Analysis of the Economic and Environmental Feasibility of Circular Economy Practices among the Palm Oil Smallholders
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Abstract
Palm oil is one of the most widely used vegetable oils in the world, but its production and consumption have been associated with various environmental and social issues. One of these issues is the generation of large amounts of palm oil waste, such as empty fruit bunches (EFB), palm kernel shells (PKS), and palm oil mill effluent (POME). These wastes pose a challenge for disposal and management, but they also offer opportunities for value-added utilization. For example, palm oil waste can be converted into biofuels, biogas, biochar, compost, or animal feed. However, the potential economic impact of these utilization options on smallholders of palm oil who account for about 40% of global palm oil production, is not well understood. Therefore, we propose a study to assess the environmental and economic feasibility and benefits of different palm oil waste utilization scenarios for smallholders in Malaysia. The study will involve collecting primary data from a representative sample of smallholders in a selected area in Kelantan, Pahang and Johor on their current practices and preferences regarding palm oil waste management and utilization; conducting a techno-economic analysis of various palm oil waste utilization technologies and business models; and evaluating the economic and environmental feasibility of different utilization scenarios on smallholders' income, expenditure, employment, and livelihoods. The study will also identify the barriers and drivers for smallholders to adopt palm oil waste utilization technologies and provide policy recommendations to support their adoption. To achieve the objectives, this study will deploy a mixed method comprising the quantitative and qualitative methods. For the quantitative method, the Cost–benefit analysis (CBA) will be used to assess the economic and environmental feasibility through the systematic prediction of social costs and social benefits. To gather more meaning from the quantitative data, qualitative techniques will be used through interviews.
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