing oil. One hectare
of oil palm may yield 3.7 tons of CPO. This value is much higher
than that of rapeseed, sunflowers, soybeans [2], coconuts, jojoba,
peanuts, and sesame seeds [17].
(4)

5.1 Chemical Composition

As described before, the oils from oil palm can be extracted from
the mesocarp and kernel. CPO is obtained from the mesocarp, while
CPKO is removed from the kernel. The by-products of oil extraction
include EFB, fiber, shell, PKM, and POME. In the refinery plant,
RBDPO, RBDPKO, RBDP olein, RBDPK olein, RBDP stearin, and
RBDPK stearin are obtained with PFAD as the by-product.
5.1.1 Palm and Palm Kernel Oils
PO has likely been an important commodity even in the times of the
Pharaohs in ancient Egypt. A chemical analysis of a sample of the
tomb at Abydos, dated to 3000 B.C., found that the sample consisted
In spite of the fact that PO and PKO only originate from different
parts of the same fruit, but they are highly different in their major
chemical composition, see Tab. 3. PO is rich in saturated palmitic
acid, followed by monounsaturated oleic acid and di-unsaturated
linoleic acid. Since its proportion of unsaturated fatty acids is some-
what higher than saturated ones, PO is relatively unstable towards
oxidation. On the other hand, PKO is richest in saturated lauric acid
(49%), followed by saturated myristic acid (16%) and monounsatu-
rated oleic acid (15%). The domination of long chain saturated fatty
acids in PKO makes PKO stable towards oxidation and gives it sharp
melting properties. Since the long-chain saturated fatty acids are

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460 S. J. Santosa Clean 2008, 36 (5 6), 453 465

solid at room temperature, the fractionation of PKO yields RBDPK

stearin as the major fraction. From the point of view of fatty acid
composition, PKO is very similar to coconut oil (CNO). Among the 17
major oils and fats in use for world trade, PKO and CNO are the only (7)
two vegetable oils enriched in lauric acid [18].
Saturated fatty acids such as lauric, myristic, and palmitic acids
had been claimed by the WHO in 2003 to have effects such as
increasing blood cholesterol and total to high-density lipoprotein
(HDL) cholesterol ratio levels, with a concomitant increase in the
risk of coronary heart disease [19]. This claim by the WHO was con-
tested by Chu-Sing [20] who cited many research outcomes showing
Squalene, (8), is a biochemical precursor to the entire family of
that PO intake increased the levels of HDL cholesterol (good choles-
steroids. Oxidation of its terminal double bond yields 2,3-squalene
terol) and reduced the levels of low-density lipoprotein (LDL) choles-
oxide which undergoes enzyme-catalyzed cyclization to produce
terol (bad cholesterol) in the blood.
lanosterol, followed by cholesterol and other steroids.
As mentioned above, in order to meet the desirable texture and
stability, unsaturated fatty acid dominated oil must be processed by
hydrogenation. Hydrogenation not only transforms unsaturated
(8)
fatty acids to saturated ones but also generates unnatural monoun-
saturated trans-fatty acids. It is claimed that the consumption of
mono trans-fatty acids increases harmful LDL cholesterol levels in
the blood.
The improvement of stability achieved for unsaturated fatty acids Vitamin A exists in several forms. The major form is an alcohol
is not so important for the saturated fatty acid dominated PKO. As a form of retinol, (9). It can also exist as an aldehyde (retinal) or as an
result, the risk of monounsaturated trans-fatty acid formation is acid (retinoic acid). Vitamin A is an essential human nutrient.
absent. Therefore, PKO may be heated without the risk of creating
harmful trans-fatty acids. This makes PKO more acceptable for use
in edible applications and justifies its generally higher price com-
pared with most other oils. In addition to fatty acids as the major (9)
component, PO also contains ca. 1% of minor substances such as
phospholipids, b-carotene, ubiquinone, squalene, vitamin A, and
vitamin E, etc. [21, 22]. As summarized from various sources by May
[23], the concentration of these minor components in CPO is typi-
cally in the range of tens to hundreds of parts per million (ppm).
Phospholipids, (5), function as antioxidant synergists and as a sur- Vitamin E is a series of compounds consisting of methylated phe-
face active agent to disperse impurities in oil. b-carotene, (6), is also nols. Natural vitamin E may exist in eight different forms, i. e., four
an anti-oxidant and can be used to sequence damaging free radicals tocopherols and four tocotrienols. All of them can donate a hydro-
in the body. It is the substance responsible for the reddish color of gen atom to reduce free radicals such that they are good anti-oxi-
PO. Unfortunately, this substance is unstable at elevated tempera- dants. Natural tocotrienols exist in four different isomers, i. e., a-, b-,
tures. c-, and d-tocotrienol, (10), and Tab. 4. Tocotrienols have also anti-can-
cer effects, especially against skin and breast cancers. The three ali-
phatic unsaturated bonds are responsible for this effect. In addition
to anti-oxidant and anti-cancer efficacy, many studies have demon-
(5) strated that tocotrienols have amazing beneficial health effects,
e. g., lowering of blood cholesterol levels, regression of atheroscler-
otic plaques in stroke patients, inhibition of the entry of white
blood cells into arterial walls to become devouring phagocytes,
Type of phospholipids where R1 and R2 are alkyl chains.
thereby preventing early plaque formation, inhibition of blood clot
formation in the bloodstream (anti-thrombotic effect), and protec-
tion of skin from damage by the ultra-violet rays of the sun [24].
(6)

Ubiquinone, (7), is a substance responsible for the production of

the body's own energy. This substance is also known as coenzyme Q
in which Q refers to the quinone chemical group. In each human (10)
cell, food energy is converted into energy in the mitochondria with
the aid of coenzyme Q. Therefore, high concentrations of coenzyme
Q are found in organs having high energy requirements, e. g., the
heart, liver, and lungs.

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Clean 2008, 36 (5 6), 453 465 Palm Oil Boom in Indonesia 461

Table 4. The structure of the four different isomers of tocotrienol with their 5.1.3 Refined, Bleached, and Deodorized Palm and Palm
associated R-groups. Kernel Oils
No Type R1 R2 R3 The major constituents of RBDPO and RBDPKO should be similar to
those of CPO and CPKO, respectively. Since the impurities are
1 a-tocotrienol CH3 CH3 CH3 removed during the refining of CPO and CPKO to RBDPO and
2 b-tocotrienol CH3 H CH3 RBDPKO, the proportion of fatty acids as the main component will
3 c-tocotrienol CH3 CH3 H
4 d-tocotrienol CH3 H H be somewhat enhanced in RBDPO and RBDPKO than their precur-
sors.
Unlike the major constituents, the proportion of minor constitu-
ents may be considerably changed after the refining. Minor compo-
Table 5. Ash and major elemental composition of empty fruit bunch
(EFB), fiber, and shell (dry basis). nents such as b-carotene, ubiquinone, squalene, vitamin A, and vita-
min E are generally sensitive to treatment such as bleaching. b-caro-
Element Contents (%) tene can be thermally degraded to hydrocarbons and removed by
the deodorization step in refining [21]. Hence, neutralization,
EFB Fiber Shell
bleaching, and deodorizing may affect the existence of minor com-
H 6.3 6.0 6.3 ponents in neutralized, bleached, and deodorized oils.
C 48.8 47.2 52.4 Fractionation, on the other hand, modifies the major compo-
S 0.2 0.3 0.2 nents of RBDPO and RBDPKO. The olein fraction contains more low
N 0.2 1.4 0.6 melting point components such as oleic and linoleic acids, while
O 36.7 36.7 37.3 the stearin fraction has more high melting components such as
Ash 7.3 8.4 3.2
stearic, palmitic, myristic, and lauric acids. As an example, RBDPO
olein produced by the Daabon Group, Columbia contains oleic acid
(42.5%), which is ca. 3% higher than the amount in PO, while the
RBDPO stearin produced contains palmitic acid levels that are 12%
5.1.2 Empty Fruit Bunch, Fiber, Shell, Palm Kernel Meal, and higher than the original content in PO [31].
Palm Oil Mill Effluent
EFB, fiber, and shell have similar major elemental composition with
carbon as the most abundant element, see Tab. 5 [14]. As a conse- 5.1.4 Palm Fatty Acid Distillate
quence, these materials are basically suitable for use as good fuel As a by-product of CPO and CPKO refining, PFAD contains a variety
sources. The similarity is also observed in their major chemical com- of different compounds such as free fatty acids (FFA), glycerols, phy-
positions. Holocellulose is the dominant compound with an abun- tosterols, linoleic acid, squalene, and tocopherol. FFA is the main
dance of ca. 80% in EFB [25], 60% in fiber [26], and 75% in shell [27]. component with a proportion of ca. 84%, glycerols (monoacyl,
Lignin is the most common other compound in these three materi- diacyl, and triacylglycerols) compose ca. 13% [32], and phytosterols
als. According to Koba and Ishizaki [26], fiber also contains lipids (0.6%) [33]. Monoacyl glycerols are substances where one H on OH
(1.9%), proteins (3.6%), and other compounds (0.8%). group of the glycerol is replaced by a fatty acid radical. Similarly,
PKM is useful as a source of protein in compounding animal feed diacyl and triacylglicerols are substances with two and three H on
and has favorable calcium to phosphorus ratio. PKM typically con- OH groups of glycerol that are replaced by fatty acid radicals. The
tains carbohydrates (48.0%), crude protein (9.70%), fiber (13.0%), oil phytosterols contained in PFAD was mainly in the form of b-sitos-
(5.0%), and ash (4.0%). Many essential amino acids in the concentra- terol (58%), (11), and the remainder are campesterol (26%), (12), and
tion range of 0.27 to 2.20% can also be found, see Tab. 6 [28]. stigmasterol (16%), (13) [33].
POME is composed of water (96%) with a typical chemical oxygen Several studies have demonstrated that the consumption of phy-
demand (COD) of more than 40,000 ppm and total solids level of 4% tosterols reduced the cholesterol absorption and lowered total
[29]. The solid has a high nutrient content, and may be used directly serum and LDL cholesterol levels in animals and humans [34, 35].
as fertilizer [30]. The solid in PKM, i. e., palm oil sludge, the material Phytosterols present themselves as compounds having anti-cancer
that remains after decanting the POME, also contains many kinds of and cholesterol-lowering properties, and thus, they are finding
essential amino acids. The content of essential amino acids in palm wide applications in nutraceuticals and functional foods. The use of
oil sludge is typically smaller than that in PKM, see Tab. 6. phytosterols, its hydrogenated forms (phytostanols), and their

Table 6. Composition of essential amino acids in palm kernel meal (PKM) and palm oil sludge (POS).

Amino acid Content (%) Amino acid Content (%)

PKM POS PKM POS

Arginine 2.20 0.19 Methionine & cystine 1.98 0.28

Histidine 0.27 0.14 Phenylalanine & tyrosine 1.28 0.77
Isoleucine 0.63 0.35 Threonine 0.54 0.34
Leucine 1.05 0.60 Tryptophan 0.17 0.12
Lysine 0.56 0.21 Valine 0.90 0.36

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462 S. J. Santosa
esters in functional food formulations as a cholesterol lowering
agent has now been well-accepted by consumers.
(11)
(12)
(13)
5.2 Product Diversification
Expanding very rapidly in size and number, the PO industry repre-
sents another opportunity for improved utilization of its by-prod-
ucts and wastes. In 2007, Indonesia had ca. 6.65 million ha of total
oil palm plantations with 4.39 million ha of it being mature oil
palm plantation, see Fig. 2. The plantations in 2007 produced 70.8
million tons of FFB and ca. 64 million tons of biomass in the form of
trunk (6.1 million tons) and frond (57.9 million tons). From 70.8 mil-
lion tons of FFB, 17 million tons of PO and 1.9 million tons of PKO
were obtained as the main products and 16.3, 8.5, 5.1, 2.3, and 47.5
million tons of EFB, fiber, shell, PKM, and POME, respectively, were
generated as the by-products and wastes Fig. 9.
5.2.1 Energy Sources
The biomass generated at the PO mills such as EFB, fiber and kernel
shell can be used to produce energy. A mixture of fiber and shell is
the main solid fuel used by PO mills to produce the steam used to
process the FFB. The ratio between fiber and shell in the fuel mix-
ture is determined by the type of boiler used. The most commonly
used boiler type is the low pressure water tube boiler.
While the fiber and shells are currently being used entirely as
fuel for the boilers, another waste, i. e., EFB, is usually burned in
incinerators at the PO mills with no heat recovery or just burned on
the farms. Alternatively, EFB is disposed of on the farms as a source
of organic matter after its decomposition. The burning of EFB pro-
vides beneficial ash as fertilizer to the palm fields but generates air
pollution. It has been proposed that EFB could be used as a supple-
mentary fuel to ensure sufficient supplies of solid fuel for boiler
consumption [14].
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Clean 2008, 36 (5 6), 453 465
Figure 9. The effect of mass distribution on the production of palm and
palm kernel oils.
As happens for EFB, trunk and fronds are also just stored or
burned on the farms to give organic and inorganic nutrients for use
on the fields. These trunks and fronds can actually be used as fuel
for power production, especially in the off season when fiber, shell,
and EFB are not available.
POME may be utilized to produce gas energy. It is technologically
possible to harvest biogas from anaerobic digestion of effluent
ponds of POME. It is estimated that ca. 20,000 m3 of biogas could be
obtained per day from a 60 ton FFB mill operating for 20 h.
5.2.2 Animal Feed
The palm industry produces PKM as a by-product, which is a valua-
ble source for animal feed. According to Sundu et al. [36], PKM has
no anti-nutritional properties, and thus, its inclusion is safe up to
levels of at least 40% in the diet. The addition of PKM in the chicken
diet reduces the feed digestibility due to he high dietary fiber of
PKM but increases the feed intake. Mannan is the main component
of palm kernel meal non-starch polysaccharide (NSP). Both mannose
and manno-oligosaccharides have been reported to act as prebiotics.
The inclusion of PKM in the diet improves the immune system of
birds, reduces pathogenic bacteria and increases the population of
non-pathogenic bacteria in the intestine. PKM and PFAD can be used
in animal diets with some beneficial effects. Wing-Keong et al. [37]
claimed that PFAD in catfish diets could offer protection against
lipid peroxidation in muscles that would translate to longer shelf-
life for seafood products.
It is possible that fibrous by-products such as EFB and fiber could
be used as a feedstuff for ruminant animals. Ruminant animals
such as dairy and beef cattle require two types of feeds, namely
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Clean 2008, 36 (5 6), 453 465
roughage (high fiber but low protein) and concentrates (high pro-
tein and low fiber). Both types of feeds are in high demand espe-
cially as the availability of grazing land is now becoming extremely
limited.
The condensate from POME is another possible source of animal
feed. The solid concentrate of POME is rich in essential amino acids
and inorganic nutrients such as sodium, potassium, calcium, mag-
nesium, manganese, and iron [29]. However, the moisture content
of this material is likely to be too high to render it an economical
source of feed.
5.2.3 Chemicals
Oil palm biomass may be a potential feedstock raw material for
chemical industries. The cellulose component can be hydrolyzed to
yield glucose from which ethanol, citric acid, and butanal can be
obtained through chemical transformation. Hemicelluloses, also
present in the biomass can yield pentoses especially xylose, which
upon hydrolysis, can be converted to xytitol, furfural, furan, resins
and furfuryl alcohol. The lignin fraction of oil palm biomass is a
potential source of phenolic resins.
Small molecule fatty acids and pure cellulose were successfully
recovered from oil palm shell by using a new method combining a
hot water treatment and a two-stage liquid phase oxidation [38]. As
described previously, PFAD contains various valuable different com-
pounds such as FFA, glycerols, phytosterols, linoleic acid, squalene,
and tocopherol. The recovery of these compounds from PFAD is big
concern and is the subject of intensive research. Condensates from
the PFAD have also been examined as substrates for fermentation
processes to produce ethanol, alcohols, monosodium glutamate
(MSG), vitamins, and other possible products.
5.2.4 Paper Pulp
It appears that paper pulp may be potentially one of the most impor-
tant uses of EFB in the future. Some preliminary research has shown
that the paper pulp quality obtained from EFB is favorable. How-
ever, the technology and economics of this particular application
are not yet clear. A combined research group from Japan, Malaysia,
and Indonesia has successfully obtained high quality pulp from EFB
using both acetosolv- and ethanosolv-processes [38].
More advance research has also been conducted for frond. Fiber
strands from the frond of oil palm were examined relative to their
physical and chemical characteristics and their response to chemi-
cal pulping such as sulfite, soda-sulfite and soda processes. Morpho-
logically, the frond fibers are comparable to those of hardwood.
They contain a high content of holocellulose but are low in lignin.
Chemical pulps of 45 to 50% yield produced either by soda-sulfite or
soda process exhibit acceptable papermaking properties compara-
ble to those of hardwood kraft pulps. The study showed that frond
pulp might be used as a reinforcement component in newsprint
production by using softwood thermomechanical fibers [39].
5.2.5 Advanced Materials
The production of a polyhydroxyalkanoate (PHA) bio-degradable
polymer through a freeze concentration pretreatment of POME and
subsequent cultivation using bacteria such as Rhodobacter has been
conducted [38]. Miura et al. [38] also pointed out that a molecular
sieving carbon could be obtained from kernel shell after impregna-
tion with ZnCl2 and subsequent pyrolysis. Various composites with
excellent physical and chemical properties have also been afforded
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Palm Oil Boom in Indonesia 463
by blending EFB with many types of materials such as polypropy-
lene [40].
5.2.6 Medicine and Food Ingredients
Oil palm trunk fiber has shown potential as a functional food ingre-
dient and may help manage and lower the risk of diabetes, colon
cancer, heart disease and obesity. Another finding stated that oil
palm fiber extracted from the trunk has been shown to be an excel-
lent antioxidant and is thought to promote glucose metabolism
and manage healthy cholesterol levels in sufferers of diabetes [41].
5.2.7 Biofuels
PO is a good raw material for liquid fuel. The biggest potential is in
respect to the conversion of PO into methyl esters (biodiesel). The
process of conversion of PO into biodiesel involves transesterifica-
tion of the triglyceride to fatty acid alkyl esters, see reaction (14).
Transesterification involves taking a triglyceride molecule or a com-
plex fatty acid, neutralizing the free fatty acids, creating fatty acid
alkyl esters, and removing the glycerol by-product. Many types of
alcohol such as methanol and ethanol can be used in creating the
fatty acid alkyl esters. If methanol is used, the resulting biodiesel is
fatty acid methyl ester which has suitable viscosity, boiling point
and a high cetane number for use as a fuel.
(14)
Due to the increase of fossil oil price and the depletion of its
reserves, biodiesel has shown potential as a substitute for fossil fuel.
It is more efficient, renewable, and environmentally cleaner (clean
burning and does not produce net CO2 emission). It has been hailed
as an essential part of the overall fight against global warming. It
can replace fossil fuels in transportation and the plants from which
the biodiesel is produced absorb CO2 as they grow.
The Indonesian government is preparing plans to make Indonesia
a major player in the global biofuel industry. For years, the govern-
ment has backed research into biofuel that was initially pioneered
by the Center for Oil and Gas Technology (Lemigas) and the state-
owned petroleum industry, Pertamina, in 1996 [42]. Similar
research is now extending to many research institutes, universities,
and the state-run Agency for Assessment and Application of Tech-
nology (BPPT).
After becoming the world's biggest PO producer in 2005, Indone-
sia took further steps in 2006 to become the world's largest pro-
ducer of biodiesel. As a start, in January 2006, the President of Indo-
nesia issued Presidential Instruction No. 1/2006 for the Production
and Use of Biofuel as Alternative Fuel, giving instruction to various
ministries, including the Ministry of Energy and Mineral Resources
and the Ministry of Agriculture, to speed up the production and use
of biofuel as alternative fuel [43]. Since then, different national and
private banks and credit institutes have financed the opening of
new oil palm and jatropha plantations. The government has also
been putting greater effort into attracting foreign investors. On Jan-
uary 9, 2007, a memorandum of understanding (MoUs) was signed
by a total 59 energy firms and institutions for their commitment to
invest US$ 12.4 billion in biofuel in Indonesia. The major investors
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464 S. J. Santosa
Table 7. Investors proposing the large-scale production of biodiesel in Indonesia by 2007.
No Investor
Location
1 Wilmar Group Sumatera, Kalimantan
2 Bakrie, Indofood Asianagro Sumiasih Sumatera, Java
3 Sweden Bioenergy East Nusa Tenggara
4 Multing Group Merauke (Papua)
5 BP Indonesia East Nusa Tenggara, Papua, Kalimantan
6 Aprobi Group Kalimantan
7 PT. Pupuk Kaltim Kalimantan
were Hong Kong Energy, CNOOC, and Genting Energy. Hong Kong
Energy and CNOOC committed to investing 5.5 billon US$, while
Genting Energy made a commitment of 3 billion US$ [44].
Indonesia has already possesses some smaller biodiesel refineries
where the capacity of each refinery is smaller than 70 million L/
year. The total production capacity in 2006 was 82.5 million L. The
total production in the next five years (2007 to 2011) will be
increased to reach 2,000 million L [45].
Although the effort to become the largest biodiesel producer in
the world has been enthusiastically programmed, it has not been
accompanied by strategic plan to utilize the main by-product, i. e.,
glycerol. The portion of glycerol co-produced during the production
of biodiesel is typically 10%. With the total production of biodiesel
projected to reach 2,000 million L in the next five years, this means
that there will be ca. 200 million L of glycerol produced. The most
common utilization of glycerol in Indonesia to date is in the oleo-
chemical industry as raw material for soap. Unfortunately, due to
the high investment costs coupled with the low awareness of envi-
ronmental care for the common Indonesian, the oleochemical
industry in Indonesia has expanded very slowly. The total produc-
tion of all oleochemical industries only increased from 712,000
tons in 2001 [3] to 950,000 tons in 2007 [46]. Instead of involving
industrial scale use, a research collaboration for the utilization of
glycerol has been initiated between BPPT and the Fraunhofer Insti-
tute, Germany, for three years from 2007 [47].
At least fifteen companies are planning new biodiesel refineries
and the Indonesian government is also intending to create eight
additional small refineries. Among them, the most important com-
panies are Wilmar Group, Bakrie Indofood Asianagro Sumiasih,
Sweden Bioenergy, Multing Group, BP Indonesia, Aprobi Group,
and PT. Pupuk Kaltim. The planting concessions and planned pro-
duction capacities of the companies are summarized in Tab. 7. The
first two refineries built by the Wilmar and Bakrie Groups are
expected to start production in 2008/2009 [45].
Domestic biodiesel retail sales in Indonesia are now estimated at
one ton per day. Retailers are allowed to blend up to 10% biodiesel
to their mixes. The state-owned oil company, Pertamina sells 2.5%
of biodiesel-type in 210 fuel stations and 2.5% of bio-premium type
in one fuel station in Jakarta. The total biodiesel and biopremium
sold by Pertamina in 2006 was 215,730 and 1,700 million L, respec-
tively [45].
6 Summary
Oil palm is a tropical plant which has become extremely important
in today's life. It is the world's leading raw material supply of edible
oils and fats. Along with CPKO, CPO is the main upstream product
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Clean 2008, 36 (5 6), 453 465
Plantation Prod. capacity
(106 L/year)
Area (105 ha)
180 1000
- 600
100 350
290
100
100
20
obtained from oil palm. Extraction of these oils from the palm fruit
also yields the biomass by-products of EFB, fiber, shell, PKM, and
wastes of POME as well as trunk and frond biomass generated in oil
palm plantation. The refining of CPO and CPKO and subsequent
fractionation produces RBDP olein, RBDPK olein, RBDP stearin, and
RBDPK stearin, and PFAD by-product.
Indonesia is now the largest PO producer in the world. With a pro-
duction of 15.0 million tons, Indonesia replaced Malaysia as the
world's biggest PO producer in 2005. Production reached 17.0 mil-
lion tons in 2007, while the production of Malaysia increased from
14.8 million tons in 2005 to 15.4 million tons in 2007. This 17.0 mil-
lion tons of PO was obtained from 6.65 million ha of total oil palm
plantation where 4.39 million ha of it was mature oil palm planta-
tion. The sharp increase of PO production in Indonesia began just
after the Asian financial crisis in 1998. The production in 2007 was
ca. three times higher compared to 1998. More than 70% of the PO
produced in 2007 was exported, while 87% of the domestic con-
sumption was for food.
The products of oil palm are multifunctional materials with their
uses varying from cooking oil to soap, from lubricants to raw mate-
rial sources for the oleochemical industry, etc. The biomass by-prod-
ucts, i. e., fiber, shell, EFB, trunk, and frond, are traditionally used as
a fuel for boilers of palm oil mills or just stored and/or burned on
farms. These biomass by-products, along with PKM, PFAD, and
POME, are now becoming the subject of intensive research for their
valuable utilization. Various research findings show that they can
potentially be diversified into sources of energy, animal feed, chem-
icals, paper pulp, advanced materials, medicine, and food ingre-
dients. Efforts to utilize and diversify the function of palm oil by-
products and wastes are urgently required in Indonesia. Approxi-
mately 64 million tons of biomass in the form of trunk (6.1 million
tons) and frond (57.9 million tons) as well as 16.3, 8.5, 5.1, 2.3, and
47.5 million tons of EFB, fiber, shell, PKM, and POME, respectively,
were generated by the palm oil mills in Indonesia in 2007.
More recently PO has played an important role in the develop-
ment of alternative fuel sources. Studies on the conversion of PO to
biodiesel and its blending to fossil diesel were initiated by Lemigas
and Pertamina in 1996. After becoming the world's largest PO pro-
ducer in 2005, Indonesia made further steps in 2006 to become the
world's largest producer of biodiesel. As a start, in January 2006 the
President of Indonesia issued Presidential Instruction No. 1/2006 for
the Production and Use of Biofuel as Alternative Fuel. The instruc-
tion ordered various ministries including the Ministry of Energy
and Mineral Resources and the Ministry of Agriculture, to speed up
the production and use of biofuel as an alternative fuel.
Currently, Indonesia has only small biodiesel refineries and the
total production capacity in 2006 was 82.5 million L. At least fifteen
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Clean 2008, 36 (5 6), 453 465
companies are planning to establish new larger biodiesel refineries.
Two of them with a total capacity of about 1,600 million L/year are
planning to start production in 2008/2009.
Domestic biodiesel retailers in Indonesia are allowed to blend up
to 10% biodiesel to their mixes for transportation fuel. In fact, the
state-owned oil industry, Pertamina, only sells 2.5% biodiesel type.
The total amount of 2.5% biodiesel type sold by the Pertamina from
its 210 fuel stations in Jakarta in 2006 was 215,730 million L.
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