Palm oil mills

Crude Palm Oil (CPO) is produced by the mechanical processing of fresh Full Fruit Bunches (FFB). Three main by-products are produced: Empty Fruit Bunches (EFB), fibers (from the fruit), and Palm Oil Mill Effluent (POME). EFB, besides being rich in plant nutrients, also improve physical and chemical soil properties and are therefore used as fertilizer in our estates.

A well managed mill is virtually self sufficient in its energy requirements. The fibers, and sometimes part of the EFB, are used as fuel for the boilers, which provide sufficient steam for power generation. The power produced by the boilers is usually sufficient to cover the operational requirements of the mill, and the needs of the houses of the workers.

POME is a by-product from a process in which no chemicals are added. It contains only water from the extraction process, with water-soluble components of the palm fruits and some suspended solids and fiber. POME, however, is acidic and has a very high Biological Oxygen Demand (BOD).Therefore it cannot be directly discharged into a watercourse. Strict regulations in Indonesian and in PNG indicate the acceptable standards and use of the POME and are followed by our operations. Analyses at fixed sampling points are carried out routinely. The raw POME is generally treated using a ponding system, in which it is typically retained for 90 days. At the end of the ponding period, it can be used for land application in parts of our estates as an organic fertilizer.

The "ponding" of the POME, although an industry standard, actually releases methane gas, a known greenhouse gas. In 2008, to mitigate these emissions, Sipef has installed methane collection and flaring systems in the two North Sumatra palm oil mills, and has applied for certification into the Clean Development Mechanism Board (CDM) under the Kyoto Protocol. Both projects have been approved by the Executive Board of the United Nations Framework Convention on Climate Change (UNFCCC) in November 2009, and are receiving credits for Carbon Emission Reductions (CER).

Our 2 mills in PT Agro Muko (PT AM) have been modified to follow the same route. The Hargy and Navo mill in PNG will be considered for a methane capture project using a more advanced system whereby the gasses will be reintroduced in the mill for the production of electricity. Both in Indonesia and PNG, Sipef is an oil palm industry leader for methane capture. Leading by example, we hope to raise awareness on global warming and ways to reduce GHG emissions.