preliminary feasibility study in the philippines study report · 2012. 12. 2. · 2.1.5...

Study Report

Preliminary Feasibility Study on the Production of Bio-Cokes and Programmatic CDM Project

in the Philippines, March 2010, ECFA

Preliminary Feasibility Study

on

The Production of Bio-Cokes

and

Programmatic CDM Project

in the Philippines

Study Report

March 2010

Engineering and Consulting Firms Association, Japan

NTT GP-ECO communication, Inc.

This work was subsidized by JKA

through its Promotion funds from KEIRIN RACE.

http://ringring-keirin.jp/

Study Report Table of Contents



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TABLE OF CONTENTS

Executive Summary

Chapter 1 : Introduction........................................................................................................................... 1

1.1 Background and Objectives ........................................................................................................... 1

1.2 Scope of Works.............................................................................................................................. 1

1.3 Study Area ..................................................................................................................................... 2

1.4 Study Schedule .............................................................................................................................. 2

1.5 Study Team Member...................................................................................................................... 2

Chapter 2 : Introduction to the Biomass-based Cokes and Its Market .................................................... 4

2.1 Coconut as “The Tree of Life”....................................................................................................... 4

2.1.1 Description of Coconut Tree................................................................................................... 5

2.1.2 Industrial Use of the Coconut ................................................................................................. 5

2.1.3 Philippine Coconut Authority (PCA)...................................................................................... 8

2.1.4 Jurisdiction and Organization of PCA .................................................................................... 9

2.1.5 Significance of Coconut Industry ......................................................................................... 11

2.1.6 Philippines Laws and Regulations Relating to Coconut Industry ........................................ 13

2.2 Introduction to the Biomass-based Cokes made by the Coconut Wastes .................................... 13

2.3 Surrounding Environment for the Introduction of Biomass-based Cokes................................... 17

2.3.1 The trend of coconut production........................................................................................... 17

2.3.2 The amount of the Productivity of Coconuts-originated coal............................................... 20

2.4 Potential Market for the Biomass-based Cokes in the Philippines .............................................. 21

2.4.1 Needs for the Biomass-based Cokes..................................................................................... 21

2.4.2 Supply amount in northern Mindanao and Calabarzon ........................................................ 23

2.5 The Carbonized Coconut Husk as Source of Alternative Energy ................................................ 24

2.5.1 Heat source usage in the oil mill factory .............................................................................. 24

2.5.2 Fuel gas usage for small scale power generator.................................................................... 26

2.5.3 Heat source for drying Copra................................................................................................ 27

Chapter 3 : Proposed Biomass-based Cokes Production Project........................................................... 28

3.1 Technical Profile of Biomass-based Cokes Production Systems................................................. 28

3.1.1 Preparation for the carbonization.......................................................................................... 28

3.1.2 Carbonization process........................................................................................................... 29

3.2 Integration of the Production Systems to the Existing Coconut Oil Mill Systems...................... 32

3.2.1 Oil mill process and heat flow in large scale oil mill factory ............................................... 32

Figure 3-8 shows typical diagram of the processing flow of the Coconut Oil Mill and is a case

that illustrates heat utilization, exhausted gas recovery systems by heat exchanger at large oil mill

in general. ...................................................................................................................................... 32




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3.2.2 Oil mill process and heat flow in small scale oil mill factory............................................... 33

3.2.3 Coconut flow from farmer to the oil mill factory ................................................................. 34

3.2.4 Heating value of the Coconut husk Coal .............................................................................. 35

3.2.5 Preparation of the calculation ............................................................................................... 36

3.2.6 About husk carbonization furnace near by oil mill factory................................................... 38

3.2.7 Price of Cokes and husk ....................................................................................................... 39

3.2.8 Specification of furnace........................................................................................................ 41

3.2.9 Rough idea of the production cost ........................................................................................ 41

3.2.10 Checking of the heat balance system of carbonization for IRR calculation ....................... 42

3.2.11 Investment at selected oil mill ............................................................................................ 44

3.3 Technical and Environmental Issues to be addressed .................................................................. 44

3.4 Material Supply and Logistic Value Chain .................................................................................. 45

3.4.1 Players in the Logistic Chain of Coconut Products .............................................................. 46

3.4.2 Proposed Logistic Value Chain for the Coconut Husk ......................................................... 46

3.5 Proposed Organizational Structure .............................................................................................. 48

3.5.1 Organizational Structure at the institutional level................................................................. 48

3.5.2 Organizational Structure at the Production Level................................................................. 49

Chapter 4 : Applicability as a Validated Programmatic CDM (PoA) Project ........................................ 51

4.1 Definition and Outlines of the PoA Project ................................................................................. 51

4.2 Applicability of the PoA Concept to the Project.......................................................................... 54

Chapter 5 : Financial Viability Analysis on Two Case Studies.............................................................. 60

5.1 General Pre-conditions for Financial Viability Analysis ............................................................. 60

5.1.1 Pre-conditions for the Financial Viability Analysis .............................................................. 60

5.1.2 Capital Cost for the Project................................................................................................... 60

5.1.3 Currency and Foreign Exchange Rates................................................................................. 60

5.1.4 Financing plan for the Project Investment ............................................................................ 61

5.2 For the Investment Proposal at the Northern Coast of Mindanao ............................................... 61

5.2.1 Total required costs for the Project ....................................................................................... 61

5.2.2 Expected Revenues and Required Costs for the Project ....................................................... 62

5.2.3 Results of the Financial Viability Analysis (Analysis of FIRR) ........................................... 62

5.2.4 Results of the Financial Feasibility Analysis ........................................................................ 64

5.3 For the Investment Proposal at the Calabarzon Area................................................................... 65

5.3.1 Total required costs for the Project ....................................................................................... 65

5.3.2 Expected Revenues and Required Costs for the Project ....................................................... 65

5.3.3 Results of the Financial Viability Analysis (Analysis of FIRR) ........................................... 66

5.3.4 Results of the Financial Feasibility Analysis ........................................................................ 67

5.4 Sensitivity Analysis on the Financial Internal Rate of Returns ................................................... 68




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Chapter 6 : Roadmap for the Project Implementation ........................................................................... 70

6.1 General......................................................................................................................................... 70

6.1.1 Construction at the Project Sites........................................................................................... 70

6.1.2 Trial operation....................................................................................................................... 71

6.1.3 Personnel and Training Program for Operators .................................................................... 71

6.2 Proposed Project Implementation Structure ................................................................................ 71

6.3 Proposed Project Implementation Schedule ................................................................................ 72

6.3.1 Project Preparation Study ..................................................................................................... 72

Appendix 1 : Financial Analysis.............................................................................................................. 1

Appendix 2 : T.O.R.................................................................................................................................. 1




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List of Table

Table 1-1 Member of the Study Team .......................................................................................... 3

Table 2-1 Coconut Production in major producing countries ....................................................... 4

Table 2-2 Production of Coconut in the Philippines (1997- 2007) ............................................. 12

Table 2-3 Domestic Use and Exports of Coconut (Copra) ......................................................... 13

Table 2-4 Specification for Bio-Cokes derived from Coconut ................................................... 14

Table 2-5 weight and component rate of husk ............................................................................ 16

Table 3-1 material flow example of Husk and Copra part........................................................ 37

Table 3-2 Specification of furnace.............................................................................................. 41

Table 3-3 Specification of main facilities and capital investment for big scale O/M................. 44

Table 3-4 Specification of main facilities and capital investment for small scale O/M ............. 44

Table 3-5 National Ambient Air Quality Guideline Values ........................................................ 45

Table 5-1 Borrowing condition of the Project Loan ................................................................... 61

Table 5-2 Details of the Capital Cost and WACC....................................................................... 63

Table 5-3 FIRRs on the Base Cases............................................................................................ 64

Table 5-4 FIRRs on the Base Cases............................................................................................ 68




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Lists of Figure

Fig 2-1 Organizational Structure of PCA ................................................................................... 10

Fig 2-2 section of Coconut and possible part to the Cokes......................................................... 15

Fig 2-3 Coir (left) and Husk removing from coconut (right)...................................................... 16

Fig 2-4 Copra production amount and installation utilization .................................................... 18

Fig 2-5 heat usage in oil mill factory.......................................................................................... 24

Fig 2-6 carbonization furnace on the construction in oil mill factory ........................................ 26

Fig 2-7 rice husk gasification and 20kW power generator in Nueva Ecija ................................ 26

Fig 2-8 flat bed type dryer for Copra and Coconut husk, shell as fuel ....................................... 27

Fig 3-1 carbon rate, yield and density at hour rate ..................................................................... 28

Fig 3-2 the 12 segmented husk before carbonization ................................................................. 29

Fig 3-3 garden carbonizing for rice husk in Philippine - small scale batch type -...................... 29

Fig 3-4 middle scale batch type garden carbonization for Eucalyptus in Thai land ................... 30

Fig 3-5 Continuous type carbonization furnace by self heating（left: Philippine, right: Japan）

............................................................................................................................................... 31

Fig 3-6 Large scale continuous type carbonization furnace with self heating............................ 31

Fig 3-7 Continuous type carbonization furnace by self heating ................................................. 32

Fig 3-8 heat flow in oil mill factory............................................................................................ 32

Fig 3-9 oil mill factory(lower) and heat flow(upper).................................................................. 33

Fig 3-10 Flow chart of the proposed coconuts husk derived cokes production and GHG

capturing system .................................................................................................................... 34

Fig 3-11 Coconut husk carbonization process in farmer and oil mill factory............................. 35

Fig 3-12 Carbon material balance............................................................................................... 39

Fig 3-13 heat balance of proposed coconuts husk carbonization system ................................... 43

Fig 3-14 promotion paper for salt fertilizer ................................................................................ 45

Fig 3-15 Proposed Logistic Value Chain for the Project ............................................................ 47

Fig 3-16 Organizational Structure in the institutional level........................................................ 49

Fig 3-17 Organizational Structure at the Production Level ........................................................ 50

Fig 4-1 Outline of the PoA ......................................................................................................... 54

Fig 4-2 EIA process within the project cycle.............................................................................. 56

Fig 4-3 EIA process .................................................................................................................... 57

Fig 4-4 National Approval Transaction ...................................................................................... 58

Fig 4-5 National Approval Transaction fee................................................................................. 58

Fig 4-6 CDM Criteria ................................................................................................................. 59

Fig 4-7 Concept of PoA.............................................................................................................. 55

Fig 6-1 Proposed Project Implementation Structure................................................................... 72

Fig 6-2 Project Preparation Study implementation schedule...................................................... 73

Fig 6-3 Construction Schedule ................................................................................................... 74




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Abbreviation

ADB Asia Development Bank

CER Certified Emission Reduction

CME Coordinating and Managing Entity

CPA CDM Programme activity

DBP Development Bank of Philippines

DENR Department of Environment and Natural Resource

DNA Designated National Authority

EIA Environmental Impact Assessment

F-IRR Financial Internal Rate of Return

GHG Greenhouse Gas

JICA Japan International Cooperation agency

LHV Low Heating Value

NEDA National Economic and Development Authority

O&M Operation & Maintenance

PCA Philippines Coconut Authority

PDCA Plan-Do-Check-Action

PoA Programme of Activity

SPC Special Purpose Company

UNFCCC United Nations Framework Convetion on Climate Change

WACC Weighted Average of Capital Cost

Study Report



EXECUTIVE SUMMARY

Study Report Executive Summary



S-1

Executive Summary

1. Background and Objectives

The Government of the Philippines has recently created Presidential Degree in January

2009, to foster the development of Renewable Energy. The Decree was aimed at improving

National Energy Security and encourages the development and production of renewable

energy from plants as alternative sources for sustainable energy.

Coconut Husk is one of the potential sources of materials and along with this policy, the

Government of the Philippines has been involved with various Research and Development

activities with the Philippine Coconut Authority as the implementing agency for the

development of sustainable energy. . Based on Statistics published by the United Coconut

Associations of the Philippines, the total harvest for coconuts in the country in 2007 is

14.9 Billions pieces. However, the residue of the Coconut has rarely been utilized except for

charcoal made from coco-shells which is commonly used for domestic cooking purposes

only.

The objective of the Preliminary Feasibility Study is to explore the possibility of producing

Cokes from coconut husk through Carbonization Process for use in Iron Smelting and Steel

Casting processes thus replacing minimizing the use of imported Cokes made from fossils

which are sources of pollutants to the environment. The benefits to be derived from

producing biomass based coke from coconut husk would be plentiful. The trash material

could be used to mass produce bio-cokes thereby generating income for sustenance farmers.

The used of bio-cokes would be more environmental friendly than cokes made of fossils

because it is no polluting and therefore would be compliant to the Clean development

mechanism of the Kyoto protocol agreement.

2. Study Area

The entire Philippines are almost provided with coconut plantation, but specific focus was

given to two study Areas, one in the Southern Tagalog Region and the other in the Northern

Coast of Mindanao. Two case studies have been conducted for the selected study Areas,

with Granexport Manufacturing Corporation in Illigan City, Lanao del Norte Province as the

first, and Goldex Oil Mill in Gumaca City, Quezon Province as the second.

3. Market and potential of the Bio-coke Industry from Coconut Husk

Coconut husk are trash materials generated from the production of copra and are readily

available from coconut plantations. About 440,000 tons of coco-husk could be obtained




S-2

from accessible areas adjacent to roadways while some 130,000 tons are located in inner

areas inaccessible by vehicles.

The demand for powdered cokes in steel plant to be injected alternately with coal in the

sinter furnace is 50,000 tons maximum of powdered bio-cokes and 2,000 tons of coal or a

total of about 52,000 tons. This is less than the estimated 15 percent available husk supply

at 130,000 tons.

4. Proposed Biomass-cokes production project

The flowchart hereunder shows the outline of the proposed plant to produce

biomass-based coke from Coconut Husk through Carbonization t for use in Iron Steel

Casting making, alternately with imported Cokes to reduce on GHG..

Copra

Drying

Farmers / PlantationsFarmers / PlantationsFarmers / PlantationsFarmers / Plantations

Shipping

Oil MillsOil MillsOil MillsOil Mills Iron RefineriesIron RefineriesIron RefineriesIron Refineries

Copra

Cooking

CDM(1)(1)(1)(1)

Exhausted

Gas burner

Pelletizer

＊＊＊＊Carbonizer

Drying

Bio-cokes

replacedfr

Collection

Packing

Cutting

Reduction

materials

Packing

CDM(2)(2)(2)(2) ＊Husk

Dilution

Steam boiler

Replace

Fossil fuel

Replace

Coal-cokes

Grinder

Heat

(a) For Treasure Steel Corporation

Some 300,000 tons/year of scrap steel is being process by Treasure Steel in Iligan City and

at a ratio of 25kg of cokes per ton of scrap, this will require 7,500 tons of cokes per annum.




S-3

Assuming a combustion rate of 50% for the electric furnace, Treasure Steel Corporation

would need some 4,000 tons of cokes annually. The processing capacity for copra of

Granexport the largest coconut oil plant in the Philippine is almost in par with the capacity

of Treasure Steel plant estimated at 800t of Copra per day with 16% moisture content.. .

At 50% utilization rate the production capacity is estimated at 400t of Copra/day or about

100t/day of husk at 45% moisture. With 100t/day of Copra at 16% moisture, some

4,380t/day of husk can be carbonized as cokes to cover the requirements of Treasure Steel

Corporation.

Based on the records of Granexport Plant, plant, some 800t of Copra/day is being process

for oil production. With this in consideration, coconut is not only collected from along the

highways but also in the inner part of coconut plantations in remote areas. Based on

information middle men or copra traders with established buying stations are being used to

facilitate the gathering of coconut supplies.

(b) For Steel Asia

Steel Asia is located at the center of CALABARZON in Calaca, Batangas Province.. The

plant is comparatively new with 0.3million tons of steel/day processing capacity. Similar to

Treasure Steel Plant, Steel Asia needs 7,500t of cokes/day considering that the plant have

the same capacity as that of Treasure Steel Plant. As noted above, the Plant is estimated to

need 4,200t/year of powdered coal for fuel or about 11,700t/year of cokes. At mixed

furnace combustion rate of 50%, some 6,000t of cokes/year will be needed.

An oil milling plant is located in the vicinity of Gumaca, Quezon Province where the

study area is located. The capacity of the plant at 100t of copra/day is much smaller than

Granexport.

At 100t of Copra/day processing capacity, the oil mill plant is estimated to be able to

produce some 4,380t of cokes/year. While Steel Asia needs 6,000t of cokes/year which is 1.5

times greater than that of the factory which is about 150t of Copra/day or about 0.21 million

tons of Coconut/year.

The total Coconut production in the area is estimated at 1.2 million tons/year of which

about 0.6 million tons/year could be gathered along the highway which is about 50% of

the total estimated production of 1.2million tons/year. This is the reason why the study area

was selected because of the availability of good road transportation network where 50% of

the plantations are located.

In view of the foregoing considerations, some 150t/day coconut husk could be gathered by

3 to 4 oil plants for the production of 6,000t of cokes/year to meet the demand of Steel Asia.




S-4

Goldex oil mill factory in Gumaca Quezon Province is a medium size plant with 100t of

Copra/day processing capacity. There are also many other oil mill plants of this class in

Batangas Province and it is noted that the utilization rate of most of the plants are

estimated at 50%only.

5. Area of Responsibility

The PoA covers the administration of coconut plantations for the whole Philippines while

CPA covers the administration of coconut plantation for the whole Southern Tagalog Region

(Calabarzon) and Northern Coast of Mindanao with PCA of DA as the Coordinating and

Managing Entity (CME). PCA could at the same time function as the Implementing Agency

of the proposed Project. The use of biomass -cokes made from coconut husk in lieu of

imported fossil cokes for domestic steel plants will have the advantage of not only reducing

CHG but would also generate more income for farmers and employment opportunities and

conserving precious foreign exchange earnings.

6. Proposed Implementing Structure

The Philippine Coconut Authority (PCA) is a public entity solely responsible for the

administration of the Coconut Industry in the Philippines. PCA is proposed to be the

implementing agency for the proposed Bio-cokes Production Project and for the

coordination and management of CDM application in close coordination with the lending

institution.

The Project will be initiated by the private sector particularly by the Coconut and the Iron &

Steel Industries. These players, particularly the Coconut Mills, will be executing essential

roles in realizing the objectives of the Project. The flow chart hereunder illustrates the

Organizational Structures of both the Public and Private sectors for the Project

implementation including the functions of each organization.




S-5

Department of AgriculturePhilippine Coconut Authority

CME of PoA

Department of Agriculture

Philippine Coconut AuthorityCME of PoA

PoA boundary

far mer

Barangay ABarangay A

Philippine Development bankPhilippine Development bank

Two Step loan

Japanese GovernmentJICA

Japanese Government

JICA

Two Step loan

Husk of the Coconut

CPA boundary

Iron

Steel

plant

Iron

Steel

plant

Bio-Cokes

SPC

PCA branchPCA branch

carbonizationcarbonization

dryingdrying

peletizationpeletization

farmer farmer farmer farmer farmer farmer farmer farmer

Barangay BBarangay B Barangay CBarangay C

7. Viability of the Project

The viability of the proposed Project is hinged on the possibility of mass producing bio-cokes

from coconut husk at reasonable cost as substitute for imported fossil cokes for the

manufacture of steel. The abundance of trash hush materials generated from the processing of

copra coupled with the huge demand of bio-cokes for domestic steel making necessitated the

conduct of actual experimental research and test of producing bio-cokes from abundant

coconut hush waste. The result of the experiment and test were astonishingly successful.

Bio-cokes from hush materials could be mass produced at Php 18 per kilogram as compared

with imported fossil cokes at Php 20 per kilogram. Based on test results, production of

bio-cokes is both economically and financially feasible as described hereunder:

① Unlike fossil coke, bio-cokes is non pollutant and is therefore compliant to the Kyoto

Protocol Agreement for environmental concerns.

② The use of abundant hush waste would generate income for sustenance farmers. This is

also one means of disposing husk waste effectively and efficiently without adversely

affecting the environment.

③ The establishment of bio-cokes processing plants will create job opportunities in rural

areas.




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④ Domestic production of bio-cokes will conserve the use of foreign exchange for the

purchase of imported fossil cokes.

The table below summarizes the financial viability of the proposed Project.

Project FIRR (Before Tax) FIRR (After Tax)

Calabarzon Project 15.41 % 11.33 %

Northern Mindanao Project

15.18 % 11.15 %

Note: WACC 1.51%

Study Report



MAIN TEXT

Study Report Chapter 1 Introduction



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Chapter 1 : Introduction

1.1 Background and Objectives

The Coconut Tree (Coco Nucifera in scientific name) is called “The Tree of Life” because of

the endless list of products and by-products derived from its various parts. It provides a

nutritious source of Meet, Juice, Milk and Oil that has fed and nourished populations around

the World for generations. It is said that nearly one third of the World’s population depends

on Coconut to certain degrees for their food and economy. Coconut is highly nutritious and

rich in Fiber, Vitamins, and Minerals and provides many Health Benefits beyond its

nutritional contents. In some Asian and Pacific Countries, Coconut Oil has been extensively

used in Traditional Medicine with its healing effects.

In the meantime, the Government of Philippines has created new Presidential Degree No.

in the month of January 2009, in order to foster the development of Renewable Energies in

the Republic. This Degree aimed at the improvement of National Energy Security and

encourages the development of Biomass-based Energies as one of the alternative sources of

sustainable energies. Coconut Husk is one of the potential materials of resource to be

developed along with this policy. In fact the Government of Philippines has been involved

various Research and Development activities through the Philippine Coconut Authority for

such purposes.

According to the Coconut Statistics published by the United Coconut Associations of the

Philippines, Inc., Total Nuts harvested in the Republic in the year of 2007 was 14,852.93

Millions. However, residue of the Coconut has been less utilized except the charcoal which

is commonly used for the domestic cocking purposes.

Whereas the NTT GP-ECO communication, Inc., a Consultancy farm of NTT Group of

companies has developed a concept to form Biomass-based Coke from Coconut Husk with

an attempt to explore a possibility to change Coconut Husk into a Coke through

Carbonization Processes so as to be used for Iron Smelting and Steel Casting processes in

the Philippines replacing the imported fossil resources-made Cokes. The primary objective

of the proposed Study is to undertake a Preliminary Feasibility Study along with the Scope

of Works as shown in the following articles.

1.2 Scope of Works

This Study aimed at the formulation of a Bio-cokes Production and Programmatic CDM

Project by utilizing the Coconut Husks in the Republic of Philippines. At present, most of

the Coconut Husks are abandoned except which were used for domestic cooking purposes.

This Project is also sought to be applied as a PoA (Programme of Activity) for securing




-2-

Certification of Emission Reduction (CER) to United Nations Framework Convention on

Climate Change (UNFCCC) under the framework of Kyoto Protocol. This Study shall

among others select the most suitable Bio-cokes Production Systems, recommend necessary

measure to realize, and drawn an implementation plan for the Project by collecting and

analyzing the data and information in the following fields;

・Character and Magnitude of existing Cokes Markets in the Philippines,

・Conditions and Issues that the Coconut Farmer and Industry currently face,

・Availability of Coconut Husks as the Raw Material for Bio-cokes Production,

・Present Logistic Systems for Copra and possible applicability for the Husk,

・Integration of the Proposed Production Systems into the existing Coconut Oil Mill

Systems,

・Potential applicability of the proposed concept for a PCDMP.

1.3 Study Area

The Study Area covers the entire Philippines, but specific focus has been given to two

Coconuts-reach Areas; Southern Tagalog (Calabarzon) and Northern Coast of Mindanao.

Under this Study, two case studies have been conducted within the selected Coconut-reach

Areas; First one for the Case Study based at the premises of Granexport Manufacturing

Corporation located at Illigan City, Lanao del Norte Province, while Second one for Goldex

Oil Mill located at Gumaca City, Quezon Province.

1.4 Study Schedule

This Study has been commenced from July 1st of 2009 and completed on February 15th of

2010. During the Study Periods, the Field Survey has been conducted for two times; the first

one from July 6 to July 15, 2009, while the second one from September 10 to September 16,

2009. The detailed Survey Schedules are shown in the Tables attached hereto as the

Appendix 1 and 2 respectively.

1.5 Study Team Member

This Study has been undertaken by the following Study Team Members whose functions and

areas of responsibility are shown in the following table.




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Table 1-1 Member of the Study Team

No. Name Assignment

1 Junichiro MOTOYAMA,Ph.D.

Team Leader, Legal and Institutional Systems, Economic and Financial Analysis, Project Implementation Plan

2 Antonio HONDA Socio-economic and Power Sector Analysis, Logistic Systems,Cost Estimation

3 Hiroyuki MONOBE Carbonization Producation Systems, Exhaust Heat Recovery Systems

4 Kei NIIDA Clean Development Mechanism(CDM), Carbonization Test

5 Nobuo NAKATA Material Balance Analysis, Technical Advisory

Study Report Chapter 2 Introduction to the Biomass-based Cokes and Its Market



-4-

Chapter 2 : Introduction to the Biomass-based Cokes and Its Market

2.1 Coconut as ““““The Tree of Life””””

The Coconut palm is an unarmed, tall, large palm, growing to a height of 25m for the large

varieties and 4m for the dwarf varieties, with the trunk reaching 30 to 50 centimeters in

diameter, thickened at the base. As the Coconut palm grows, old leave breaks away leaving

annular scar around the trunk. The pinnate leaves 3.5 to 6m long with a stout petiole, with

bright-green leaflets 60 to 100cm long, crown the top of the trunk. Each inflorescence is

polygamomonoecious, that is, it has both male and female flowers. The male flowers are

small and yellowish, while the female flowers are much larger and rounded. Flowering starts

at 5 to 8 years of age for tall varieties, and 3 to 4 years for short varieties, and occurs

continuously, thus the palm bears coconut all year round. Large production areas are in

particular found along the coastal regions in the wet tropical climate in Asia in the territory

of Indonesia, Philippines, India, Sri Lanka and Malaysia. In these countries millions of

people make a living from the Coconut Palm and its varied products. The Republic of

Philippines is the second largest production country after Indonesia with 23.2 per cent share

in the World.

Table 2-1 Coconut Production in major producing countries

Source:http://www.fao.org/docrep/005/y3612e.03htm




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2.1.1 Description of Coconut Tree

The Coconut Fruit has a smooth greenish covering. Within the outer shell is a fibrous hush

2.5 to 5 centimeters. The inner shell is brown and hard. When the Coconut Fruit is still

young, it contains a large amount of fluid or juice, during this stage the Coconut Meat is

ideal to be eaten alone or can be used for salad or can be added with milk for nutritional

drink. When the Coconut Fruit mature most fluid is absorb and its flesh thickens and

hardens.

2.1.2 Industrial Use of the Coconut

All the parts of the Coconut Tree, from root to tip, have unique industrial uses which include

the following:

(1) The Coconut Trunk and Root

Coconut Trunk produces hardy lumbers as well as pulp for papermaking. Out of the coconut

trunk, hardy durable wood is obtained to make benches, tables, carvings, picture frames, tool

boxes, and construction materials, among many others. Paper pulp can also be extracted

from the coconut trunk and other woody parts of the tree. Among the woody parts of the tree,

the trunk gives the highest pulp yield of 43%; and the petiole or the slender stop that support

the leaf, 32%. Tests also show that coconut coir (80%) and abaca bleached sulfate pulp

(40%) are a good combination in the production of offset book paper. Some medicine,

beverages and dyestuff are obtained from the coconut roots. The Root of Coconut Tree may

be used to produce astringents and antidiarrhea, as well as beverages and dyestuffs. Old

Coconut Trunk and Root may be used as a material for the proposed Bio-cokes production.

(2) Coconut Leave, Pith and Inflorescence

Coconut leaves produce good quality Paper pulp, Midrib brooms, Hats and Mats, Fruit trays,

Waste basket, Fans, beautiful Midrib decors, Lamp shades, Placemats, Bags and utility Roof

Materials.

Coconut Pith is considered as a “Millionaire’s salad” and one of the finest vegetables in the

Philippines. It can be served in many appetizing ways. Out of its Pith can be produced Coco

pickles, Guinataan and Lumpia. Its guinit can produce Helmets, Caps, Wooden Shoe Straps,

Handbags, Fans, Pictures and House decor like Lamps Shades and Guinit Flowers for the

table. Cubed in fairly large bits, it may be added to Spanish rice, or in long strips, to Arroz a

la Cubana, the Philippino Delicacies.




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Out of the bud of the coconut tree’s inflorescence is a juice called Coconut toddy or tuba.

The fermented juice is the common alcoholic drink in the coconut region. The fermented

tuba would be a good drink even to those who enjoy finer things. The principal uses of the

toddy are: fresh beverage; for producing alcoholic beverages; for producing vinegar; making

sugar; and a honey like syrup called “Coco Honey” and as a source of yeast for making

bread. Coconut toddy, after being left for 5 days then distilled, produces an alcoholic spirit

known locally as lambanog which is more or less 98% proof. In its taste, sweet toddy is a

liquid containing essentially 12 to 18 % sugar (sucrose). Other products from the coconut

tree’s inflorescence are Gin, Vinegar, Candy trays, and Wall decors.

(3) The Coconut Husk and Shell

Coconut husks are made of bristle fiber (10%), mattress fiber (20%) and coir dusk and shorts

or wastes (70%). Coconut husk are cheap source of firewood, and are also called as bunot,

used for buff waxed floors. Fibers from coconut husks are used in making Brushes,

Doormats, Carpets, Bags, Ropes, Yarn fishing nets and Mattresses, as well as for making

Pulp and Paper. The abundance of fiber makes it good as stable supply for cottage industries

that make brushes, doormats, carpets, bags, ropes, yarn fishing nets, mattresses, etc.

Coir fiber can also be used as substitute for jute in packing rice, copra, sugar, coffee and

sand. It is also suitable for making pulp and paper, etc. For the first time, the Philippines can

export coir fiber to Japan, Germany and the United States with the proper assistance

extended by the Government, the industry being new. Coconut Fiberboard is a novel and

innovative product made up of cement, coir, shredded wood, fronds and other

lingo-cellulosic materials that are available in Coconut farms which are otherwise

considered as agricultural waste. The wallboard which is termite-proof due to presence of

creosote and no binding material is needed as lignin is inherent in the Coconut Husk. The

board produced is as good as narra, plywood or masonite. Coir yarn, coir rope, bags, rugs,

husk decor, husk polishes, mannequin wig, brush, coirflex, and fishnets are other products

that can be obtained from the Coco husk. Out of coir dust can be obtained Coco gas,

Insulator, Insoflex, and Plastic materials and fish nets are other products that can be obtained

from Coconut Husk.

Coconut shell produces the core of the most saleable Household products and Fashion

accessories that can be turned to lucrative, wide-selling cottage industries. Among them are




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shell necklaces, Shell bags, Cigarette boxes, Shell ladles, Buttons, Lamp shades, Fruit and

ask trays, Guitars, Placemats, Coffee pots, Cups, Wind chimes, “Coco banks”, Briquetted

charcoal and Activated carbon. The most important use of the coconut shell is Activated

carbon produced from its charcoal. It is utilized in air purification systems such as cooker

hoods, air conditioning, industrial gas purification systems, and industrial gas masks.

Charcoal made from coconut shells are also used in producing activated carbon, used in air

purification systems such as cooker hoods, air conditioning, industrial purification systems,

and industrial and gas masks. Whole coconut shells, cleaned and polished, have traditionally

been in Filipino culture as coin banks. Both of Coconut Husk and Shell can be good

materials for the proposed Bio-cokes production.

(4) Coconut Meat

The Fresh Coconut Meat is the main raw material to produce buko-pie, one of the famous

local delicacies, and is often used for Salads, Halo-halo (crushed ice with sweetened fruit),

Sweets and Pastries. A Matured Coconut or niyog is used in making sweets and special

Filipino dishes, while the “Sport fruit” of the Coconut is considered as delightful delicacy

and largely used for making preserves and ice cream. It cannot be kept in storage and will

germinate and it has three layers: semi acid, soft and hard meat.

From Coconut meat the following can be processed: Coco flour, Desiccated coconut,

Coconut milk, Coconut chips, Candies, Bukayo or local sweetened shredded coconut meat,

Latik, copra and Animal feeds. Coconut flour can be used as a wheat extender in baking

certain products without affecting their appearance or acceptability. The Coconut milk is

good protein source. Whole coco milk contains about 22% oil, which accounts for its

laxative property. Meantime, other uses of “Sport fruit” have been found, such as facial,

hand and hairdressing creams, shampoo, toothpaste, vitamin carrier in pills, salicylic acid

ointments, sulphur ointments and even muscle pain relievers.

Dried Coconut meat is called as “Copra” that has high oil content, as much as 64%. Coconut

oil is the most readily digested of all fats of general use in the World. The oil furnishes about

9,500 calories of energy per kilogram. Its chief competitors are Soya bean oil, Palm oil and

Palm kernel oil. Virgin Coconut Oil (VCO), taken orally, retards aging, counteracts heart,

colon, pancreatic and liver tumor inducers, and is easy to digest. Coconut oil is also used to

make soap and shampoo due to its high saponification value in view of the molecular weight

of most of the fatty acid glycerides it contains.




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In the detergent industry, Coconut oil is very important. Its most outstanding characteristic is

its high saponification value in view of the molecular weight of most of the fatty acid

glycerides it contains.

An advantageous utilization of the coconut oil as detergent was discovered in a May 1951

study wherein a formulation using coconut oil was found to be an effective sanitizer. Other

products from Coco oil are Soap, Lard, Coco chemicals, Crude oil, Pomade, Shampoo,

Margarine, Butter, Cooking oil and recently Bio-fuel, as it is used in Coconut Methyl Ester

(CME).

(5) Coconut Water

Coconut water, the liquid endosperm inside the coconut fruit, can be used in making

Coconut Water Vinegar, Coconut wine, and chewy, fiber-rich Nata de coco, good as a dessert

and as a laxative. Coconut water can also be used as a growth factor and as a substitute for

intravenous fluid or dextrose. The Coconut water has been however largely thrown away

during copra making and becomes great waste.

Another breakthrough use is the Coconut Water Therapy to cure renal disorders. “Bukolysis”,

as it also called, is the medical process of reducing or dissolving urinary track systems using

buko water from 7 to 9 months old of Coconut. For preventive medication, water from one

mature coconut consumed daily, could almost guarantee that the formation of stones in the

urinary tract will be avoided. To those already afflicted, the Coconut water is commonly

promoted as an economical thirst quencher, hunger satisfier and medical cure for renal

disorders all in one.

Using coconut water, a nata de coco-like growth produced after 14 days which, when cooked

in syrup, is a popular dessert. When mixed with other ingredients, like the making of fruit

salad, it is will enhance the flavor of the dish. This nata-like growth is dextran and can be

made thoroughly to comply with the specification for clinical dextran, and then we have in

the coconut water an important contribution in the atomic defense against radiation sickness.

2.1.3 Philippine Coconut Authority (PCA)

The Philippine Coconut Authority (PCA) was created pursuant to Presidential Decree 232 on

June 30, 1973. It absorbed and assumed the Powers and Functions of the previous Coconut

Coordinating Council (CCC), the Philippine Coconut Administration (PHILCOA) and the




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Philippine Coconut Research Institute (PHILCORIN). In view of this development, the

Government of the Philippines deemed it necessary to create an agency that would address

that situation, thus the PCA was created on June 30, 1973 by virtue of P.D. No. 232. It

absorbed and assumed the powers and functions, including the personnel and assets of the

then defunct CCC, PHICOA, and the PHILCORIN.

PCA became an independent public corporation on July 14, 1976 pursuant to P.D. No. 961,

reporting directly and supervised solely by the Office of the President. This decree was the

first codification of the laws dealing with the development of the coconut and other palm oil

industry. The Code was later revised on June 11, 1978 by P.D. No. 1468 (“Revised Coconut

Industry Code”) which eventually became the charter of PCA as a public corporation.

Finally, on January 30, 1987, pursuant to Executive Order No. 116, the PCA was officially

declared as an attached Agency of the Department of Agriculture (DA). The declaration of

transfer to DA from the Office of the President was enacted to provide overall coordination

and monitoring of policies and programs of various sectors in agriculture. The attachment

was confirmed and incorporated in the Administrative Code of 1987.

Today, PCA is the sole Government Agency in the Republic that is tasked to develop the

industry to its full potential in line with the new vision of a united, globally competitive and

efficient coconut industry. Considering the situation, the Study Team has approached to PCA

requesting the functions of counterpart in the Philippines for conducting the Preliminary

Feasibility Study on the production of Biomass-based Cokes from the Coconut Wastes in the

Philippines, and they have duly undertaken such functions and fully supported the Study

Team.

2.1.4 Jurisdiction and Organization of PCA

(1) Organizational Structure

Headquarters of PCA is located at Quezon City, Metro Manila, with total staff complement

of 1,741 while currently only 1,372 staff are employed to provide the designated Services

down to the Municipal level. PCA’s Regional Offices are strategically located within 12

Coconut Regions, 69 Provinces and 1,419 Municipalities. 90 % out of such staff are

technical, extension and research specialists. Physical Infrastructures of PCA include three

(3) Research Centers in Albay, Bicol, Davao and Zamboanga in Mindanao and Extension




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Training Center in Davao. Organizational Structure of PCA is illustrated as under:

Source: http://www.pca.da.gov.ph/orgstruc.php

Fig 2-1 Organizational Structure of PCA

As illustrated in the Figure No. herein above, the Governing Board is the sole and final

decision-making institution for PCA. The members of the Governing Board consists of 6

Members and the Chairman who is the Secretary of the Department of Agriculture,

Government of the Philippines. Meantime, day-to-day Operations of PCA is undertaken by

the Team of five (5) key officers; Administrator being the Leader of the Management Team,

and four (4) Deputy Administrators responsible for the Groups of Research and

Development, Trade and Marketing Development, Field Services, and Corporate Services

respectively.

(2) Major functions of PCA

PCA has been established with the Mandate to oversee the development of the Coconut and

other Palm Oil Industry in all its aspects and ensure that the Coconut Farmers become direct

participants in, and beneficiaries of, such development and growth, according to the Article I,

Section 2 of the Presidential Degree No. 1468 (Revised Coconut Industry Code). Under this

Degree, PCA is given, among others, the following five (5) major Functions and

Responsibilities;




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1. Formulate and Promote a Strategic and Comprehensive Development Program for

the Coconut and other Palm Oil Industry in all its aspects;

2. Implement and Sustain a Nationwide Coconut Planting and Replanting,

Fertilization and Rehabilitation, and other Farm Productivity Programs;

3. Conduct Research and Extension Works on Farm Productivity and Process

Development for Product Quality and Diversification;

4. Establish Quality Standards for Coconut and Palm Products and By-products; and,

Develop and Extend the Domestic and Foreign Markets;

5. Enhance the Capacities and ensure the Socio-economic Welfare of Coconut and

Palm Farmers and Farm Workers.

In order to implement these functions, PCA being a Public Corporation, is requested to

perform their Operations along with a Mission to Promote the development of a globally

competitive Coconut and Palm Oil Industry that would contribute to Food Security,

Improved Income and Enhanced Participation of stakeholders.

The proposed production of Bio-cokes from the wasted Coconut Husk will be qualified as a

Project that can satisfy the Function and Responsibility No. 3, No. 5 and the Statement of

Corporate Mission.

2.1.5 Significance of Coconut Industry

The coconut is called “The Tree of Life” because of the endless list of Products and

By-products derived from its various parts. Food, shelter, fuel, and daily household items –

name it, the Coconut has it. As stated in Chapter 2.1, the Philippine is the second largest

producing country of Coconut in the World. Thus, the Coconut industry is a dominant sector

of Philippine Agriculture. According to the Coconut Statistics in the year of 2007, about

3.258 million hectares out of the 12 million of farmlands are devoted to Coconut cultivation

which accounts approximately 27% in the entire cultivated lands. There are around 331




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million bearing coconut trees in the country which spread into 1,1,95 coconut municipalities

within 68 out of 79 Provinces nationwide. Annual average Coconuts harvested within the

last ten (10) years is approximately 14 Billion and approximately 43 Coconut were

harvested from one Coconut Tree in average, which is lower than that of other country such

as Malaysia. The figures and trends in the Coconut Production in the Republic in the last ten

(10) years from year 2007 are summarized as follows;

Table 2-2 Production of Coconut in the Philippines (1997- 2007)

Source: http://www.pca.da.gov.ph/cocostat.php#production

Coconut farms are widely distributed nationwide, largely in regions of Southern Luzon, in

the North and Mindanao in the South. 69 out of 79 provinces are Coconut areas. There are

3.5 million Coconut farmers in the Philippines, and about 25 million Filipinos are directly or

indirectly dependent on the Coconut industry.

The Philippine coconut industry provides an annual average of 5.97% contribution to the

Gross Value Added (GVA) and 1.14% to the Gross National Product (GNP) of the

Philippines, and accounts for a 59% share of global coconut exports. It is among the top 5

foreign exchange earners, with an average of US$ 760 million per annum. This foreign

currency earner provides livelihood to one-third of the Country’s population.




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Table 2-3 Domestic Use and Exports of Coconut (Copra)

(2001 – 2007)

YearYearYearYear Domestic UseDomestic UseDomestic UseDomestic Use ExportsExportsExportsExports

2001 0.513 2.449

2002 0.513 1.767

2003 0.506 2.171

2004 0.444 1.792

2005 0.468 2.144

2006 0.666 2.034

2007 0.625 1.608

In Mill MT(Copra Terms)

Source: Assembled from various figures released by PCA

2.1.6 Philippines Laws and Regulations Relating to Coconut Industry

There are two (2) important laws and regulations in relation with the Administration of

Coconut Industry; (1) Coconut Preservation Act of 1995, and (2) Bio-fuel Act of 2006.

Republic Act No. 9367, also known as the “Coconut Preservation Act of 1995”, prohibits the

cutting of coconut trees except for any of seven grounds specified in the law and only after

the issuance of a permit by the Philippine Coconut Authority (PCA).

Republic Act No. 9376, also known as the “Bio-fuels Act of 2006” was approved on January

12, 2007 and took effect on May 6, 2007. It mandates a minimum of 1% bio-diesel by

volume blended into diesel engine fuels sold in the Philippines. This percentage would

increase to 5% in 2 years and 10% in 4 years. Bio-diesel refers to Coconut Methyl Ester

(CME), and it is called as Coconut Bio-diesel or Coco Diesel.

2.2 Introduction to the Biomass-based Cokes made by the Coconut Wastes

Cokes and charcoal indicate almost same thing, but these can be called distinctly, cokes in

case that the fixed-carbon of it is more than 80 percent, and charcoal less than. And, in

terms of application, it is called cokes for industry use such as iron manufacturing, charcoal

for fuel.




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In terms of standard, cokes are defined in detail more than charcoal. In fact, the grain size

of cokes is smaller than charcoal generally, because cokes are needed to be high carbonized

charcoal, and uniform size of its powder.

Cokes are generally made from coal, but also it is possible to be made from cellulose

biomass. Until a few years ago, the cellulose biomass as an agricultural residue have not

been used well, although it is recently useful on various fields and the amount of used

biomass is increasing.

In this study, utilization of the Cellulose Biomass derived from Coconut Husk is the center

place and try to transform these resources to Biomass-cokes as an alternative to fossil cokes

for the use of Steel Smelting and Foundry Industries in the Philippines.

The outline and required specifications of Cokes for Electrical Furnace use are indicated in

the following table 2-4.

Table 2-4 Specification for Bio-Cokes derived from Coconut

1 Grain

This value is carbon grain which is used as activated carbon in local

(standard size, Large:3.3-8mm, Medium:2.0-3.3, Fine:0.1-2.0mm)

Large for reduction, Fine (Pulverized cokes) for fuel by blowing.

2 Carbon

intensity

More than 85%

Higher Heating Value is preferable but balanced carbonization is important. In

general, Coke with higher Volatile performs higher Heating Value.

3 Hardness

Harder one would be recommended because of alternative to cokes, but there is no

standard. Pulverized cokes could be softness, because it will be used in the form of

powder.

4 Volatile Maximum 8% of Volatile is allowed within the Biomass-cokes for the use of Steel

Smelting. The Volatile Ratio of Fossil Cokes is 1% only.

5 Density

Although it is not required as a part of Industrial Specification of the Cokes, the

Density of Fossil Cokes is 1%, thus, the similar figures may be required as an

alternative to the Fossil Cokes.

6 Fineness

For the use of Powder Cokes for Electric Furnace, Grain Size is not sensitive matter

for the biomass-cokes. Cokes for the Electric Furnace is used to be grained into

smaller sizes before being browed into furnace.

7 Activated

intensity

No need

8 Pollution

Coconut trees are grown alongside the coast line and contain considerable amount of

chlorines. Certain countermeasures shall be taken during the process of Biomass-coke

production for deducting sulfurs and dioxins from the exhaust gases, but no specific

measure is required when the Biomass-coke is used in the process for the Smelting.




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9 Quality

If Carbon content is less, it influences to the capability for Reduction. Although it is

not clearly defined by the authority, it is recommended that the Biomass-cokes shall

be used in commensuration with Fossil Cokes, ratio of the Fossil Cokes shall be

minimum 40% of the entire Cokes.

10

Cokes

/Electricity

consumption

Default figure for smelting Steel Scrap per one ton is 30 kgs., however, it will be

fluctuated by operators of the furnace. Electricity Consumption shall be correlated to

the amount of Carbon contents.

11

Material

supply / stable

supply

Since the growers of Coconut Trees are small holder, it is required to conduct a

detailed survey on the procurement and logistics of Husk. There is no data on the

production and distribution and it is recommended to conduct a survey on the logistic

systems of Coconut Products in particular on the functions of the Middleman and

Coconut Growers Cooperatives. If the proposed Biomass-cokes can be used for

Smelting Furnace, there will be great amount of demands for Biomass-cokes and

consistent supply of the Husk became essential.

12 Carbonization

method

It is difficult to produce the cokes by traditional method because of the need of higher

temperature. It may be needed to consider the revised traditional garden carbonization

method which is under lower temperature relatively.

13 Price

The price of imported cokes from China is likely to increase up to 15,000JPY/t, but

marketing price may be 25,000JPY/t. Whether the price of husk cokes which is

carbonized and transported can be stable to supply.

As shown in the table 2-4, consistent supply of the materials (Husk) and its quality are

matter of consideration.

It is indicated split fruit of coconut and possible to carbonizing or coking region on figure

2-2.

SPLIT FRUITWHOLE FRUIT

Source: Technical Data Handbook on the COCONUT by Philippine Coconut Authority P17

Fig 2-2 section of Coconut and possible part to the Cokes

Coconut shell is optimum region for material of cokes and it is easy for molding to cokes,




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though the rate of yielding is low. Because shell is used for copra dry heat source, fuel of

boiler, charcoal fuel for cooking and for export, cause of shell already has material of

activated charcoal and having high calorific value.

Meanwhile, husk is rich in fiber cellulose and the fiber is commonly used for bond or mat.

Residue amount of total husk is less than 0.5 percent. That is the reason why most of husk

is disposed. The husk made up 35-40 percent of the weight of coconut (at harvesting time).

In addition, husk is made from fiber which is called as Coir and consists approx. 40 per cent.

The others are made from powdered state between fiber which called Dust or Coco-peat that

contribute approx. 60 percent. Figure 2-3 is the operation of detaching husk and coir.

The coir and dust have not transformed carbonizing and coking yet, it turns out that both

materials could be transformed to perfect cokes if using certain carbonizing technology

developed in Japan. As a result, husk was picked up as the material for Coke on this

Survey.

The operation of detaching husk and discarding husk

Fruit inside Shell

Coir and Dust

Whole Fruit

Fruit inside Shell

Fig 2-3 Coir (left) and Husk removing from coconut (right)

It is possible to estimate the existing volume of husk with each parts of fruit yield. (Table

2-5. The Weight and Component rate of husk). On this report, the following values on

the Coconut will be used for analytical purposes.

Table 2-5 weight and component rate of husk

Classification Weight(g) Name Weight(g) %

Coir 165 16 Husk 413

Dust 248 23

Shell 177 17

Copra 339 Meat 180 17




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Oil 112 11

Albumen 47 4

Juice 124 12

Total 1,053 100

Husk

39%

Juice

12%

Kernel or

Copra

32%

Shell

17%

Source: Technical Data Handbook on the COCONUT by Philippine Coconut Authority

The amount of coconut production in Philippines is 14 million ton per year; husk is 39

percent, that is, 5.46 million ton. The carbide of husk is 1.09 million ton if the yield is 20

percent. In addition, the amount of fixed carbon of the carbide and the yield are described

later.

2.3 Surrounding Environment for the Introduction of Biomass-based Cokes

Under this chapter, it describes various terms surrounding the biomass-derived cokes with

analyzing product trend of coconut and supply-and-demand.

2.3.1 The trend of coconut production

The amount of husk which is material of cokes is proportional to the amount of coconut

production. Although, the amount of coconut production have been reduced for a few

years.

Coconut industry in the Philippines is facing with prosperity or declination.

It is attributed the possibility of declination to the amendment of Agricultural Land Act. If

it is amended Agricultural Land Act, the owner of coconut farm have to allocate their land to

peasants. For that reason, it is possible that the owner think cutting coconut trees and




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selling them are better than new investing to coconut farm.

Meanwhile, it is attributed the possibility of prosperity to the renewable energy law.

According to the law, the gas oil of bus which is public transportation shall be shifted to

bio-fuels at least 3 percent (however, any derived bio does not matter). Therefore,

bio-diesel production has been highlighted. And coconut oil production will accelerate in

the future, because Coconut is the only candidate for bio-diesel material in the Philippines

now. Although there is no telling that which is stronger effect, the amendment of

Agricultural Land Act or the renewable energy law. In fact, the production capacity of

coconut oil mills has not been working more than 50 percent (that is, the production has

been reducing). The following figure 2-4 is the production ratio of the amount of copra

production and oil mills. It means that the amount of coconut production has been going

sideways or reducing slightly because the amount of copra production is proportional to the

amount of coconut production. And the operational ratio of oil mills has also been

fluctuated at around 50 percent.

Source: Coconut Statistic 2007, United Coconut Association of the Philippines, Inc P28 Fig 2

Fig 2-4 Copra production amount and installation utilization

The issues of the Coconut Products in the Philippines are as follows.

The owners of Coconut plantation have been operating themselves as a small holder and

they occupy about 30 percent of growing area and covering about hundreds of hectares.

And the other about 70 percent of growing area which is divided less than a few hectares are

entrusted to peasants. Almost these peasants have dual jobs, working in the Coconut Farm

and working as fisherman. Unlike Palm Oil production which is operated on a larger scale,

Coconut farm is smaller scale than that of the Palm farm.




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There are two scales in Coconut Oil Mills. In the large-scale oil mills, kernel which was

removed husk from fruit is collected. The fruits which are collected to the mills are

including copra, shell and juice. Copra is cut after dried, heated and milled oil. Coconut

oil which was milled oil is called coarse coconut oil. It is transported to purification

process, and processed to end products like virgin coconut oil. Oil cake which was

remained after milling is sold as feed. In addition, shell is carbonized and sold as material

of activated charcoal, moreover surplus shell is used as fuel on copra drying process or oil

mill process. Juice is used as material of coconut milk or disposed. In this way, oil mills

are managing diversified.

Meanwhile, the small-scale oil mills are only milling oil, and coarse coconut oil is sold to

refining plant. That is, the small-scale oil mills buy dried copra and mill oil, and the oil

cake is sold as feed. Although it is necessary to heat copra around 300 degree before on

milling oil process, the small-scale oil mills have used hot air burner with fossil fuel as heat

source of copra and it is not necessarily the case that they have used coconut residue such as

shell.

Copra is dried in each Farmer or Copra Buying stations. Heat source for drying is basically

by Sun and sometime Coconut Residues such as shell or husk are used also. For drying by

heat, flat bed dryer is used for drying process. Husk can not be processed as

Biomass-cokes when it just has been removed from the tree, because the moisture content is

very high.

The intermediary who is called Middleman intermediate for collecting and transportation

dried copra. Middleman buys dried copra from farmer when picking season of coconut

fruit three times a year. In addition, Middleman supports farmer financially by paying

advance money to farmer, supplying fertilizer and teaching cultivation. Oil mills contract

with a few hundred of middleman (but they are not exclusive) in order to collect dried copra

all around the year.

Copra Buying stations have some forms which are managed by owner of the Formers’

Co-operatives, and managed directly by large-scale Oil Mills. Generally, there are not group

of coconut farm, but middleman has been active on collecting.

As a result, it turns out that husk is less-utilized on the process of coconut products. Husk

is left outside on farmer’s house or coconut farm, or rarely used for fiber or dust uses.

Therefore, it seems that the amount of husk production will go sideways in the future, unless




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the drastic promotion policy is being introduced.

2.3.2 The amount of the Productivity of Coconuts-originated coal

Classification Weight(g) %

413 39

Coir 165 16 Husk

Dust 248 23

Shell 177 17

339

Meat 180 17

Oil 112 11 Copra

Albumen 47 4

Juice 124 12

Total 1,053 100

Husk

39%

Juice

12%

Kernel or

Copra

32%

Shell

17%

In the Philippines, coconut farm land is about 3.2 million hectares in area, and coconut fruit

production is 14 million tons per year. Therefore, as shown in the table 2-5, the amount of

shell production is 2.38 million tons (17 percent) per year. Shell-derived charcoal is

470,000 tons if the carbonization yield is 20 percent ratio by weight. Also, Cokes which

carbon ratio is 85 percent will be produced about 390,000 tons, if shell-derived charcoal

which carbon ratio is 70 percent.

Meanwhile, there are two types of husk-derived charcoal, one is husk itself and the other is

dust (a part without fiber coir). As shown in the table 2-5, the amount of husk production

is 5.46 million tons (39 percent) per year. Husk-derived charcoal is 1.09 million tons if the

carbonization yield is 20 percent1). Likewise, the amount of dust production is 3.22

million tons per year, dust-derived charcoal is 640,000 tons per year if the carbonization




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yield is 20 percent. However, the 20 percent carbonization yield is the value in the case of

self heating-type Carbonizer, and about 27-30 percent in the case of outer heating-type

Carbonizer. In cokes equivalent, husk-derived cokes is 890,000 tons, dust-derived cokes is

520,000 tons. In this survey, it is supposed to alternate cokes with pellettized charcoal.

According to the statistics, Coir for consumption in the Philippines is about 1,000-1,500 tons,

for export market to other countries is about 1,000 tons. It is about 7,000 tons in husk

equivalent, considering the amount of husk production in the Philippines is 5.46 million tons

per year, about 99.8 percent of husk is not used.

Then it is estimated that the amount of usable husk from transport point of view. It is not

easy to transport husk, because about 50 percent of the farm land is located far from roads

side. Therefore, the remaining about 50 percent is realistically useful for further processing.

Under this assumption, it is estimated that available husk for processing is about 2.73

million tons, carbide is about 540,000 tons and cokes is about 440,000 tons. Besides,

coconut farm which is along the main roads is about 15 percent of the total farming area, the

accumulated amount of husk is estimated as 810,000 tons; carbide is 160,000 tons and cokes

is 130,000 tons. It is anticipated that the volume of such husk can be transported easily.

2.4 Potential Market for the Biomass-based Cokes in the Philippines

2.4.1 Needs for the Biomass-based Cokes

The largest consumer of cokes in the Philippines is steel plant. (It is used for chemical

industry or gas for fuel, but it is very miner.) Steel plant in the Philippines is not the one

which has blast furnace but the other one which manufactures carbon steel with melting

scrap steel in electric furnace. In the Philippines, there are 12 this type of steel plants, the

total capacity of production is 1.2 million tons per year.

There are two ways for cokes use of electric furnace which are materials for reduction and

fuel use. First of all, on materials for reduction, it is used 20-30 kilograms cokes per ton of

scrap steel. Accordingly, it is necessary maximum of 36,000 tons of cokes for Philippines

as a whole. However, the amount of bio cokes demanded is up to 20,000 tons because steel

plants want to use 1 to 1 relation between coal cokes and bio cokes in order to keep quality

of cokes. Meanwhile, for fuel use, it is used instead of coal fines. It is only Steel Asia in

Calaca which has breeze injector. According to the company, the annual consumption is




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3,500-4,200 tons, but the demand will be 7,000-8,400 tons if they add one more same

injector in the future. If it is used 1 to 1 relation between coal cokes and bio cokes, the

amount of demand is about 5,000 tons.

Therefore, the amount of utilizable bio cokes of all steel plants in the Philippines is 25,000

tons per year. And there are enough for 50,000 tons if all coal cokes are alternated to bio

cokes. Incidentally, the amount of bio cokes production which derived potential coconut

husk in roadside farm is 130,000 tons.

Besides this, there is a method for utilization that they import iron ore from Brazil, and

sintering processes in Cagayan de Oro, Northern Mindanao, then export it to JFE Steel

Corporation in Japan. Philippine Sinter Plant is the only one in its kind. Essentially, it is

not necessary cokes on sinter operation process, but JFE Mills in Japan has surplus of Fossil

Cokes in this recession of late years, so Philippine Sinter Plant uses 100,000 tons of Fossil

Cokes per year which is imported from JFE Japan as for their sintering processes. The

blend ratio of cokes and powdered coal is 20 percent of cokes and 80 percent of powder coal.

They use the powder coals by adjusting the grain size. The company once considered

kernel coal from Malaysia oil palm to replace the fossil cokes, but they have not planed to

use it now. Because firstly varying in quality, secondly it has varied calorific value, and the

size and the contamination are different by each supplier, lastly the price is relatively

expensive, and the like. It is however considered that Philippine Sinter may use

Biomass-cokes for their vertical furnace where burns the gypsum, because it does not

require stricter standards in quality control. At present, they use coal which imported from

Viet Nam for fuel with heating slacked lime. If Biomass-cokes are cheaper than these coals,

it may replace with imported coals for the magnitude of approx. 400-1,700 tons per year.

Currently, the part of coir of husk is used for cooking fuel, packing material, honeycomb

board for construction use, filter, mat, net for preventing erosion of the slope, gardening

material and like that. However, the domestic utilization volume is 1,500 tons and the

volume of exports is 1,000 tons because each market is too small. If it is used as husk, it is

equivalent to 7,000 tons.

The conclusion of this paragraph is as follows.

○ Supply quantity




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Coconut-derived husk and cokes which can get from agricultural land (equivalent to 50

percent of all the Coconut Growing area) without difficulty to transport are 440,000 tons.

Among them, coconut-derived husk and cokes which are from farm in convenient place are

130,000 tons.

○ Demand quantity

On the other hand, the demand quantity for alternative Cokes in steel plant is maximum of

50,000 tons (including powdered cokes for injector), alternative fuel coal for sinter furnace

is 2,000 tons. The total is approx. 52,000 tons. This is fewer than about 15 percent of

available supplies 130,000 tons.

2.4.2 Supply amount in northern Mindanao and Calabarzon

This chapter describes about supply quantity of husk and cokes in northern Mindanao and

Calabarzon which are surveyed under this study.

There is Treasure Steelworks Corporation which was reorganized from the former public

steel plant located at Iligan in Mindanao, the biggest in its kind in the Philippines. The

Steel Smelting capability of Treasure Steelwork Corporation is about 300,000 to

preliminary feasibility study in the philippines study report · 2012. 12. 2. · 2.1.5...

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