A thesis submitted in partial fulfillment of the requirements for the degree of Master of Science, School of Environment, Resources and Development

Thesis (M.Sc.) - Asian Institute of Technology, 1980

This report presents an economic analysis of environmental control established by the Government of Malaysia for the palm-oil industry. Discounted economic cash flow and internal rate of return technique have been utilized for this analysis. Data and information required for this analysis are gathered from field interviews of oil palm estates and processing mills of the Federal Land Development Authority from November December 1979. Based on the available information from these sources, economic performance of three representative mills of 20, 36, and 60 tonne FFB/hr capacity were evaluated for 15 years of development and operation. Results of this analysis revealed a minimal economic impact on the mills with internalized pollution abatement costs. However, a potential price increase in the saleable products is anticipated due to the increase in demand for the expanding domestic refining and fractionating industry. Cost-effectiveness analysis was carried out to identify treatment schemes with optimal costs which would at the same time help meeting the effluent limitations required by the environmental control regulations. Anaerobic ponds with recirculation and high rate tank digesters as first stage treatment, followed by aerated lagoons are recommended for treatment of palm oil mill effluents. Both these treatment schemes incur relatively higher costs than that used in the economic impact analysis, but the industry should be able to absorb these treatment costs as the economic impact of such controls on the mills is minimal.