Optimal synthesis of oil palm eco-industrial town

Abstract

The oil palm industry plays significant roles in developing Malaysia’s economy, society and environment. Current oil palm industry practices produce millions of tons of oil palm biomass as bio-waste at plantations and mills. Untreated biomass waste leads to environmental problems such as waterways contamination and carbon dioxide emission (CO2). Biomass waste produced reached 150 million tons in 2014, which comprised of decanter cake, boiler ash, empty fruit bunch, palm oil mill effluent, oil palm frond, and oil palm trunk. An oil palm eco-industrial town (EIT) was proposed as a new oil palm industry model to balance both economic and environmental needs by integrating oil palm based industries and community. The main objective of this study was to synthesise oil palm based industries for oil palm EIT by using structural optimisation. In order to achieve the goal, four sub-objectives were identified: (1) to develop a model that can determine the products and biomass-pathways that will give maximum profit to the oil palm EIT, (2) to develop a model that can decide the profitable products and biomass-pathway that will give maximum profit to the oil palm EIT while minimising impacts of CO2 emissions to the environment, (3) to develop a model that is able to do spatial planning of centralised biomass facility, as well as location for spatial development of oil palm EIT, and (4) to develop a multi-period model that can decide the most profitable industries in oil palm EIT for the next 10 year period, taking into consideration the biomass yield based on age of the palm oil tree. A case study of Johor was applied in this research. The developed models were optimised by using General Algebraic Modelling System (GAMS) software as an optimisation tool. The developed models verified that the community and oil palm based industries can be integrated via oil palm EIT concept. The developed model named as the Economic Optimisation Model (EOM) found that the maximum profit that can be achieved by oil palm EIT was USD 67.27 million. The Green Economic Optimisation Model (GEOM) verified that the oil palm EIT can meet both economic and environmental needs with 0.96 degree of satisfaction, optimal profit of USD 65.50 million and total CO2 emission of 464,210 kg-CO2-eq. The oil palm EIT can achieve maximum profits of USD 163.37 million via decentralised system in cases where there are multi-site oil palm EITs, as demonstrated by the Multi-site Optimisation Model (MSOM). Multi-period Optimisation Model (MPOM) demonstrated the most profitable industrial elements to be developed for year 2016 to 2025. It was found that the maximum profit can be achieved by oil palm EIT for the 10 year period was USD 903.07 million. The oil palm EIT can be promoted as a green economic development model powered by oil palm biomass.