Indonesia plans bio-methane output derived from palm oil to begin 2025
25/09/2023 (S&P Global) Indonesia's state-owned energy company PT Pertamina natural gas subsidy PT Perusahaan Gas Negara TBK(PGN) with three Japanese companies JGC Holdings Corp, Osaka Gas and Inpex Corp have begun a study to commercialize biomethane production from palm oil mill effluent (POME) in Indonesia, according to joint release on September 25.
The biomethane production consortium will use PGN's natural gas pipeline network to distribute biomethane made from POME, which comes from oil palm plantations in South Sumatra in 2025.
The project aims to recover current methane gas emissions from POME, process it into biomethane and supply to customers using existing natural gas pipeline infrastructure.
Also, the biofuels led decarbonization effort by the consortium is expected to scale up the biomethane operations to supplying bio-LNG from biomethane as a bunker fuel. This in turn will also be considered for export as bio-LNG primarily to Japan and other markets as well.
The project was introduced at the Asia Zero Emission Community (AZEC) Ministerial Meeting in March 2023 as an initiative that contributes to carbon neutrality in Asia.
Feedstock footprint
Palm oil mill effluent or POME is a byproduct of processing of oil palm fruits at refineries. For every one ton of crude palm oil produced, 2.5 -3 cubic meters of POME is produced.
Indonesia produced 46.72 million mt of crude palm oil in 2022 according to trade body Indonesian Palm Oil Association also known as Gapki.
Of this, Indonesia used about 8.84 million mt to produce biodiesel for use in road fuels domestically, Gapki said in its annual report earlier this year.
Use of palm oil for making biodiesel is expected to rise in 2023, after Jakarta raised the national ratio of biodiesel to gasoil mix to 35% from 30% in February.
Indonesia's has an emission reduction target of up to 377 million mt of CO2 by 2035.
Platts, a part of S&P Global Commodity Insights, assessed crude palm oil FOB Indonesia at $822/mt on September 25, down 8% from the start of the month.