Techno-economic Analysis of Bioethanol Production from Palm Oil Empty Fruit bunch

Bioethanol has become more attractive as an alternative to fossil-based fuel: a biofuel and fuel additive to gasoline. Therefore, people are interested in ethanol from a feedstock that does not compete with the food supply. Oil palm empty fruit bunch (EFB) are major biomass by-products from the palm oil industry. This study proposes commercial-scale bioethanol production from EFB of 99.5 wt.% at 10,000 L/day ethanol. This bioethanol production was formulated using the commercial simulator and divided into four stages: pre-treatment, Hydrolysis, fermentation, and purification. EFB is pretreated using hot water, hot-compressed water, and alkaline hydrogen peroxide approaches. Simultaneous Saccharification and fermentation are chosen to produce the target of ethanol. At optimum conditions, it can conclude that the ethanol production rate was 13,950 litter per day by using an empty fruit bunch of 47,208 kg per day. Finally, the economic feasibility is also evaluated under techno-economic analysis. From the economic perspective, the net present value (NPV), internal rate of return (IRR), and payback period (PBP) equate to 9.016 M USD, 15%, and seven years, respectively, based on 20 years of life and a total capital investment of 12.32 M USD. The results show that bioethanol production is profitable.

Bioethanol production; Empty fruit bunch; Process simulation; Techno-economic analysis

    The empty fruit bunch (EFB) is used as raw material for bioethanol production (Singh et al., 2014). The ethanol production from palm empty fruit bunches is 10,000 liters per day at a concentration of 99.5% wt. This section describes the process of modeling ethanol production in the Aspen suite simulator, which has been described as using the proper equipment for simulating ethanol production (Suwajittanon et al., 2022). Four main sections function as Pretreatment (to digest Lino-cellulosic to smaller molecules), Hydrolysis (to convert small molecules to sugars), Fermentation (to produce ethanol from sugars), and Purification (to purify ethanol to 99.5%).

2.1. Process Overview

       The bioethanol production process from empty oil palm fruit bunches includes nine steps: hot compressed water, hot water extraction, alkaline hydrogen peroxide, neutralization (Balan et al., 2021; Chin et al., 2013), mixing, autoclave, simultaneous Saccharification (Hossain et al., 2020; 2018; Choedkiatsakul et al., 2015a; 2015b;  Li et al., 2010), and fermentation process (SSF), autoclave again, and purification. Figure 1 describes various condition information used in the actual experiment and the results derived from the experiment.

Figure 1 Overall process of bioethanol production from oil palm empty fruit bunch

2.2. Composition of raw material

The composition of the oil palm empty fruit bunch is experimented with and available on our laboratory website under permission.

2.3.  Process description

        Figure 2 depicts the bioethanol production process from oil palm empty fruit bunch flowsheet in Aspen plus. The first steps of substances are added to the FEED1-line, and steam is added to the STEAM1-line. They then begin the pre-treatment process. The objective of the hot compressed water unit is to dissolve and remove hemicellulose into a liquid phase. When a hot compressed water process has already been completed, the second sub-pretreatment is the hot water extraction process. This unit eliminates hemicellulose and lignin, which uses the WATER1-line to add water, and the final pre-treatment is an alkaline hydrogen peroxide treatment process. When the process is completed, sodium hydroxide (NaOH) is added by the NaOH-line, the H₂O₂-line adds hydrogen peroxide (H₂O₂), and lignin is delignification by H₂O₂.  After that, all substances are neutralized, and this step introduces water into the process via the WATER3-line. The mixing process has the following steps combining yeast, peptone, and buffers in a mixing tank. The next step is to sterilize contamination with the substance using the autoclave process. After sterilization, the substances are stored in the STORAG1-tank for simultaneous Saccharification and fermentation. This process needs a 72-hour operation time and incorporates yeast and enzyme (Ctec2) into the cycle. At the completion of the process, all substances are separated from solid waste before being collected in the liquid phase in the STORAGE tank. Next, the purification process that uses pervaporation is used to purify ethanol for the next cycle. A comparison of the proposed purification is available elsewhere (Suwajittanon et al., 2022). Finally, it achieves 99.5 %wt. ethanol or Anhydrous ethanol for fuel blending as a customer requirement.

Figure 2 The completed flowsheet of bioethanol production from oil palm empty fruit bunch

2.4.  Economic Evaluation

        The maximization of financial indicators such as the gross operating margin (GOM) or the net present value (NPV) is a common objective in investment projects and process optimization. In such cases, the project evaluator will use the NPV (Net Present Value) as a basic decision. In capital budgeting, NPV assesses a project's or investment's profitability. It is calculated by subtracting the present value of cash inflows from the current value of cash outflows over time. As a result, one of the project's objectives is to maximize net present value to determine the profitability of developing an EFB ethanol production process. The GOM determines the cash flow associated with gross profits or income and annual operating expenses (OPEX). Net present value is calculated as the difference between annual gross profits and total capital expenditure (CAPEX).

        CAPEX is for major purchases that will be used in the future. Because these costs can only be recovered through depreciation, companies ordinarily budget for CAPEX purchases separately from preparing an operational budget. CAPEX refers to the costs of constructing a new plant or changing an existing chemical manufacturing plant. Fixed capital investment (FCI) refers to the capital required to supply the necessary manufacturing and plant facilities, whereas working capital refers to the capital required to operate the plant. The total capital investment is the sum of the fixed capital investment and the working capital. The fixed-capital investment represents the direct cost of the installed process equipment and auxiliaries required for complete process operation. These plant components include the land, processing buildings, administrative and other offices, warehouses, laboratories, transportation, shipping and receiving facilities, and other permanent parts of the plant. The raw-materials inventory included in working capital usually amounts to a first-month supply of the raw materials valued at delivered prices. The ratio of working capital to total capital investment varies with different companies. Still, most chemical plants use an initial working capital amounting to 10-20% of the total capital investment. This project uses working capital at 15% of the total capital investment. As mentioned, CAPEX cost includes the purchased equipment cost and the direct and indirect capital investment. This study utilized the fractionated calculation (Peters et al., 2003). CAPEX can be calculated by estimating the cost based on equipment cost. Therefore, the purchase of equipment cost is a key for CAPEX estimation. In this work, only the purchased equipment cost of the base case is calculated using APEA (Aspen Process Economic Analyzer) as a supportive tool to evaluate the industrial equipment price mainly. The estimation of the equipment price is based on the 1^st Qtr of 2017. As a result, all of the prices exported from APEA should be recalculated to the cost in the current year, 2020. The chosen cost index utilized in this work is the Marshall & Swift Equipment Cost Index (M&S Index). Therefore, the M&S index value used to advance the purchased equipment cost should be in 2017 and the present index in 2020 following equation (1). 

        In other cases, the equipment cost is estimated by the scaling equation, which shows in equation (2)

Where n is the exponential value depending on the specific type of equipment

       OPEX can be estimated from the summation of direct costs, fixed costs, and general expenses. This study utilized the fractionated OPEX calculation (Peters et al., 2003); the other relevant economic metric should be considered in addition to the benefit and expense aspects. The discounted flow rate is to apply an adjustment factor to the net present value. The adjustment factor derived from the accepted time value of money is the so-called "discounting rate." WACC (Weighted Average of Capital Cost) has been considered as most investors rely on discounting the future cash flow for new investments. The WACC in this work for new plant investment is 7%. For the ethanol production operation, the operating hours each year were assumed for 7,200 hours. The summary of all related economic analyses is illustrated in Table 1.

Table 1 The additional information for economic evaluation

     At the designed conditions, bioethanol from an empty fruit bunch can produce ethanol of 13,950 litter per day by using an empty fruit bunch of 47,208 kg per day.

    The economic evaluation was performed for selling ethanol as the main product. The equipment size was calculated in the first step, and the purchase cost was estimated. The major equipment, such as the pump, heat exchanger, reactor, and distillation column, was sized, and estimated the purchased cost with APEA. However, the batch units were sized using a mass flow through the units at a cycle time.  The purchased costs were estimated for the equipment that Aspen Process Economy Analyzer was not provided (Seider et al., 2009). The characteristic is represented by the unit's capacity, which was used to estimate the purchased cost.

     Total capital investment (TCI) or Total capital expenditure (CAPEX) was then estimated; it was associated with the plant's construction. The fixed-capital investment (FCI) and working capital (WC) results are calculated using critical assumptions for a solid-fluid process. However, the total equipment cost from APEA estimated the price based on the 1^stQtr of 2017. Marshall & Swift Equipment Cost Index (M&S Index) converts total equipment costs from 2017 to 2020. CAPEX of bioethanol production is 29,014,831.77 USD. The purchase of equipment cost is directly used for CAPEX calculation by ratio factor (Peters et al., 2003). The detail of the CAPEX parameter of the base case is illustrated in Table 2.

        Figure 3 illustrates the CAPEX distribution in each section. It can be noticed that the highest capital costs are the saccharification and fermentation section (SSF), followed by the purification section and pre-treatment section. The SSF section is the core of the ethanol production process to convert sugar into ethanol. The distillation process is highly complex, nonlinear, and high order. It has many constraints that are frequently encountered by the operation. The equipment with this unique characteristic of operation requires a high construction cost. The pre-treatment section operates at high temperatures, making the building cost very high.

        Bioethanol production process from empty fruit bunch must work under high pressure (30 bar) in the first pre-treatment process. It results in the requirement of high equipment purchasing costs in a hot compress water process (HCW).

Table 2 Total capital investment in bioethanol production

    The design of bioethanol production was simulated by using empty fruit bunch as feedstocks. The process was separated into four sections: pre-treatment, Hydrolysis, fermentation, and purification. Pervaporation technologies were proposed as ethanol dehydration technologies. The empty fruit bunch was treated with hot-compressed water and hot water techniques for the pre-treatment section. Then, the alkaline hydrogen peroxide technique was used to treat the raw materials. After sterilizing and feeding into the fermenter, the raw materials were converted into ethanol using simultaneous Saccharification and fermentation. In the purification process, 99.5% wt. Ethanol was produced by using pervaporation technologies. The ethanol production rate was 13,950 litter per day by using an empty fruit bunch of 47,208 kg per day. Next, the techno-economic analysis was performed. The net present value (NPV) is calculated by the assumption of weighted average cost of capital (WACC) which is set as 7%, tax which is set fit, and a designated lifetime of 20 years. From the calculation, the NPV of the base case is 9,016,964 USD. The process is worth investment because the net present is a positive value. In addition, the rate of return (IRR) is 15%, which is greater than WACC, and paid back period (PB) is around seven years.

The Faculty of Engineering, Kasetsart Engineering, Thailand supports this study.

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