S. Korea to produce wood pallet fuel in Indonesia

By Lee Joon-seung
SEOUL, March 6 (Yonhap) -- South Korea signed an agreement with Indonesia Friday
to produce fuel from wood pallets that is cheaper and cleaner to burn than fossil
fuels.

The memorandum of understanding between the Korea Forest Service and Indonesia's
Forest Ministry calls for 200,000 hectares of forest land to be set aside to
produce wood for pallets starting in late 2010.
The state forestry service said that the deal signed on the sidelines of
President Lee Myung-bak's visit to the Southeast Asian country gives the South
Korean government a free 99-year lease on Kalimantan Island, with Indonesia
benefiting from investment that can lead to jobs for its people.
"The forest service will provide administrative support, with the actual building
of the pallet-making plant and operations to be carried out by private
companies," an official said. He said the size of fuel production will be
determined after the forest has been examined in detail to check for usable
plants.
Wood pallets are made from finely ground and compressed wood that is cheap to
use, has relatively good fuel qualities and releases less greenhouse gases than
refined fuel products.
The cylinder-shaped pallets on average have a lower heat value than diesel fuel,
liquefied natural gas (LNG) and kerosene, but could provide an 99-square-meter
living space with adequate heat for 1.8 million won (US$1,160) per year.
This is better than the 4.2 million won needed when burning diesel, 2.0 million
won for LNG and 3.0 million won for kerosene.
The pallets have also been found to produce 12 times less greenhouse gases than
diesel fuel.
At present, South Korea's pallet consumption is small and generally limited to
use in some rural communities and greenhouses. It has only one operational wood
pallet facility, with the majority of products used imported from China and
Canada.
The 200,000 ha deal, meanwhile, increased the size of forest land leased by South
Korea in Indonesia to 700,000 ha.
The 500,000 ha leased in 2006 under a similar long-term arrangement is used by
companies like SK Networks Co. and Inni Joa Co. to grow timber and palm oil.
yonngong@yna.co.kr
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