South Aceh Bio-oil Production


STC, in partnership with Forest Carbon, has developed a new paradigm for biofuel production in Indonesia by utilizing non-food grade waste streams from the oil palm industry. In the landscape of southern Aceh, which contains pristine wilderness and a plethora of invaluable flora and fauna, STC has received support from USAID under the Indonesia Forest and Climate Support (IFACS) program to actualize this vision.

Oil palm fresh fruit bunches (FFBs) are neither robust nor durable so have a limited window of 24-48 hours in which high-value, food-grade oil can be extracted. But in southern Aceh, a significant volume of the oil palm FFBs are either shipped long distances to North Sumatra or not shipped at all, creating a viable waste stream for energy production.

Many palm plantations in southern Aceh (Kabupatens Aceh Selatan, Subulussalam, Singkil) are relatively new and are located on the forest frontier. Small-holder expansion often comes at the expense of natural forest with encroachment into Gunung Leuser Ecosystem, including the Singkil Swamps, thus reducing biodiversity and increasing GHG emissions.


STC is creating an internationally-certified sustainable biofuel supply chain and feedstock processing facility. STC has produced a framework to introduce economic gains for smallholder oil palm producers and local communities while serving to encourage forest conservation in the region. The framework utilizes innovative technologies to certify the bio-oil products under the Dutch NTA 8080 certification system for sustainable biomass, which is recognized under the European Commission’s Renewable Energy Directive (RED).

Through the design of a spatial database for ArcGIS that is integrated with Google Earth, STC is able to track the supply chain, and calculate GHG emissions and land use change in the region. These tools will accurately assess the carbon footprint, improve distribution and transportation efficiency, and oversee the extensive supply chain that covers thousands of producers and processors.


The facility will produce a new bio-oil product called “PowerOil”: a substitute for diesel and bunker oil which can be used in power plants and industrial steam engines. PowerOil is produced from high free fatty acid (FFA) crude palm oil pressed from waste fruits or from sludge oils recovered from the palm oil processing facilities. The oil has a FFA content of ~25% containing impurities under 2%. This product costs less to produce than biodiesel.

Power oil can be used to replace conventional GHG-emitting imported diesel in combustion engines used for power production in industrial applications such as mills, mines, hotels or malls.