Palm EFB to Bioethanol Potential in Indonesian Oil Palm Operations
Lydia Pettit
Space-Time Tunnel LLC
Author’s Note
This essay was written with support from James Loftis, a geospatial data analyst at Space-Time Tunnel. It was produced with financial support from Space-Time Tunnel, a digital agriculture tunnel under the parent company Julong Group. Julong Group is an Oil Palm company with plants in Indonesia and subsidiaries in China and the US.
Correspondence concerning this essay should be addressed to Lydia Pettit. Email: lydiapettit@space-time-tunnel.com.
How do you fuel your operations? As emissions from the industrial sector cause increasing harm to our environment, we must carefully consider this question. Common fuel sources like coal, natural gas, oil, and petroleum release greenhouse gasses that damage our ozone layer, contributing to the climate crisis. These traditional fuel sources are also nonrenewable, so they can only get us so far. In order to build a future that can last, we need to embrace alternate fuel sources that address these issues. Space-Time Tunnel believes that biomass fuel has a strong potential to fill this niche. As defined by the U.S. Energy Information Administration, “biomass is renewable organic material that comes from plants and animals” (US EIA, 2026). This includes a wide range of resources, from animal waste, to agriculture residue, to trash and sewage. Many biofuels come from refuse that would otherwise be dumped in landfills, which means we have an added opportunity for waste reduction.
Space-Time Tunnel’s parent company owns oil palm plantations across Indonesia that produce a large sum of biomass every month. This comes in the form of palm empty fruit bunches (EFB), which have the potential to be converted into a renewable fuel source such as bioethanol. Once the residues are converted, our ethanol would have double the kilowatt hours per ton compared to dry EFB. Besides the greater energy content of ethanol, this product would be more marketable in our production country of Indonesia, due to the government mandates for this fuel type. Indonesia has the largest subsidized market for biofuel in the world, with an E5 gasoline mandate that began this July, and E10 targeted for 2027 to 2028. In order to reach the E5 target, domestic fuel-grade production needs to be roughly 1 million kL, and it is currently at just 60,000 kL. This leaves a gap in the market for us to fill. This gap is already significant, and when the E10 target is implemented in 2027 (and with E20 on an accelerated path to implementation in 2028/29) it will continue to grow. Almost all fuel ethanol in Indonesia today is produced via molasses fermentation derived from sugarcane processing. Since sugar processing is already a lucrative industry in Indonesia, reliance on sugar byproducts for ethanol production tightens supply and raises opportunity costs as ethanol producers compete with the food industry. EFB, on the other hand, is abundant in Indonesia and its use instead of sugarcane products would reduce the input materials costs to effectively zero and reduce Indonesia’s reliance on sugarcane based feedstocks.
Once we’ve established our production process for bioethanol, the possibility of upgrading that fuel to jet fuel opens up. This is a higher-value option with markets in Indonesia, as well as Singapore, Japan, and the EU, where they will pay a premium for residue-based fuel. However, the alcohol-to-jet (ATJ) process is expensive, taking about 1.7 L of ethanol per litre of jet. Our estimate would put the minimum selling price at US $2.60/L against US$0.80/L for fossil jet fuel. This means we would need either a price-gap subsidy or an export buyer to work, so we suggest building the ethanol plant first, and adding the ATJ unit once the SAF mandate reaches 3% to 5% or a buyer signs. This would allow the plant to earn revenue on its own in the interim.
The proposed process of converting palm EFB to bioethanol creates a renewable, carbon-reduced power source, helping to address the sustainable power issue in the industrial sector. Implementing this residue stream would turn Palm EFB that would otherwise be wasted into a productive energy source, and reduce Indonesian energy reliance on imports. This process will make our plantations more productive and efficient; providing a reduced emissions fuel source, and improving the economic efficiency of our operations.
References
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