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Palm Oil - Challenges and Opportunities in Sustainable DevelopmentAbdul Kadir M. Jamal (Class of 2009)Passport Number: V 283947E-mail Address: munsheed_mania@yahoo.comContact Number: +62 856 4229 6733 Rina Sari Utami(Class of 2009)Passport Number: A 1447154E-mail Address: rina_utami@rocketmail.comContact Number: +62 856 4234 3082Chemical Engineering Department, Faculty of Engineering Sebelas Maret University of Surakarta, IndonesiaUniversiti Teknologi Malaysia 16-18 December 2011

11Table of ContentDefinition3Challenges4The Sustainable Industry5Economic Sustainability6Social Sustainability7Environment Sustainability8Conclusion and Future Development13Bibliography2

Sustainable Development Development that meets the needs of the present without compromising the ability of future generations to meet their own needs(International Institute for Sustainable Development)ECONOMY ENVIRONMENTSOCIALSUSTAINABLE DEVELOPMENT33

ChallengesChallen esENVIRONMENTSeverely damaged & in need of drastic action

SOCIALLack of self awareness & self responsibility from individual in terms of sustainability

ECONOMIC & INDUSTRY- Dependent on fossil fuelUnwilling to spend money on research and environmental action which deemed non-profitable

GOVERNMENT BODY- Tendency to ignore sustainability & focus more on instant result Regulation & legislation are sometimes taken based on political consideration and prefer on short time benefits, not the world as system

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Palm Oil Industry, the Sustainable Industry

EconomicallySociallyEnvironmentally- High Demand- High Product Value- Cool Prospect- Rural Economy Vehicle- Job Provider- High IncomeSoil Friendly-Self Sufficient EnergyZero-Waste ProductGHG Friendly55

Economic SustainabilityHigh consumption lead to high demand

Palm Oil is now account 34% of world vegetable oil consumptionBiggest agriculture export commodity in Indonesia ($14.5 billion in 2008). In 2007, Malaysian export value around US $19.6 billionBright prospect for the future

Source : World Growth, 201166

A good means to spread prosperity via transmigration.Felda, the largest producer of palm oil in Malaysia resettled 112,635 families from 1960-2006 (Ahmad Tarmizi, 2009)The second biggest agriculture product in Indonesia (41% of the land owned by small holder )More than 2 million people working on this sector by 2006 in Indonesia and can grow up to 6 million (Goenadi, 2008)Seven times higher of average income than farmers of other crops (Hardter et al, 1997)YearEmployment in AglicultureArea Planted (ha)Palm Oil Production (tons)Poverty Indicator199544 %2,025,0004,480,00084.6 %200545 %5,454,00011,682,00053.8 %Source : World Growth, 2009Social Sustainability77

Environment Sustainability1. Soil Friendly88

140-200 kg CPO1 ton FFBEnergy needed for production :20-25 kWh & 0.73 ton steamOil palm Industry600-700 kg POME (liquid waste) 276 MJ Biogas190 kg fibers & kernel230 kg EFB120 kWh Potential Generation

Self Sufficient EnergyMass and Energy Balance:167 kg200 kg CPO 100 kWh free energyIndonesias CPO Production (2009) = 18 million ton 9 GW potential generation

9.4 kg N2 as Fertilizer

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Less energy useEconomicallyBeneficial and SustainableLess land use to generates more oil Source : World Growth, 2009

LOW COST1 ton of palm oil needs 19.2 GJ, generates 182.1 GJ1010

AnimalNumberAsia elephant2800Rainforest Birds112Sumatran Orangutans12000Sumatran rhino50Sumatran tigers250Source : Ellie Brown, Ph.D., Center for Science in the Public Interest, 2005

Crude Palm Oil = Cruel Palm Oil?1111

1995200020052008IndonesiaArea plantedx1000 ha2.0254.1585.4547.008Yieldton/ha2,211,682,172,58Oil productionx1000 ton4.4807.00111.86218.090MalaysiaArea plantedx1000 ha2.5403.3774.0514.488Yieldton/ha3,073,213,693,95Oil productionx1000 ton7.81110.84214.96217.734Table : Palm Oil Industry Performance in Indonesia and MalaysiaSource : World Growth, 2009They say: Palm oil industry is the biggest contributor of deforestation because of the area expansion which results in animal extincion, high GHG emission and waste management problemWe say: Palm oil plantation is allowed only in land zoned for agriculture. The animals habitat in the protected forest will not be damaged. The growth of productivity is not merely because of area expansion but also fertilizer application rate, cultivation method, and yield per ha.For the basis of 1 ton oil produced, palm oil has the lowest carbon footprint among other cropsPalm oil waste can be processed to make other product

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Palm Oil Industry is Environment-friendly and SustainableImproving financial, social, and economic benefitsImplying a balanced approach to reduce environment impact over short and long termFinding market and technology for the production of high value products from palm oil and its derivativesCommitting to maintain the high standard of the industry to create Zero-waste Production Process by full use of its by-product as alternative energy source or other utilizationsHOW ?1313

BibliographyAhmad Tarmizi, A. 2008. Felda- A success story. Global Oils & Fats Business Magazine. Vol.5, Issue 1: 7-11 Basiron, Y. 2004, The Oil Palm and Its Sustainability, Journal of Oil Palm Research Vol. 16 No. 1, June 2004, p. 1-10Basiron, Y. 2008, Malaysias Oil Palm Hallmark of Sustainable Development, Global Oils & Fats Business Magazine, Vol. 5, Issue No. 4Brown, Ph. D., et all., 2005, Cruel Oil : How Palm Oil Harms Health, Rainforest & Wildlife, Center for Science in the Public Interest, WashingtonHardter, R., Chow, W. Y., dan Hock, O. S., 1997, Intensive Plantation Cropping, A Source Of Sustainable Food and Energy Production in The Tropical Rain Forest Areas In Southeast Asia, Forest Ecology and Management, Vol. 91, No. 1, page 93-102Goenadi , 2008, Perspective on Indonesian Palm Oil Production, Paper Presented in Rapat 2008 Musim Semi International Food & Agricultural Trade Policy Council, 12 May 2008, Bogor, IndonesiaWorld Growth, September 2009, Palm Oil-The Sustainable Oil, World Growth Palm Oil Green Development Campaign, ArlingtonWorld Growth, Februari 2011, Manfaat Minyak Sawit Bagi Perekonomian Indonesia, World Growth Palm Oil Green Development Campaign, ArlingtonTeoh, Cheng Hai, Key Sustainability Issues in the Palm Oil Sector, World Bank Group14