SEOUL, 7 March,2009 (WAM) -- South Korea signed an agreement with Indonesia Friday to produce wood pellets that are cheaper and cleaner to burn than fossil fuels, Yonhap News reported.
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 pellets starting in late 2010.
The Daejeon-based 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 pellet-making facilities and everyday operations to be carried out by private companies," Yonhap quoted an official as having said in its dispatch from Jakarta,. He said the size of fuel production will be determined after the forest has been examined in detail to check for usable plants.
"The process will involve both cutting trees and planting to make up for those used as fuel," he said.
Wood pellets are made from finely ground and compressed wood that is cheap to use, has relatively good fuel qualities and does not release as much greenhouse gas as refined fuel products.
The cylinder-shaped pellets on average have 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 pellets have also been found to produce 12 times less greenhouse gases than diesel fuel.
At present, South Korea's wood pellet consumption is small and generally limited to use in some rural communities and greenhouses. It has only one operational wood pellet facility, with two more to be opened within the year. The majority of products used are 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 for wood products and palm oil.