Professional Documents
Culture Documents
in the Philippines
Study Report
March 2010
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
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
Appendix 2 : T.O.R.................................................................................................................................. 1
List of Table
Lists of Figure
Abbreviation
EXECUTIVE SUMMARY
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.
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
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.
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..
CDM(1)
(1) CDM(2)
(2)
*Husk
Copra
Steam boiler
Cooking
Collection
Dilution Copra Reduction
Drying materials
Drying
Pelletizer
Grinder
Packing Bio-cokes
replacedfr
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.
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.
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.
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.
Department
Department ofof Agriculture
Agriculture
Philippine
Philippine Coconut
Coconut Authority
Authority
CME
CME of
ofPoA
PoA Japanese
Japanese Government
Government
JICA
JICA
PoA boundary
PCA
PCA branch
branch
Two Step loan
drying
drying
Two Step loan
Iron
Iron Bio-Cokes
Steel
Steel carbonization
carbonization
plant
plant
peletization
peletization
Barangay
Barangay AA Barangay
Barangay BB Barangay
Barangay CC
far mer farmer farmer farmer farmer farmer farmer farmer farmer
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.
S-5 Preliminary Feasibility Study on the Production
of Bio-Cokes and Programmatic CDM Project
in the Philippines, March 2010, ECFA
Study Report Executive Summary
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
15.18 % 11.15 %
Project
MAIN TEXT
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.
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
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of Bio-Cokes and Programmatic CDM Project
in the Philippines, March 2010, ECFA
Study Report Chapter 1 Introduction
・Conditions and Issues that the Coconut Farmer and Industry currently face,
・Present Logistic Systems for Copra and possible applicability for the Husk,
・Integration of the Proposed Production Systems into the existing Coconut Oil Mill
Systems,
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.
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.
This Study has been undertaken by the following Study Team Members whose functions and
areas of responsibility are shown in the following table.
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.
Source:http://www.fao.org/docrep/005/y3612e.03htm
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.
All the parts of the Coconut Tree, from root to tip, have unique industrial uses which include
the following:
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.
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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of Bio-Cokes and Programmatic CDM Project
in the Philippines, March 2010, ECFA
Study Report Chapter 2 Introduction to the Biomass-based Cokes and Its Market
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.
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
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.
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.
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).
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.
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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of Bio-Cokes and Programmatic CDM Project
in the Philippines, March 2010, ECFA
Study Report Chapter 2 Introduction to the Biomass-based Cokes and Its Market
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.
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
Source: http://www.pca.da.gov.ph/orgstruc.php
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.
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;
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.
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.
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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of Bio-Cokes and Programmatic CDM Project
in the Philippines, March 2010, ECFA
Study Report Chapter 2 Introduction to the Biomass-based Cokes and Its Market
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;
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.
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.
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.
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.
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 FRUIT
WHOLE FRUIT
Source: Technical Data Handbook on the COCONUT
by Philippine Coconut Authority P17
Coconut shell is optimum region for material of cokes and it is easy for molding to cokes,
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Study Report Chapter 2 Introduction to the Biomass-based Cokes and Its Market
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.
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.
Coir 165 16
Husk 413
Dust 248 23
Shell 177 17
Copra 339 Meat 180 17
Oil 112 11
Albumen 47 4
Juice 124 12
Juice
12%
Husk
Kernel or 39%
Copra
32%
Shell
17%
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.
Under this chapter, it describes various terms surrounding the biomass-derived cokes with
analyzing product trend of coconut and supply-and-demand.
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.
Source: Coconut Statistic 2007, United Coconut Association of the Philippines, Inc P28 Fig 2
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.
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
Classification Weight(g) %
413 39
Husk Coir 165 16
Dust 248 23
Shell 177 17
339
Meat 180 17
Copra Oil 112 11
Albumen 47 4
Juice 124 12
Total 1,053 100
Juice
12%
Husk
Kernel or 39%
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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in the Philippines, March 2010, ECFA
Study Report Chapter 2 Introduction to the Biomass-based Cokes and Its Market
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.
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
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.
○ Supply quantity
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.
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 tons per year.
If it is necessary to product 1 ton of pig iron is 25 kg of cokes, the necessary quantity of
cokes is 7,500 tons per year. On the other hand, the amount of coconut product in northern
Mindanao is 1.6 million tons per year. According to the same estimate, available supplies
of husk and cokes are 15,000 tons. This is equivalent to double scale of the demanded
quantity. Moreover, the supply quantity become four times, if the mixed combustion ratio
of husk and cokes is 50 percent.
Steel Asia which is located at Calaca District in the Province of Batangas, the center of
Calabarzon is a sophisticated plant, and they product 300,000 tons of pig iron per year as
well. The demanded quantity of cokes is 7,500 tons, because the amount of pig iron
production of Steel Asia is similar to that of Treasure Steelworks Corporation. Additionally,
Steel Asia, the demanded quantity of powdered cokes for fuel use is up to 8,400 tons, there
are 16,000 tons of demand cokes in total as described above. The annual demanded
quantity of cokes is 8,000 tons, if the mixed combustion ratio is 50 percent for any use.
Meanwhile, the supply quantity of husk and cokes are 11,000 tons because the amount of
coconut production in the same area is 1.2 million tons. This is slightly more than the
demanded quantity of the Cokes for Steel Asia. There is a possibility that the real supply
quantity is more than 11,000 tons because Calabarzon area is almost flat ground and unlike
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Study Report Chapter 2 Introduction to the Biomass-based Cokes and Its Market
Mindanao, then it is estimated that the farm area which can be transported easily is more
than 15 percent.
There are many uses for carbonized coconut husk except alternative cokes for steel
manufacture.
In the process of Coconut Oil Mill, dried copra is heated around 100 degrees Celsius, hard
fat inside copra is melted, and squeezing oil. For heating, coconut shell is burnt for fuel by
boiler, producing steam (1.1 atmospheres, around 110 degrees Celsius), then drying it by
this.
Shell of Coconut becomes material for activated charcoal. The amount of export of
shell-derived charcoal is about 30,000 tons in 2007, and material shell equivalent is about
300,000 tons. Besides, shell-derived charcoal is about 25,000 tons per year, and material
shell equivalent is 100,000 tons. Therefore, the total of activated charcoal and charcoal is
400,000 tons, and it is estimated that shell-derived charcoal is about 500,000 tons when
including within Philippines demand. The amount coconut product is 17 million tons per
year in the Philippines, and shell is 2.89 million tons per year. In addition thereto, the
amount of additional Husks which are in the easy transportation is 430,000 tons being
equivalent to 15 percent.
The demand for activated charcoal is high in overseas, Japan has been importing it more
than 100,000 tons from China and the Philippines, and Japan has been exporting it with
reprocessed. Japanese companies are actively involved in its production in Mindanao, and
Korean companies seem active in the other area. From these phenomena, it seems that the
demand for Coconut Shell as material for activated charcoal will expand further in the
future.
The volume density is slightly small to use husk as alternate shell, it is difficult to use on its
own. However, it will become fuel with as heating value as shell by carbonizing. The ash
percentage of shell is 2-3 percent, it is lower compared to that of husk which is 4 percent,
and generating heating value is higher, because it includes the essence of Oil. That’s why
shell is suitable for material of activated charcoal.
Secondly, it is contemplated that the carbonized husk may be used as fuel for activated
charcoal making. Granexport Manufacturing Corporation in Iligan which is the biggest oil
mill in the Philippines, are building an experimental plant under the technical assistance
from Korea, for the activated charcoal. The production process for activated charcoal is,
firstly to carbonize the Shells by surplus of steams from drying copra process. Secondly, it
is imposed heating steam, and it becomes activated charcoal. It is possible to produce
activated charcoal with husk instead of shell.
It is possible to generate electricity for night-time lighting level by carbonized coconut husk
which is produced by coconut farm in their yard.
Gasification furnace
Gas engine
Fig 2-7 rice husk gasification and 20kW power generator in Nueva Ecija
The moisture ratio of copra which is soon after harvested is more than 60%, but it will be
become less than 16% at the time of selling to oil mill, and it can so sell at a high price as to
be less the moisture ratio. 8% copra was 177PP/kg on standard price. In case of drying
copra on a farm, it is used for sun drying method. Then, in the rainy season, it may be used
for flat bed dryer whose heat source is used for husk. The amount of husk which is used is
about 40% of the total, and the remaining 60% is disposed. In this project, husk which will
be disposed is used for material of carbide. (Drying copra is in the workplace where
farmer pick up copra. Therefore, husk which is not used for drying copra is disposed
(abandoned) in the workplace. When carbonizing husk, it is handled not only picking up
copra but also mincing as preprocessing of carbonizing and packing. It is possible to cut
down preprocessing operation.)
As observed above, it is possible to make efficient use of husk charcoal as heat source for
drying, for steam generation or fuel for gasification power generation other than cokes
alternate which is supposed in this survey. Especially, it is considered for effective
measure which is husk charcoal as gasification power generation when farmer generates
electricity on their own. There are many demonstration plants for similar biomass
gasification power generation.
Shell
Husk
Fig 2-8 flat bed type dryer for Copra and Coconut husk, shell as fuel
The manufacturing process for Biomass-cokes and Charcoal are the same, but each fixed
carbon contents are different. If the carbonization time became lengthen and reduce volatile
materials, the amount of carbon per unit weight will increase. Through the process control of
heat and time, fixed carbon content within the products can be controlled as shown in the
following figure. And coking can be solved within unique technology. For example,
bincho charcoal is perfect cokes.
hour
20 density
Y%
Hearing value max.
% Y Temp
vinegar
tar
gas
T emp
Husk is very brittle. Therefore, the shape of husk charcoal is not fixed. And it is
preferable from the point of view of heat transfer that carbonizing after cutting and the shape
is fixed finely because husk has much coir and dust (For example, cut in piece). It can be
fixed finely by a crusher or manually in the pretreatment process.
Besides, if the moisture of ratio of husk is higher than 30 percent of nature limit, it is
preferable to dry it by sun-drying method in advance, because it reduces required heat values
at the following drying processes. Meanwhile, sometimes dry it by the heat generated by
the fires made at flat bed dryer forcibly as shown in the figure 2.7. In this case, it is used
dried husk for heat source.
There are two different types of carbonizing systems; the Batching Systems for smaller
(medium) scale and the Continuous Systems for larger scale. And there are two types of
heating method; Self heating type carbonizer and Outer heating type carbonizer.
Garden carbonizing is small scale batch self heating type carbonizer. Figure 3.3 is the
illustration of rice husk carbonizing in the yard. As indicated by this figure, rice husk is
crushed (the left figure), carbonized (the central figure). Husk also can be carbonized by
the same scheme. It is difficult to produce cokes by carbonizing in the yard.
Fig 3-3 garden carbonizing for rice husk in Philippine - small scale batch type -
Figure 3.4 is a case of medium scale carbonizing in the yard of eucalyptus chips, it is
carbonized for three or four days by earthen furnace. In general, about medium scale batch
carbonizing, charcoal makers often have a few earthen furnaces. In this method, it is
suitable for coking because we can adjust the fixed carbon content by carbonizing time.
Fig 3-4 middle scale batch type garden carbonization for Eucalyptus in Thai land
Below is a chart that example of large scale continuous. It is, as shown on figure 3.5,
biomass is put into carbonizing furnace continuously by screw conveyer or like that. It is
the structure that thrown biomass is moving in the furnace with agitating, and it is being
carbonized during moving. Moreover, self heating type carbonizer is the method that the
volatile matter occurs to become combustible gas, and it is burned, then providing heat
necessary to carbonize. In addition, charcoal is put out continuously by screw conveyer or
like that, and finally, it is cooled to become product by cooling water.
The combusted combustible gas when it is carbonized become waste gas and it is emitted
from smokestack, the temperature is more than 800 degrees at that time. The next figure
3-6 is the flow chart of facility which combined waste heat recovery boiler and steam
turbine generator with carbonizer.
Flow Chart
Chimney
Wood factory
Electric
Power
Waste Heat
Boiler
wood
Storage Turbine
Generator
Carbonizer
Charcoal
Extinguisher Charcoal
Storage
Fig 3-6 Large scale continuous type carbonization furnace with self heating
Figure 3-7 shows the inner structure of carbonizer. In addition, it is essential that a filter for
pollution control or like shall be installed. The location of the Scrubber for internal heating
type carbonization furnace can be seen in fig.3-7.
Source: Kyoritu
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of Bio-Cokes and Programmatic CDM Project
in the Philippines, March 2010, ECFA
Study Report Chapter 3 Profile of Biomass-based Cokes Production Project
Concerning the yield of coke charcoal, self heating type carbonizer is 18 percent, and outer
heating type carbonizer is 25 percent. Self heating type carbonizer is suitable for
developing countries because the structure is simple, and therefore, in this Study, preference
is given to the self heating type carbonizing systems.
3.2 Integration of the Production Systems to the Existing Coconut Oil Mill
Systems
3.2.1 Oil mill process and heat flow in large scale oil mill factory
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.
Copra Storage
House
Cook to
soften copra
Oil Mill
Expeller
Filter
Biomass boiler
T ank Cake
The steam that was generated by biomass boiler is sent to copra warming device which
called cooker. Copra in cooker is warmed to 110 degrees for 2 hours. The oil leak out of
copra, and copra is transferred to oil mill. The oil which is squeezed out by oil mill is
filtered and stored in the tank. The steam which used in the warming device is sent to
copra drying device through oil mill.
The moisture content of the Copra which purchased is about 16 percent, but it is dried until
about 8 percent before being processed at the Oil Mill. Besides, shell is used for drying
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Study Report Chapter 3 Profile of Biomass-based Cokes Production Project
husk incrementally.
In Granexport Manufacturing Corporation in Iligan which is the biggest oil mill in the
Philippines (the processing capacity is more than 800 tons per one (1) day, and the operation
rate is less than 50 percent), about 1.1 bar steam is produced by biomass combustion boiler,
and copra is warmed by this steam. Furthermore, in this mill, it is planned to use for
activated carbon production by heating steam. In addition, it is planned to use as warming
copra and heat source for activated carbon production, and also recovering steam which is
carbonized surplus waste heat when setting carbonizer.
3.2.2 Oil mill process and heat flow in small scale oil mill factory
In the oil mill factory in Gumaca City, which has the 100t-copra/day and usage rate 50%
furnace, wood from forest near the factory is used as fuel for drying. Heat for drying is
send along blower air by compressor.
5 min.
Warming furnace of copra Cutting
5 min.
5 min.
5 min. Conditioning
M illing oil screw
5 min. press
Copra
Hot air
CCO
In this factory, moisture contents of Copra is varied from 0% to 16%, the purchase price of
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of Bio-Cokes and Programmatic CDM Project
in the Philippines, March 2010, ECFA
Study Report Chapter 3 Profile of Biomass-based Cokes Production Project
the Copra is settled on the basis of 8% moisture contents. The moisture contents of the
Copra will be decreased thru three steps up to 2% before they will be put on the oil mill
process. Thus, in the oil mill factory, Shell, Charcoal, Wood or Surplus biomass are fully
used as heating sources for warming or drying Copra.
Under this Study, it is proposed that a Carbonization Plant shall be installed within the oil
mill factory, and exhaust heat from the Plant shall be recovered as heat source for Copra
drying and other processing. Besides, the Coconut Oil Mill could decrease the consumption
of Fossil Oils used for heat source.
The figure 3-10 shows the husk treatment process and heat flow of the carbonization plant
installed in a Coconut Oil Mill.
CDM(1)
(1) CDM(2)
(2)
*Husk
Copra
Steam boiler
Cooking
Collection
Dilution Copra Reduction
Drying materials
Drying
Pelletizer
Grinder
Packing Bio-cokes
replacedfr
Fig 3-10 Flow chart of the proposed coconuts husk derived cokes production and GHG capturing
system
It is said that 70% of Coconut farm may belong to the small scale farm. So, Husk is
generated and distributed in small scale way. The proposed husk distribution and
carbonization process are as below.
①$?
②$?
Drying
乾燥
Carbonizing
炭化
Pelletizing
ペレット化
④$?
Steel plant
製鉄所
Fig 3-11 Coconut husk carbonization process in farmer and oil mill factory
As shown in Fig 3-11, husk is pre-dried in each barangay and collected to joint depot. The
husk is dried up to about 20%-moisture and is chopped into 12 pieces such like dice or is
crushed by hand or cutter to be packed. After this, husk is carried to installation and
carbonized. The detailed supply chain on the Husk is discussed in Chapter 3.4 hereinafter.
Exhaust heat at carbonization can be exchanged to supply to Copra warming process in oil
mill process. Heat for carbonization is not need to be supply because of internal heating
type furnace. Cokes is crushed to control the grain just before being used at the Steel
Smelting Plant or may be pelletized on request by the manufacturer of the Biomass-cokes.
The data which Husk, fiber and Coir-dust is individually carbonized, heating value of fiber
was 7,200kcal/kg, Coir-dust 6,500kcal/kg. The yield of fiber at carbonization was 16%,
Coir-dust was 23%, therefore the heating value of husk cokes by weighted average will be
6,700kcal/kg (= 28MJ/kg). This value is comparable to that of cokes originated from the
cooking coal (7,200kcal/kg). Fixed carbon of the husk cokes may be about 70%, but this is
not satisfied to requirement value (85% or more). Therefore, husk cokes will be needed to be
increased by means of ingenuity on carbonization technology such like high temperature
carbonization.
Some samples of husk cokes were measured, and the heating value was 6,900kcal/kg. This
sample has been already pelletized.
In this report, the capacity of the Coconut oil mill factory is shown by amount of dried
Copra with 16% moisture treated per day.
It can be easily understood that the capacity of carbonization furnace is corresponded with
processing amount of Copra, so it can be calculated the capacity of the carbonization furnace
on the basis of dried Copra 100t with 16% moisture, that is, 100t-copra/day processing
factory.
Firstly, calculation for the amount of Coconut demanded for dried Copra (moisture 16%)
100t. 100t-Copra with 16% moisture may be equivalent to 154t with 45% moisture and
Husk 188t (=413/188), as above table 2-5. The weight of Coconut except Juice occupies
88.2 wt-% of Coconut, so 388t-Coconut, for simplicity, 400t-Coconut may be demanded.
As section 2.5.3, 40 wt-% of the Husk would be used as fuel for the drying. More than
100t-Husk out of 188t-Husk can be used for carbonization. For simplicity, it can be
assumed that 100t-Husk can be used.
Husk with 45% moisture can be converted to 12t-cokes, where weight of Husk with 20%
moisture is 68t-Husk, yield of the carbonized Husk is 23wt-%, cokes conversion factor is
0.824 (=0.7/0.85).
Heating value for the drying 100t Copra from 16% moisture to 8% is about 43.5GJ, where
water evaporation heating value is 5GJ/t. On the other hand, the heating value for carbonized
Husk 68t is about 350GJ because of 12t-cokes equivalent to 68t-Husk with 20% moisture,
where the Lower Heating Value (LHV) of the dried Husk is 10MJ/kg, cokes is
28MJ/kg-cokes. Therefore the exhaust heat can cover heat for drying Copra by means of
rough calculation.
It is concluded that 400t-Coconut with 45% moisture produces 100t-Copra with 16%
moisture which equivalent to 154t-Copra with 45% moisture, and 188t-Husk with 45%.
basis of calculation
In the Northern Coast of Mindanao and Southern Tagalog, the processing amount of scrap
steel of Treasure Steel Corporation in Illigan City is 300,000t/year, needs of the cokes may
be 7,500t/year, as 25kg/t-scrap. Assuming the mixed combustion rate be 50% in the
electrical furnace, Treasure Steel Corporation demands 4,000t-cokes. As above calculation,
100t-Copra/day processing oil mill factory can supply the husk cokes (4,380t/year = 12t/day
×365day/year) almost equivalent to the Treasure Steel Corporation’s demands (4,000t/year).
Fruits yields for Treasure Steel Corporation’s demands may be about 0.14Mt/year, as
400t/year×345day/year. The total amount of Coconuts production in this area may be about
1.6Mt/year. Assuming that 15% of the total amount of Coconuts plantation area may be in
good location such like along the paved road, 0.24Mt-Coconuts/year (=1.6Mt/year×15%)
can be easily collected to supply. This can be considered to cover the demands of Treasure
Steel Corporation even if the utilization of plantation would be decreased.
The processing capacity of copra in Granexport Mfg which is the largest oil mill factory in
the Philippine, stand on near Treasure Steel Corporation factory, may be 800t-Copra with
16% moisture per day. If the utilization of installation may be about 50%, the production
amount may be 400t-Copra/day. 100t/day Husk with 45% moisture which may be
corresponding to 100t/day Copra with 16% moisture may be carbonized, so 4,380t/day Husk
cokes can be supplied to cover the demands of Treasure Steel Corporation.
Granexport Mfg’s official processing amount is 800t-Copra/day. This may assume that
Coconut may be collected from not only along the paved roads but forest and rural area.
It is assumed that the middle man or the Copra trading shop may be effectively functioned.
Steel Asia is located in Calaca District of Batangas Province in the Caabarzon and has the
0.3Mt/ Steel processing capacity. This factory’s demands of cokes may be 7,500t-cokes/day
by means of similarly calculation to the case of Treasure Steel Corporation because of same
scale. As noted above, the demand of pulverized coal may be 4,200t/year for fuel, therefore
this may means that the demands of cokes may be 11,700t/year. If the mixed combustion
rate in the furnace would be 50%, the demand may be 6,000t-cokes/year.
In this area, oil mill factories are located at around Gumaca and Province of Batangas, where
is our study area, and the scale of the processing amount may be almost small like that
100t-Copra/day which means smaller company.
As above calculation, the 100t-Copra/day processing capacity oil mill factory can supply
4,380t-cokes/year, supply amount of 6,000t-cokes/year for Steel Asia means that the 1.5
times (150t-Copra/day) processing capacity, that is, 0.21Mt-Coconut/year will have to be
demanded.
In this area, total amount of Coconut production may be about 1.2Mt/year. Coconut from
only good located plantation such like along the paved roads may be assumed to be
0.6Mt/year which is corresponding to 50% of the total amount; 1.2Mt/year. This is the
reason why there is many appropriate area to transportation like along the paved roads more
than that of Mindanao, 50% of the plantation may be located in appropriate condition to the
transportation.
Goldex oil mill factory of Gumaca in Province of Quezon is midsize company whose
processing amount may be 100t-Copra/day. There are many oil mill factories like this
class in Provinces of Batangas/Quezon. It is required to note that the operation ratio of
these factories is 50% recently.
If the operating time of installation in the oil mill factory would be 24hours, capacity of the
carbonization furnace per day be 1t-Husk (with 20% moisture)/h, product amount of cokes
be 0.18t-cokes/h, so 4.3t-cokes/day would be produced. Three set will be need for
68t-Husk/day.
In the oil mill factory whose capacity is 100t-Copra(16% moisture), three set of the
carbonization system can be installed to produce the 4,470t-cokes/year (=3×0.18/h×
24h/day×345day/year). Besides, it is suggested that oil mill capacity’s factory can be
installed 4 set (3+1-spare) of the carbonization system to produce 4,000t-cokes/year, where
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in the Philippines, March 2010, ECFA
Study Report Chapter 3 Profile of Biomass-based Cokes Production Project
88 tons of husk is dried to 30 percent by sunshine, and the other 100 tons of husk is
for dryer fuel in order to dry to 20 percent moisture for carbonizing, or use as heat
source of dryer as usual. 100 tons of husk is to 68 tons.
Fruit 400 t/d of specific
consumption
Install 4 carbonizing furnaces of 20t/d in oil mill which can handle 100t
Oil mill
Cutting Cokes 2,800t/y
Farm
place Carbonizing Pelletizing
Farm
Oil mill
Farm Cutting
place Carbonizing Pelletizing
Farm
Oil mill size = handling copra 100t/d
- Coal-cokes unit price at ex-factory from China is fixed carbon 80%:12P/kg, 85%:14P/kg
- Husk : 1.5P/kg,
- Husk as sliced Husk package 50kg with 20% moisture : 5-5.5P/kg at ex-factory
- Cokes from China : 19~20P/kg at 2008 (buying price is lower than this in fact, but the
price cannot be released)
As above,
- Shell : 10P/kg,
- Husk : 5-5.5P/kg,
Quality of Husk would be equivalent to coking cokes and shell-cokes, and the Husk cokes
unit price would be lower than that of them, The market of Husk-cokes would be expand. In
this case, the Husk-cokes unit price would be 13P/kg-18P/kg. In this Study, it is assumed
that the Husk cokes selling price unit is 18P/kg.
As table 3-2, initial cost may be 300MJPY, depreciation be MJPY during 15years. The total
amount of row Husk (20%moisture) is 23,460t-Husk/year. Depreciation cost per Husk 1kg
may be 0.85JPY/kg, corresponding to 0.43PP/kg-Hsuk (20%moisture) as 1PP=2JPY
68t-Husk (20%moisture) per day can be transported by two 8t capacity truck, 5 round-trip
where round trip distance may be 40km. However, truck cost would not be included.
Total round trip distance will be 400km/day for 68t-Husk (20% moisture). Fuel cost of
transportation may be 15,000PP, equal to 30,000JPY, where mileage may be 8km per 1L
diesel, diesel unit price be 300PP/L. If the mileage would be 35PP/km including car
depreciation, the cost would be 15,000PP/two-car by round up (1,4000PP=35PP/km×
400km). The other expenses like driver, drying, load and unload, equipment may be
30,000PP, so the total transportation cost may be 60,000PP. Therefore, the transportation
cost may be 1.3PP/kg-Husk (20% moisture).
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in the Philippines, March 2010, ECFA
Study Report Chapter 3 Profile of Biomass-based Cokes Production Project
The amount of worker may be needed 10 person, where 1.5 person for cutter, 1.5 person for
pelletizer 1.5 person for grinder and 4 persons for carbonization furnace. However, the
operating time may be 24hours, so the three rotation member can be needed. Consequentaly,
total amount of the worker may be 30 persons and work’s cost may be 30,000PP/day/man,
where worker’s cost may be 1,000PP/man/day, that is, 0.44PP/kg-Husk.
As from (a) to (d), total cost per husk weight may be 4.17PP/kg. Besides, this unit price will
have to be converted to unit price per Husk cokes, at all Husk cokes unit price is 23.6PP/kg
because of 18% cokes yield. And management cost rate would be 10% of total cost, so
Husk-cokes unit price would be 26.3PP/kg-Husk-cokes, by where 21PP/kg is divided by 0.9.
Ex-factory price unit in Electric furnace plant is assumed 18PP/kg. If the Coconut purchase
price would be free, this project could be profitable. However, if the price of Coconut
would not be free, this project could be profitable as CDM project.
3.2.10 Checking of the heat balance system of carbonization for IRR calculation
In previous chapter, the resources of coconuts fruits for carbonization based on the daily
copra squeezing performance of the oil mills are discussed. For a Coconut Oil Mill which
can process 100t/day of dried copra, the amount of fresh fruits are calculated and after that
the dried husks for carbonization from the fruits are counted.
1 According to the survey results made by the Study Team, 5pp per 1kg for the Husk was calculated, however
this estimation was not fully supported by accurate evidence and with this reason, the Study Team adopted 2pp/kg
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Study Report Chapter 3 Profile of Biomass-based Cokes Production Project
For the purpose of IRR calculation, it is better to use the carbonization performance of
dried husks instead of squeezing performance of copra of oil mills. Installation and
equipments are suggested as follow. The running time of the Carbonization Plant per year
are extended to reduce the investment.
Exhaust gas
12,305 m3N/h at 200℃
saturated steam
Steam header 5.0t/h at 0.8MPa Exhaust gas
in oil mill factory
boiler
Hopper
Bio-cokes 4t/day/unit
with 17% yield
Bio-cokes 12t/day
1) Capital investment for husk carbonization for Granexport Mfg at Iligan city
Table 3-3 Specification of main facilities and capital investment for big scale O/M
Husk cutter
Cottage works of the coconuts farmers Man power 0JPY
(in barangay)
Husk process capacity 1t/h/unit Installation
Carbonizer
including electricity transmission 3units+1stand-by 180,000,000JPY
(in oil mill factory)
; 45,000,000JPY/unit*4units
500kg/h/unit; 3,000,000JPY/unit
Grinder (with sieve) ×2units+electricity transmission/unit;
2units+1stand-by 10,000,000JPY
(in oil mill factory) 1,000,000JPY/unit
Total 10,000,000JPY
Pelletizer 200kg/h/unit; 4,000,000JPY/unit ×5units +
4units+1stand-by 22,000,000JPY
(in oil mill factory) electricity transmission; 2,000,000JPY
Adjust moisture contents below 20% at
Husk dryer barangay before ship to oil mill. Capacity of 4,000,000JPY
Flat bed typ
(in barangay) drying husk: 1t/h/unit (max.)
Installations: up to village situation
Boiler and scrubber Evaporation capacity 5t/h - 24,000,000JPY
Installation works - - 50,000,000JPY
Reserve fund - - 10,000,000JPY
Total 300,000,000JPY
2) Capital investment for husk carbonization for Goldex Oil Mill Gumaca city
Table 3-4 Specification of main facilities and capital investment for small scale O/M
Husk cutter
Cottage works of the coconuts farmers Man power 0JPY
(in barangay)
Carbonizer Self heating system: Husk process capacity 1t/h
1unit 45,000,000JPY
(in oil mill factory) Installation 1units; 45,000,000JPY/unit
Grinder (with sieve) 500kg/h; 3,000,000JPY/unit×1unit
1unit 4,000,000JPY
(in oil mill factory) + electricity transmission 1,000,000JPY
Pelletizer 200kg/h; 4,000,000JPY/unit×2units
2units 10,000,000JPY
(in oil mill factory) +electricity transmission 2,000,000JPY
Adjust moisture contents below 20% at village
Husk dryer 1,000,000JPY
before ship to oil mill. Capacity of drying husk: 1t/h Flat bed typ
(in barangay) (max.)
Installations: up to village situation
Installation and reserve
- - 10,000,000JPY
fund
Total 70,000,000JPY
In this section, the possibility of air pollution from the smoke at carbonization and damage
from salt fertilization are to be discussed.
It has been asked to monitor the exhaust smoke for three sets of rice-husk carbonization
furnace which was installed in farmer at Luzon by one of the Japanese Plant Manufacturers.
According to above guideline, it has been consequently designated without detail data about
smoke monitoring. It is in need to study environmental regulations before installation of the
Carbonization Plant2. As shown in the promotion paper issued by PCA, some Chlorine may
be included in such part of Coconut as Shell, but not in Husk, according to a preliminary
analysis conducted by the Study Team in Japan.
Source: Coconut Statistic 2007, United Coconut Association of the Philippines, Inc figure in P12
Material Supply plays very important roles in most industrialization projects that processes
the raw materials derived from primary industries such as Agricultural, Forestry and Fishery.
2
Ten or more set of carbonization furnace is located.
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Study Report Chapter 3 Profile of Biomass-based Cokes Production Project
The production of those raw materials is heavily influenced by Climatic Conditions, Quality
Control after the harvest, Logistic Systems from the growing fields to the processing plants.
Consistent supply of Quality Raw Materials has been always the issue for such industries
that processing Agricultural Products and/or By-products.
In case of the Coconut Processing Industry in the Philippines, there is various players;
Owners of Coconut Plantation, Coconut Growers, Middlemen dealing a business on the
Products/By-products, Coconut Oil Mills, Coconut Oil Refinery and Processing Plants for
the final Products. There is well-established supply chain since long for the Copra, the major
product of Coconut.
In the process of Copra Supply to the Coconut Mills, Middlemen have been played very
important roles between the Growers and the Mills. Meantime, function of the Middlemen is
not only to provide Logistic Services in/between, but also to provide financial support to the
Coconut Growers. On the other hand, the Growers also try to form a Cooperative to protect
their interests as the Coconut Growers. This movement was initiated since 1990 by the
Cooperative Development Authority (CDA), a public entity under Office of the President.
However, the endeavor of this initiative is yet to be fully achieved in various sectors
including the Coconut Growers. It is said that one of the most critical capabilities that
Coconut Grower’s Cooperatives are in need in operating the Cooperative is the proven
capability in the fields of Marketing.
Considering the present situation in the Logistic Value Chain in the Coconut Industry, it is
recommendable to use the existing Logistic Value Chain; use of the Middlemen, in order to
avoid unnecessary trouble which might come arisen by changing the existing Logistic
Systems. The proposed Logistic Value Chain may be illustrated as under.
Players
Harvest
Removal Carbonization
Transport Sale of Bio-cokes
of Husk Processes
Process
Heat Exchange
Chopping
from Exaust Gas
Generation
Sun-dried
of Steam
Packed in
Plastic Bag
According to this plan, the Grower will be involved in the processes of Harvesting, Removal
of Husk, Chopping, Sun-dry and Packing into a Plastic Bag. These processes bring an
additional earning to the Coconut Grower. After the packing the Husk into a plastic bag, the
Husk will be transported by truck arranged by the Middleman to the Coconut Mill where a
Carbonization Plant is located. Chopping of the Husk into approximately 10 cm rectangular
shape shall be done manually by the Coconut Grower. It is said that water content of the
fresh Coconut is approximately 40 percent, while the sun-dried Husk is approximately 18
percent. With 40 percent water content of Coconut Husk, manual chopping is more practical
rather than the mechanical chopping which requires capital outlay and higher operation cost.
Whereas the proposed Logistic Value Chain is adopted from the shorter-time perspective,
while the longer-term perspective for the Logistic Value Chain is “Direct Dealing” between
the Coconut Grower Cooperative and the Coconut Mill. This system has advantages that the
entire logistic costs may be reduced further with shorter logistic chain and less number of
the players on the chain, and there will be stable Husk supply agreement for rather longer
time of period between the Cooperative and the Coconut Mill. However, realization of this
type of Husk supply agreement requires longer preparatory period to mature the systems and
it will be risky to apply this “Direct Dealing” systems immediately for the proposed
Bio-cokes Production venture now.
Philippine Coconut Authority (PCA) is the public body solely responsible for the
administration of Coconut Industry in the Philippines. PCA is expected to be functioned as
the sole window agency for the implementation of the proposed Bio-cokes Production
Project responsible for the coordination and management for PoA application as well as
implementation of the Project in close coordination with Development Bank of the
Philippines (DBP).
In the meantime, this Project shall be initiated by the private sector of the Philippines, in
particular by the Coconut Industry, the Iron & Steel Industry and Metal Casting Industry.
These players, in particular the Coconut Mills, perform very important roles in realizing the
proposed scheme. This Chapter describes the Organizational Structures in both Public and
Private sectors for the implementation of this Project, and functions of each player.
There are two major Organizations to be involved in implementing the proposed Bio-cokes
Production Project in the Public Sector, namely; Philippines Coconut Authority (PCA) and
the Development Bank of the Philippines (DBP).
PCA, being the sole window agency for the implementation, is expected to take leading
roles to plan, promote, monitor, and manage the Project along with the PDCA Cycle. PCA,
through its Research, Development and Extension Branch, shall promote this concept to
both of Coconut Mills and Coconut Growers and extend necessary technical and managerial
supports to those potential investors. They are requested to conduct such services in close
coordination with DBP who is the provider of the funds required for initial investments and
a part of the operational costs.
They are also requested to function as the Coordinating and Managing Entity (CME) in
applying for a Certified Emission Reduction (CER) to the United Nation Framework
Convention on Climate Change (UNFCCC), since the revenue from the Sale of CER
constitutes considerable extent in the viability of this scheme. According to the statistics
issued by the Philippines Coconut Planters Association, there are 64 Coconut Mills
throughout the entire Philippines as of year 2007.
Since this Project shall be implemented in parallel and simultaneously by several numbers of
investors; mostly from those 64 Coconut Mills, PCA shall monitor and manage activities of
each Sub-project. Under the concept of PoA (Programme of Activities), these Sub-projects
are called as a CPA (CDM Programme of Activity). In order to monitor and manage this
rather complicated series of activity, it is recommended to employ a Project Management
Team in order to provide technical and managerial support services to those PoA. This
Project Management Team shall be attached either to PCA or DBP and performs in close
coordination with both agencies. The following figure illustrates the setting of the
Organizational Structure at the institutional level.
National Economic
Development Authority
(NEDA)
As stated earlier, implementation of this Project shall be initiated by the players in the
Private Sector. Among others, the Coconut Mill is expected to be the top notch in the
investor’s list. The Coconut Mill is an ideal place where the benefits of synergy effect that
may be achieved by cyclonite the Milling Processes of Copra and the Carbonization of Husk
at one place, because the Mill is fully equipped with Power and Water Supplies, Access
Road and Shipping Pier, Human Resources, Administration Systems and other
infrastructures.
However, accounting systems for Coconut Milling and Bio-cokes Production shall be
strictly separated, due to different purpose of the venture. New venture may be implemented
either by the same stakeholders of the Mill or partly different composition of the existing
stakeholders and new comers. In both cases, they shall form a Special Purpose Company
(SPC) for the production of Bio-cokes Production and operate the said SPC under separate
business strategy and accounting systems from the Milling Operations, in order to maintain
the transparency of its operations. All the revenues and expenditures attributable to the
operations shall be accumulated under the account of SPC and the borrowing and repayment
are also the same manner too. The SPC will enter into a Medium-term Agreement with the
Middlemen and/or Coconut Growers Cooperatives for supply of Coconut Husk, and Sales
Agreement for the Bio-cokes with Iron and Steel Industry, which are essential to draw a loan
from DBP.
Project
Philippine Coconut Coordinating &
Management
Authority (PCA) Managing Entity (CME)
Team
JICA
Development Bank of National Commission
Two-step
the Philippines (DBP) for CDM (DENR)
Loan
Mid-term
Special Purpose
Husk Supply UNFCCC
Company (SPC)
Agreement
Mid-term Bio-cokes
Sales Agreement
So, it is explained about PoA definition and outline in Section 4.1, and proposed applicable
PoA scheme in Section 4.2 together with the recommended Structure for the
implementation.
There is several basic key words governing the core activities under the PoA, and they will
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Study Report Chapter 4 Applicability as a Validated Programmatic CDM (PoA) Project
be summarized as follows.
The Implementation body of PoA, roles and function of which are summarized as:
A PoA shall be proposed by the coordinating or managing entity which shall be a Project
Participants (PP) authorized by all participating host country DNA involved and identified in
the modalities of communication as the entity which communicates with the CDM EB,
including on matters relating to the distribution of CERs.
Project Participants of the PoA shall make arrangements with the coordinator or managing
entity, relating to communications, distribution of CERs and change of Project Participants.
The physical boundary of a PoA may extend to more than one country provided that each
participating non-annex I host Party provides confirmation that the PoA, and thereby all
CPAs, assists it in achieving sustainable development.
All CPAs of a PoA shall apply the same Approved Methodology (AM), The PoA shall
demonstrate that GHG reductions or net removals by sinks for each CPA under the PoA are
real and measurable, are an accurate reflection of what has occurred within the project
boundary, and are uniquely attributable to the PoA.
The PoA shall therefore define at registration, the type of information which is to be
provided for each CPA to ensure that leakage, additionality, establishment of the baseline,
baseline emissions, eligibility and double counting are unambiguously defined for each CPA
within the PoA.
If the Approved Methodology is put on hold or withdrawn, not for the purpose of inclusion
in a consolidation, no new CPAs shall be added to the PoA in accordance with the timelines
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Study Report Chapter 4 Applicability as a Validated Programmatic CDM (PoA) Project
indicated in procedures.
CPAs included prior to the methodology being put on hold, shall apply the new version of
the PoA at the time of the renewal of its crediting period.
In the case of CPAs which individually do not exceed the SSC threshold, SSC
methodologies may be used.
All CPAs shall be applicable same methodology, same technology and measure in a PoA.
PoA‘s crediting period is defined as less than 28years, and CPA’s is same as to CDM, that is,
less than 7years by 3 times, or 10years by 2 times.
With due consideration to the definitions as given herein above, the Outline of the PoA may
be illustrated as shown in the following figure.
A
A programme
programme
PoA
PoA
Coordinating/Managing
Coordinating/Managing Entity
Entity CDM-EB
CDM-EB
CPA
communication
CPA
CPA boundary
PoA boundary
The proposed production of Bio-Cokes Project may be applicable for the PoA along with the
following points, considering both the Results of Site Survey in the Project Areas and the
PoA Rules.
(1) Programme
There is some programme regarding to our PoA in Philippines, but these are not appropriate.
However, we may apply the regulations regarding to the renewable energy would be
established in the future.
(2) Boundary
It is assumed that PoA boundary can be Southern Tagalog (Calabarzon) and Northern Coast
of Mindanao. However, our PoA can be applicable to the whole Philippines, so we have to
consider the case that PoA boundary may be extended to the entire Philippine (fig.4-7).
CPA boundary which includes the Iron steel plant and installation for Bio-Cokes in oil mill
factory may be defined within each Project Site (fig.4-7).
As stated in herein above, the boundary of this Project covers Southern Tagalog
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Study Report Chapter 4 Applicability as a Validated Programmatic CDM (PoA) Project
(Calabarzon) and Northern Coast of Mindanao with the designated functions as the
Coordinating and Managing Entity (CME) by the Department of Agriculture PCA. PCA will
be at the same time functioned as the Implementation Agency of this Project
It is suggest that the Department of Agriculture Philippine Coconut Authority can be most
appropriate body for Coordinating and Managing Entity (CME), because they manage all
the Coconut farmer at present and it is further expected that they can communicate to the
other Government bodies of Indonesia, Japan and UNFCCC including the CDM EB.
Department
Department ofof Agriculture
Agriculture
Philippine
Philippine Coconut
Coconut Authority
Authority
CME
CME of
ofPoA
PoA Japanese
Japanese Government
Government
JICA
JICA
PoA boundary
PCA
PCA branch
branch
Two Step loan
drying
drying
Two Step loan
Iron
Iron Bio-Cokes
Steel
Steel carbonization
carbonization
plant
plant
peletization
peletization
Barangay
Barangay AA Barangay
Barangay BB Barangay
Barangay CC
far mer farmer farmer farmer farmer farmer farmer farmer farmer
It is assumed that all CPAs install the Bio-Cokes installation and Power Supply Systems to
local grid in villages. And it is expected that the Bio-Cokes may be applicable for AMS-
Ⅰ.A.
Under the current Programme regarding to the climate change, so many renewable energy
projects such as Biomass fuel, Solar power, Hydropower are not installed in the Philippine.
This is reason why the current Programme regarding to the climate change is not effective.
This is the PoA additionality on our project grounded by the technical barrier and financial
barrier. These barriers may be cleared by the extension of the ODA loan and advanced
technology from Japan with an additional profits from selling the CERs.
The provision of the public funding for CDM is not allowed by COP7, so this Project is not
qualified for the ODA fund directly. However, if the Project Site is located in the developed
country (including Japan) and certified that the funding is not ODA funding, the public fund
can be used for CDM without certification by host country.
Bio-Cokes plant is not imposed on in the present EIA regulation in Philippine. However, this
Project may execute spontaneous EIA when the CDM project starts.
Source: Abrief Guide for the Industry Sector and EIA Reviewers on the Reviced Procedural Manual of DAO 2003-03
Source: Abrief Guide for the Industry Sector and EIA Reviewers on the Reviced Procedural Manual of DAO 2003-03
3
http://dna-cdm.menlh.go.id/en/approval/
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Study Report Chapter 4 Applicability as a Validated Programmatic CDM (PoA) Project
Transaction fee for the national approval of CDM is as below. In our case, PoA and all CPA
can be charged.
CDM Criteria is provided in terms of Environment, Economy, Social and Technology. This
4
http://dna-cdm.menlh.go.id/en/susdev/
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Study Report Chapter 4 Applicability as a Validated Programmatic CDM (PoA) Project
Project may satisfy all the Conditions required under this clause.
According to the results of careful study, the proposed Power Generation Project is most
likely to clear these figures.
This Study intends to analyze the Economic and Financial Viability of the Proposed Project
that produces an Industrial Coke from the residue of Coconut to replace the imported Cokes
made of fossil-resources in the Philippines. There is three major revenues from this
development concept; one from the Sale of Biomass-based Cokes to those end-users as Iron
and Steel Manufacturers and Metal-casting Industry, one is the Sale of Carbon Credits
derived out of Reduction of GHGs by reduction of fossil banker oils at Coconut Oil Mill and
by replacing Fossil-resources-made Cokes with Biomass-based Cokes at the Metal
Processing Industries and one is the saving cost of the fuel being substituted by the exhaust
heat from carbonization of the husk.
The Financial Viability Analysis has been conducted based on the following pre-conditions.
・All the Plants, Equipments and other Ancillary Works shall be procured in the Republic of
Philippines, except for a few component that is required to import from outside Philippines.
For those items to be imported, it is assumed that those items shall be imported from Japan,
・Inflation factors in relation to this Capital Investment are eliminated in this analysis,
・Revenue under this Project is Selling Price of the Biomass-based Coke to Metal Processing
Industries in the Philippines, and Selling Price of the Carbon Credit which is scheduled to be
realized after One (1) year from the commencement of operation of the Biomass-cokes
Production Systems,
Capital Cost for the Project shall be based on the costs imposed by a Soft Loan to be
provided under the Official Development Assistance (ODA) program by the Government of
Japan or similar facility.
The Investment costs have been separately estimated in the Foreign and Local Currencies
based on the following exchange rates;
In the analysis of the Financial Viability on this Project, it was opted that the major part of
the Capital Expenditure will be financed by the Project Loan to be provided by the Japan
International Cooperation Agency (JICA) and the financing conditions under the Project
Loan may be summarized as follows;
Northern Coast of Mindanao covers the territories of various provinces of Surigao del Norte,
Agusan del Norte, Misamis Oriental, Lanao del Norte, Misamis Occidental and Zamboanga
del Norte. Major part of the Area is Typhoon-free and rich in Coconut vegetation. At the
same time, such core cities as Illigan and Cagayan de Oro are well industrialized, due to its
strategic location and they are rich in Energy and Agricultural Resources either within the
territory or its hinterland. Philippine Sinter Corporation and National Steel Corporation
which are two major metal processing industries in the Republic, are located in Illigan City
and nearby Cagayan de Oro City respectively. There is the largest Coconut Mill Plant in
Illigan City called Granexport Manufacturing Corporation, an affiliate of GIIF Oil Mills
Group. The GIIF Oil Mills Group is recognized as the largest Coconut Products
Manufacturer in the World. Meantime, an arm of National Steel Corporation has been
curved out as a private entity called Treasure Steel Corporation and they are involved
actively in the Steel Production in their plant in Illigan City. Study Team has identified these
two Corporations as a suitable venue for conducting the proposed Preliminary Feasibility
Study as the second Case Study, since they are performing well as one for the production of
Biomass-based Cokes and the other for the end-user of the said products.
The Capital Expenditures required for the development of this Project have been estimated
referring the above table 3-2.
(1) There should be three major Revenues derived from this Project;
a) Sale of Biomass-based Cokes being produced under this Project, to Metal Processing
Industry who uses Electric Furnace, Selling Price of the Biomass-based Cokes is set as
Philippine Peso 18.00 per kg. For the purpose of calculation and analysis of this Study,
b) Sale of CER on GHGs at Coconut Oil Mill being certified by the UNFCCC.
c) Saving cost of the kerosene being substituted by the exhaust gas heat from carbonization
of the husk.
The total project costs for the Project in Calabarzon Area are broken down in the above
table3-4.
Under this study, the Financial Viability of the Project was evaluated on the basis of the
Revenue and Cost derived from the Project for 15 years since its commencement of the
Operation, applying the method of Financial Internal Rate of Return (FIRR). In the
evaluation of the Financial Viability, results of FIRR shall be compared with the opportunity
cost which may arise from the Capital Cost to be applied for this Project.
In-flow of Cash under this Project consists of (a) Equity and Borrowings for the Initial
Investment, (b) Sale of Biomass-based Cokes, (c) Sale of Carbon Credit derived by saving
from the Fuel and Operational Costs at the existing Coconut Oil Mill in Illigan City, Lanao
del Norte Province.
Among the total costs required for the development of the such Capital Outlays as
Carbonization Plants, Heat Exchanger, Bug Filter and other Ancillary Equipments, Civil
Works and Operational Costs in it first year, it was assumed that Ten (10) percent of the total
sums may be paid up by the Owner of Granexport Manufacturing Corporation to a Special
Purpose Company to be established for this Project as the Equity, and the rest of the Capital
Expenditures shall be covered by the Two-step Loan to be provided by JICA through the
Development Bank of the Philippines. Anticipated Capital Cost for discounting the revenues
may be summarized as follows;
Weighted Average Cost of Capital (WACC) is calculated as 1.51% per year, based on the
For the calculation of Sale of Biomass-based Cokes, Unit Rate of 18.0 Philippine Peso or 36
Japanese Yen per Kilogram shall be applied according to the Market Price of imported
Fossil-resource-based Cokes from China.
For the calculation of Sale of Carbon Credit, Unit Rate of Japanese Yen 3,000 per one CO2
ton shall be applied.
The Construction Costs for this Project were shown in the Table3-3, and these expenses shall
be paid out within one year from the commencement of the Project.
The O&M Costs for this Project was projected as labor cost which is estimated by 1,000
Philippine Peso per operator with 24hours-3rotation.
Such Major Initial Investment Costs as the Carbonization Plant, Heat Exchanger, Bug Filter
and Auxiliary Equipments shall be depreciated up to Ninety (90) percent of its costs at the
equal amount every year within 15 years time.
(g) Taxes
Any Tax applicable in Philippine for the procurement of Engineering Services, Construction
of the Building, Installation of Plants and Equipments and other activities shall be inclusive
of the costs estimated in each pay items, and the Income Tax derived from this Project is
deemed to be Thirty four percent on the Incomes before Tax.
The results of the Financial Feasibility for this Case Study at the Financial Internal Rate of
Return on the incomes before Taxes, are summarized as follows. In this case, the Project is
financially viable at the given conditions as stated hereinbefore.
The detailed breakdown of Financial Internal Rate of Return, Payment Schedule and Cash
Flow Statement are shown in the Appendix 1.
The Calabarzon Area is located adjacent to Metro Manila National Capital Region (NCR)
and covers the Provinces of Cavite, Rizal, Batangas, Laguna, and Quezon. The Calabarzon
Area is one of the emerging centers in the Industrialization Activities in the Republic and
large numbers of Industrial Processing Entity are located. Iron and Steel Industry and
Metal-casting Industry are the two of the Industry that uses Cokes for their metal processing.
Meantime, the Area is rich in Coconut Resources as well in particular in the Provinces of
Laguna, Batangas, and Quezon. It is therefore considered that the Area is suitable to conduct
the proposed Preliminary Feasibility Study.
Study Team has identified, through the recommendation of the Philippine Coconut Authority,
one Coconut Mill in Gumaca City, Quezon Province as a Case Study for the Preliminary
Feasibility Study so as that this Case Study can be applied for another case in the investment
in the Calabarzon Area as a generalized model. In the course of the analysis, more emphasis
has been given to the analysis of Financial Viability considering the nature of the Project that
shall be developed with the facility of a Project Finance.
The Capital Expenditures required for the development of this Project have been estimated
along with the above table 3-2.
(1) There should be three major Revenues derived from this Project;
a) Sale of Biomass-based Cokes being produced under this Project, to Metal Processing
Industry who uses Electric Furnace, Selling Price of the Biomass-based Cokes is set as
Philippine Peso 19.00 per kg.
b) Sale of CER on GHGs at Coconut Oil Mill being certified by the UNFCCC.
c) Saving cost of the waste timber being substituted by the exhaust gas heat from
carbonization of the husk.
The total project costs for the Project in Calabarzon Area are broken down in the above
table3-3.
Under this study, the Financial Viability of the Project was evaluated on the basis of the
Revenue and Cost derived from the Project for 15 years since its commencement of the
Operation, applying the method of Financial Internal Rate of Return (FIRR). In the
evaluation of the Financial Viability, results of FIRR shall be compared with the opportunity
cost which may arise from the Capital Cost to be applied for this Project.
In-flow of Cash under this Project consists of (a) Equity and Borrowings for the Initial
Investment, (b) Sale of Biomass-based Cokes, (c) Sale of Carbon Credit derived by saving
from the Fuel and Operational Costs at the existing Coconut Oil Mill in Gumaca City,
Quezon Province.
Among the total costs required for the development of the such Capital Outlays as
Carbonization Plants, Heat Exchanger, Bug Filter and other Ancillary Equipments, Civil
Works and Operational Costs in it first year, it was assumed that Ten (10) percent of the total
sums may be paid up by the Owner of Goldex Oil Mill Corporation to a Special Purpose
Company to be established for this Project as the Equity, and the rest of the Capital
Expenditures shall be covered by the Two-step Loan to be provided by JICA through the
Development Bank of the Philippines. Anticipated Capital Cost for discounting the revenues
may be summarized as follows;
Weighted Average Cost of Capital (WACC) is calculated as 1.51% per year, based on the
Composition of the Loans and Equity as stated hereinabove.
For the calculation of Sale of Biomass-based Cokes, Unit Rate of 19.0 Philippine Peso or 38
Japanese Yen per Kilogram shall be applied according to the Market Price of imported
Fossil-resource-based Cokes from China.
For the calculation of Sale of Carbon Credit, Unit Rate of Japanese Yen 9,000 per one CO2
ton shall be applied.
The Construction Costs for this Project were shown in the Table3-3, and these expenses shall
be paid out within one year from the commencement of the Project.
The O&M Costs for this Project was projected as labor cost which is estimated by 1,000
Philippine Peso per operator with 24hours-3rotation.
Such Major Initial Investment Costs as the Carbonization Plant, Heat Exchanger, Bug Filter
and Auxiliary Equipments shall be depreciated up to Ninety (90) percent of its costs at the
equal amount every year within 15 years time.
(g) Taxes
Any Tax applicable in Philippine for the procurement of Engineering Services, Construction
of the Building, Installation of Plants and Equipments and other activities shall be inclusive
of the costs estimated in each pay items, and the Income Tax derived from this Project is
deemed to be Thirty four percent on the Incomes before Tax.
The results of the Financial Feasibility for this Case Study at the Financial Internal Rate of
Return on the incomes before Taxes, are summarized as follows. In this case, the Project is
financially viable at the given conditions as stated hereinbefore.
The detailed breakdown of Financial Internal Rate of Return, Payment Schedule and Cash
Flow Statement are shown in the Appendix 1.
The Sensitivity Analysis has been conducted for this Case Study with different assumption,
since the viability of the Project is differed. In the case of (1), FIRR before Tax shows 2.35%,
while FIRR after Tax is rather low as 1.51% which are not attractive as the investment by
the Business Entity. Thus the Sensitivity Analysis was conducted on what parameters can
improve FIRR higher, while what level of risks on the Project can sustain its viability in the
case of (2). The results of the Sensitivity Analysis are shown as follows.
In the Base Case Study, Unit Sales Rate of CER was set at Japanese Yen 3,000per CO2 ton.
Should this Unit Rate which is currently at lowest level due to economic recession
world-wide, hike up to the level of 4,000 Japanese Yen per CO2 ton, the FIRR will be
improved to 20.61% before the Tax and 15.25% after the Tax which are the levels
considered to be good for the investment.
Should increase the buying Unit Rates of Husk from 2PP/kg to 5PP/kg under the FIRR
before Tax 15.18%, and the FIRR after Tax 11.15%, the Unit Sales Rate of CER would
increase 15,064t-CO2.
In the Base Case Study, Unit Sales Rate of CER was set at Japanese Yen 9,000 per CO2 ton.
Should this Unit Rate which is currently at lowest level due to economic recession
-68- Preliminary Feasibility Study on the Production
of Bio-Cokes and Programmatic CDM Project
in the Philippines, March 2010, ECFA
Study Report Chapter 5 Financial Viability Analysis on Two Case Studies
world-wide, hike up to the level of 10,000 Japanese Yen per CO2 ton, the FIRR will be
improved to 23.68% before the Tax and 17.56% after the Tax which are the levels
considered to be good for the investment.
Should increase the buying Unit Rates of Husk from 2PP/kg to 5PP/kg under the FIRR
before Tax 15.41%, and the FIRR after Tax 11.33%, the Unit Sales Rate of CER would
increase 20,780t-CO2.
This Chapter discusses the three major activities along with the sequence of the Project
Implementation; Construction at the Project Sites, Trial Operation, and Personal and
Training Program for the Operators. Construction at the Project Sites includes Design
Development and Construction Works for the Project. Project boundary shall be clearly
defined between the existing Coconut Processing Systems and that of this Project. Trial
Operation is the activities to be conducted by the Contractor(s) of the Project in order to
ensure the performance of the designed capability of the Project, while Personnel and
Training Program for Operators shall be undertaken by the Implementation Agency of the
Project and may be supported by the public sectors such as Philippine Coconut Authority
(PCA) and Development Bank of the Philippines (DBP).
The major part of the Project may be undertaken by local construction companies with
adequately qualified in terms of Technology and Financial capabilities. They shall undertake
the following Scope of Works and responsibility for overall quality of the works that are
required by the Project.
In order to make quality Biomass-based Cokes, these Plants and Equipments play important
roles within the entire systems. Alternative studies shall be conducted on the performances
between different set of the Plants and Equipments namely, the configuration of
Carbonization Plant, Heat Exchanger, Scrubber/Bug Filter and other Ancillary Equipments.
The best system model with proven experiences and performance records shall be selected
for the Carbonization Plant, Heat Exchanger, Scrubber/Bug Filter and other Ancillary
Equipments. And those Plants and Equipments shall be procured from the well-qualified
suppliers from Japan or other South-east Asian Countries.
A Warehouse for stockpile of the Sun-dried Husks shall be provided within the yard of the
Coconut Processing Mill. Solid yet functional foundation shall be provided for heavy
Carbonization Plants and other Ancillary Equipments. Also, associated Power and Water
Supply Systems shall be installed in order to fully run the Plants and Equipments.
Operators for the Carbonization Plant, Heat Exchanger, Scrubber/Bug Filter and other
Ancillary Equipments must be stationed at the Project Site for a sound system operation.
Those Plant Operators shall be commonly engaged in the operations of the existing Coconut
Processing Plant and the proposed Biomass-based Coke Production Systems. In order to
make such integrated operations for two plants simultaneously; intensive On-the-Job
Trainings for Operator at the Mill shall be conducted for certain periods of time. The training
program for operators shall be conducted. The actual training program shall be conducted in
parallel with construction at the sites by the Contractor or Supplier who provided the Plants
and Equipments for the Project.
National Economic
Development Authority
(NEDA)
National Commission
Coconut Mill Development Bank of
for CDM
(Parent Firm) the Philippines
(DENR)
Middleman &
Special Purpose Company
Coconut Grower's UNFCCC
(SPC)
Cooperative
Husk Supply
Agreement
Buyer of CER
Iron & Steel Industry
CDM Sales
Metal Casting Industry
Agreement
Bio-cokes Sales Agreement
This Study was designed to check the viability of the Project at a Preliminary level and it is
essential to proceed to the level of full-scale Feasibility Study. The Project Preparation Study
which will be provided by JICA is one of the most potential resources for such study, and the
proposed schedule for such Study is forecasted as shown in the table below.
in Japan Survey
-Confirmation of -NEDA
Application, -Department of
And EIA Agriculture
required Conditions
in applying for ODA
Viability Analysis
Receipient Country
If viability of the Project is confirmed by the Project Preparation Study, official request for
the implementation of the Project shall be prepared by the host Country. The scale and
boundary of the Project shall be determined through the Project Preparation Study, and
Preliminary Environmental Impact Assessment Study shall be conducted by the host
Country.
Prior to the finalization of Loan Agreement, there are several steps for discussion,
negotiation and approval by both Governments. The proposed Construction Schedule is
shown in the following Figure.
b) Tendering
As described in Chapters 3.5 and 6.1, Carbonization Plant and its ancillary equipments shall
be located and integrated with the existing Coconut Mill processing systems. However, it is
also discussed in Chapter 3.5, activity and performance from this Project shall be clearly
distinct from that of Coconut Mill processing systems. Thus, any cost for modernization and
improvement on the existing Plants and Equipments are excluded from this Study.
APPENDIX 1
Pre FIRR 15.18% -274,500,000 47,353,546 47,353,546 47,353,546 47,353,546 47,353,546 47,353,546 47,353,546 47,353,546 47,353,546 47,353,546 47,353,546 47,353,546 47,353,546 47,353,546 47,353,546
DSCR more than 1.1 - 2.53 2.56 2.60 2.63 2.66 2.70 2.73 2.77 2.81 2.85 2.89 2.93 2.97 3.01 3.06
After FIRR 11.15% -274,500,000 38,850,219 38,781,137 38,712,054 38,642,972 38,573,889 38,504,807 38,435,724 38,366,642 38,297,559 38,228,477 38,159,394 38,090,312 38,021,229 37,952,147 37,883,064
DSCR more than 1.1 - 2.08 2.10 2.12 2.15 2.17 2.19 2.22 2.24 2.27 2.30 2.33 2.36 2.39 2.42 2.45
Pre FIRR 20.61% -274,500,000 60,188,295 60,188,295 60,188,295 60,188,295 60,188,295 60,188,295 60,188,295 60,188,295 60,188,295 60,188,295 60,188,295 60,188,295 60,188,295 60,188,295 60,188,295
DSCR more than 1.1 - 3.22 3.26 3.30 3.34 3.38 3.43 3.47 3.52 3.57 3.62 3.67 3.72 3.78 3.83 3.89
After FIRR 15.25% -274,500,000 47,834,544 47,765,462 47,696,379 47,627,297 47,558,214 47,489,132 47,420,049 47,350,967 47,281,884 47,212,802 47,143,719 47,074,637 47,005,554 46,936,472 46,867,389
DSCR more than 1.1 - 2.56 2.59 2.61 2.64 2.67 2.71 2.74 2.77 2.80 2.84 2.87 2.91 2.95 2.99 3.03
Case1 Northern Coast of Mindanao – B. husk purchase price : 5PP/kg - Financial analysis
Pre FIRR 15.18% -274,500,000 47,355,967 47,355,967 47,355,967 47,355,967 47,355,967 47,355,967 47,355,967 47,355,967 47,355,967 47,355,967 47,355,967 47,355,967 47,355,967 47,355,967 47,355,967
DSCR more than 1.1 - 2.53 2.56 2.60 2.63 2.66 2.70 2.73 2.77 2.81 2.85 2.89 2.93 2.97 3.01 3.06
After FIRR 11.15% -274,500,000 38,851,914 38,782,832 38,713,749 38,644,667 38,575,584 38,506,502 38,437,419 38,368,337 38,299,254 38,230,172 38,161,089 38,092,007 38,022,924 37,953,842 37,884,759
DSCR more than 1.1 - 2.08 2.10 2.12 2.15 2.17 2.19 2.22 2.24 2.27 2.30 2.33 2.36 2.39 2.42 2.45
Transportaion cost 24t-husk/day from farmer to oil mill factory 33,810,000 JPY/year
Round-trip distance ; 2car, 2round-trip/day, 40km/round-trip distance 138,000 km/year
D i es el cons umti on ; 4k m/L 34.5 k L/y ea r
Diesel unit price 80 JPY/L
fuel cost 2,760,000 JPY/year
Mileage including truck depreciation ; 15,000PP/day 10,350,000 JPY/year
Expensess including driver, load/unload work ; 30,000PP/day 20,700,000 JPY/year
Transportaion cost 4.2t-husk-cokes/day from oil mill factory to iron steel plant 5,724,300 JPY/year
Round-trip distance ; 2car, 2round-trip/day, 300km/round-trip distance 5,040 km/year
D i es el cons umti on ; 4k m/L 1.3 k L/y ea r
Diesel unit price 80 JPY/L
fuel cost 100,800 JPY/year
Mileage including truck depreciation ; 5,300PP/day 1,828,500 JPY/year
Expensess including driver, load/unload work ; 11,000PP/day 3,795,000 JPY/year
C/M management cost 1,040,000 JPY/year
CPA monitoring 1,000,000 JPY/year
traffic ; 4round trip, 1person/trip 40,000 JPY/year
Pre FIRR 15.41% -63,900,000 11,144,437 11,144,437 11,144,437 11,144,437 11,144,437 11,144,437 11,144,437 11,144,437 11,144,437 11,144,437 11,144,437 11,144,437 11,144,437 11,144,437 11,144,437
DSCR more than 1.1 - 2.56 2.59 2.62 2.66 2.69 2.73 2.76 2.80 2.84 2.88 2.92 2.96 3.00 3.05 3.09
After FIRR 11.33% -63,900,000 9,128,628 9,112,547 9,096,465 9,080,384 9,064,302 9,048,221 9,032,139 9,016,058 8,999,976 8,983,895 8,967,813 8,951,732 8,935,650 8,919,569 8,903,487
DSCR more than 1.1 - 2.10 2.12 2.14 2.17 2.19 2.21 2.24 2.27 2.29 2.32 2.35 2.38 2.41 2.44 2.47
Pre FIRR 23.68% -63,900,000 15,783,618 15,783,618 15,783,618 15,783,618 15,783,618 15,783,618 15,783,618 15,783,618 15,783,618 15,783,618 15,783,618 15,783,618 15,783,618 15,783,618 15,783,618
DSCR more than 1.1 - 3.63 3.67 3.72 3.76 3.81 3.86 3.91 3.97 4.02 4.08 4.13 4.19 4.25 4.32 4.38
After FIRR 17.56% -63,900,000 12,376,055 12,359,973 12,343,892 12,327,810 12,311,729 12,295,647 12,279,566 12,263,484 12,247,403 12,231,321 12,215,240 12,199,158 12,183,077 12,166,995 12,150,914
DSCR more than 1.1 - 2.84 2.87 2.91 2.94 2.97 3.01 3.05 3.08 3.12 3.16 3.20 3.24 3.28 3.33 3.37
Pre FIRR 15.41% -63,900,000 11,145,991 11,145,991 11,145,991 11,145,991 11,145,991 11,145,991 11,145,991 11,145,991 11,145,991 11,145,991 11,145,991 11,145,991 11,145,991 11,145,991 11,145,991
DSCR more than 1.1 - 2.56 2.59 2.62 2.66 2.69 2.73 2.76 2.80 2.84 2.88 2.92 2.96 3.00 3.05 3.09
After FIRR 11.33% -63,900,000 9,129,716 9,113,635 9,097,553 9,081,472 9,065,390 9,049,309 9,033,227 9,017,146 9,001,064 8,984,983 8,968,901 8,952,820 8,936,738 8,920,657 8,904,575
DSCR more than 1.1 - 2.10 2.12 2.14 2.17 2.19 2.21 2.24 2.27 2.29 2.32 2.35 2.38 2.41 2.44 2.47
APPENDIX 2
Appendix 2 : T.O.R
Terms of Reference for Preliminary Feasibility Study on The Production of Bio-Cokes
and Programmatic CDM Project in the Philippines
1. Project Digest
(2) Location:
- Calabarzon
- Northern Mindanao
The Philippine Coconut Authority (PCA) is the implementing agency of the Philippine
Government during the r the whole course of the Study period. All coordination and
cooperation with other Government Agencies concerned will made through PCA. For
purposes of implementing the Project, a Steering Committee will be established as follows:.
Chairman:
Members:
The electric furnace which uses abundant fossil coke is the mode of steel making in the
Philippines. Fossil coke is imported and the cost is relatively erratic and expensive.
Bio-cokes to be produced from coconut husk waste which are abundant in the Philippines
could be used in lieu of fossil cokes to meet the huge demand of the steel industry. The
experimental research conducted solely for the purpose of the Pre-feasibility Study shows
successful result for producing bio-cokes at reasonable cost. Compared with fossil coke,
emission of bio-cokes is non polluting and compliant with the Kyoto Protocol on Clean
Environment. Production of bio-cokes from coconut husk was found to be economically and
financially viable.
The primary objective of the Project is the mass production of bio-cokes from trash coconut
husk for use in the process of steel making to reduce the importation of expensive fossil
cokes. Experimental research and test show successful results of producing bio-cokes from
coconut husk at reasonable cost. The project is economically and financially viable. The sale
of husk to processing plants would be an added income to sustenance farmers and the
establishment of bio-cokes processing plants will generate employment opportunities in
rural areas. Unlike the fossil cokes, the emission of bio-cokes for manufacture of steel is
non-polluting and is therefore environmental friendly, and the savings in foreign exchange to
purchase expensive fossil cokes are among the other advantages of the project.
The Preliminary Feasibility Study was conducted by the Engineering and Consulting Firms
Association (ECFA) of Japan and completed in March 2010. The Study has determined that
bio-cokes from coconut husk could be massed produce at reasonable cost with appropriate
techniques to meet the huge demand of the steel industry.
While the production of bio-cokes was found to be financially viable, there is still a need to
scout other areas as potential production areas for the manufacture of bio-cokes. This would
entail site trips to other places in Mindanao particularly for Davao and Sarangani Regions in
Mindanao to gather more information of huge coconut plantations and economic conditions
A2-2 Preliminary Feasibility Study on the Production
of Bio-Cokes and Programmatic CDM Project
in the Philippines, March 2010, ECFA
Appendix-2
in the areas.
The main objective of the Project Preparation Study is to confirm the outputs of the
Preliminary Feasibility Study. This will entail a detailed study of the proposed bio-cokes
processing plants, sources of husk materials, means and mode of gathering the materials,
cooperation/coordination with oil plants, steel industry and the implementing agency to
ensure successful execution of the Project.
1) Overview of the coconut industry, oil processing plants and steel industry
a) Gathering and Analysis of Data/Information
- Economic profile
- Condition of the oil and steel making plants including demand and supply.
- Policy of the Government towards the coconut industry.
(4) Assistance in the Environmental Impact Assessment Study done by the recipient
Government
(Air Quality, Water Quality, Noise and Vibration, Bad Smell, etc )
c. Supply area survey (number of consumers, future demand, industrial and economic
conditions, and road condition)
e. Facility design (rough equipment specifications for the plants, preparation of basic
drawings and cost estimates)
m. Stakeholders’ meeting
3. Staffing Schedule
Staffing to conduct the preparation study will comprise of the following members:
Expatriate Staff
Team Leader
1-Plant Engineer
1-Civil Engineer
1-Economist
1-CDM Specialist
Local Staff
Architect
Civil Engineer
Structural Engineer
Economist
Environmental Specialist
Supporting Staffs
CAD Operator
Typist/Secretary
The study room including tables and chairs will be provided by the Implementing Agency.
Counterpart Personnel
The Philippine Government will provide the Study Team with comments on the Draft
Final Report within one month after the receipt of the Report.
1 $ = 95 JPY
1 PHP = 2 JPY
A2-1
A2-7 Preliminary Feasibility Study on the Production
of Bio-Cokes and Programmatic CDM Project
in the Philippines, March 2010, ECFA