Cost analysis of community scale smokeless charcoal briquette production from agricultural and forest residues

Cost analysis of community scale smokeless charcoal briquette production from agricultural and forest residues

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Energy (2019) 000–000 310–316 EnergyProcedia Procedia160 00 (2017) www.elsevier.com/locate/procedia

2nd International Conference on Energy and Power, ICEP2018, 13–15 December 2018, 2nd International Conference on Energy and Power, ICEP2018, 13–15 December 2018, Sydney, Australia Sydney, Australia

a a

Cost analysis of community scale smokeless charcoal briquette The 15th Symposium District Heating and Cooling Cost analysis ofInternational community scale on smokeless charcoal briquette production from agricultural and forest residues production from agricultural and forest residues Assessing the feasibility of using the heat demand-outdoor a, a a K.Y. Tippayawong *, S. Santiteerakul , S. Ramingwong , N. Tippayawongb a, a a b K.Y. Tippayawong *, S.for Santiteerakul , S. Ramingwong , N. demand Tippayawong temperature function a long-term district heat forecast Excellence Centre in Logistics and Supply Chain Management, Faculty of Engineering, Chiang Mai University, Chiang Mai, 50200, Thailand

Department of Mechanical Engineering, Faculty of Engineering, Chiang MaiChiang University, Chiang Mai, 50200,Mai, Thailand Excellence Centre in Logistics and Supply Chain Management, Faculty of Engineering, Mai University, Chiang 50200, Thailand a,b,c a a b c c b Department of Mechanical Engineering, Faculty of Engineering, Chiang Mai University, Chiang Mai, 50200, Thailand b

I. Andrić

a

*, A. Pina , P. Ferrão , J. Fournier ., B. Lacarrière , O. Le Corre

IN+ Center for Innovation, Technology and Policy Research - Instituto Superior Técnico, Av. Rovisco Pais 1, 1049-001 Lisbon, Portugal

b Abstract Veolia Recherche & Innovation, 291 Avenue Dreyfous Daniel, 78520 Limay, France c Département Systèmes Énergétiques et Environnement - IMT Atlantique, 4 rue Alfred Kastler, 44300 Nantes, France Abstract Biomass conversion by carbonization process is a simple and appropriate method to convert agricultural and forest residues into solid bio-renewable Great attentions haveisbeen paid and to commercial in rural Biomass conversion fuel. by carbonization process a simple appropriatesmokeless method tocharcoal convert production agricultural especially and forestthose residues into communities where large of agricultural and forest are available and not yet harnessed. Besides, smokeless solid bio-renewable fuel. amount Great attentions have been paid residues to commercial smokeless charcoal production especially thosecharcoal in rural isAbstract a premium product withamount stable export demand,and generating better value added than In Besides, the present paper, a charcoal biomass communities where large of agricultural forest residues are available andnormal not yetcharcoal. harnessed. smokeless residues-to-smokeless charcoal plant with appropriate technology was proposed a local municipality in Mae is a premium product with stableconversion export demand, generating betterthermal value added than normal charcoal.for In the present paper, a biomass District networks areconversion commonly addressed in the literature astechnology onewere of the most forbenefits decreasing the Hong Son,heating Thailand. Cost analyses as wellplant as anwith economic feasibility survey carried outeffective to evaluate potential the residues-to-smokeless charcoal appropriate thermal was proposed for solutions a local municipality inofMae greenhouse gas emissions from theasbuilding sector. These systems require high which returned the heat proposed TheCost study was about utilizing biomass residues available around Mae Hong area.are The site wasthrough firstly chosen Hong Son,venture. Thailand. analyses well as an economic feasibility survey wereinvestments carried out Son to evaluate potential benefits of the sales.onDue to the changed climate and building renovation policies, heat demand in the site future based available supply, basicconditions supply consolidation models. Charcoal from biomass residues were prepared, and proposed venture. The study using was about utilizing biomass residues available around Maethese Hong Son area. The wascould firstlydecrease, chosen prolonging the investment return period. compacted into charcoal briquettes, andsupply thermally treated to produce final product smokeless charcoal This study based on available supply, using basic consolidation models. Charcoal fromasthese biomass residuesbriquettes. were prepared, and The main of this paper is to assess the feasibility of to using the heat demand – outdoor temperature function for heat focused on scope the feasibility of demand, engineering, and financial concern. Finally, the conversion model was established compacted into charcoal briquettes, and thermally treated produce final product asbiomass smokeless charcoal briquettes. Thisdemand study forecast. The district ofcost located in Lisbon (Portugal), was as the a case study. The making district is commercializing consisted of 665 together with practical model which could beand useful to investors andused entrepreneurs for decision in focused on thea feasibility ofAlvalade, demand, engineering, financial concern. Finally, biomass conversion model was established buildings that vary in both construction period and typology. Three weather scenarios (low, medium, high) and three district community scale production smokeless together with a practical cost of model which charcoal. could be useful to investors and entrepreneurs for decision making in commercializing renovation scenarios were developed (shallow, intermediate, deep). To estimate the error, obtained heat demand values were community scale production of smokeless charcoal. compared with results from a dynamic heat demand model, previously developed and validated by the authors. © 2018 The Authors. Published by Elsevier Ltd. ©The 2019 The Authors. Published by Elsevier Elsevier Ltd. showed when only weather change is considered, the margin of error could be acceptable for some applications This isresults an open accessthat article under the CC BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0/) © 2018 The Authors. Published by Ltd. This iserror an open accessdemand article under the CCthan BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0/) (the in annual was lower 20% forscientific all weather scenariosofconsidered). However, Conference after introducing renovation Selection under of the committee the 2nd International on Energy and This is an and openpeer-review access article underresponsibility the CC BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0/) Selection and peer-review under responsibility of (depending the scientific committee of and the renovation 2nd International Conference on Energy and scenarios, the error value increased up to 59.5% on the weather scenarios combination considered). Power, ICEP2018. Selection and peer-review under responsibility of the scientific committee of the 2nd International Conference on Energy and Power, ICEP2018. The value of slope coefficient increased on average within the range of 3.8% up to 8% per decade, that corresponds to the Power, ICEP2018. decrease Biomass in the number of heating hours Cost of 22-139h during the heating season (depending on the combination of weather and Keywords: conversion; Carbonization; model; Densification; Rural development; Supply consolidation model renovation scenarios considered). On the other hand, function intercept increased for 7.8-12.7% per decade (depending on the Keywords: Biomass conversion; Carbonization; Cost model; Densification; Rural development; Supply consolidation model coupled scenarios). The values suggested could be used to modify the function parameters for the scenarios considered, and improve the accuracy of heat demand estimations.

© 2017 The Authors. Published by Elsevier Ltd. Peer-review under responsibility of the Fax: Scientific of The 15th International Symposium on District Heating and * Corresponding author. Tel.: +66-5394-4125 +66 53Committee 94-4185 Cooling. E-mail address: [email protected] * Corresponding author. Tel.: +66-5394-4125 Fax: +66 53 94-4185

E-mail address: [email protected] Keywords:©Heat Forecast; Climatebychange 1876-6102 2018demand; The Authors. Published Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0/) 1876-6102 © 2018 The Authors. Published by Elsevier Ltd. Selection under responsibility of the scientific of the 2nd International Conference on Energy and Power, ICEP2018. This is an and openpeer-review access article under the CC BY-NC-ND licensecommittee (https://creativecommons.org/licenses/by-nc-nd/4.0/) Selection and peer-review under responsibility of the scientific committee of the 2nd International Conference on Energy and Power, ICEP2018. 1876-6102 © 2017 The Authors. Published by Elsevier Ltd. Peer-review under responsibility of the Scientific Committee of The 15th International Symposium on District Heating and Cooling. 1876-6102 © 2019 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0/) Selection and peer-review under responsibility of the scientific committee of the 2nd International Conference on Energy and Power, ICEP2018. 10.1016/j.egypro.2019.02.162

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1. Introduction The use of renewable energy in Thailand amounted to approximately 21% of the final energy consumption in 2015, majority of which was derived from biomass [1]. Under the Thailand Integrated Energy Blueprint, the Royal Thai government set a target to increase renewable energy in form of electricity, heat or fuels to 30% of the country final energy consumption by 2036. Bioenergy remains the dominant renewable source for Thailand. Majority of this plan appeared to encourage substantial increase in the use of biomass energy, including solid biomass, municipal waste, biogas, and biofuels. Huge amount of agricultural residues is generated each year in many countries around the World. In Thailand, available biomass residues that remained unharnessed were estimated at more than 31 million tons in 2014. With a development plan by the Ministry of Agriculture and Cooperatives, biomass residue potential was projected at almost 80 million tons a year [1]. In their natural forms, these biomass residues have high moisture content and low bulk density, making them complicated for direct use, handling and storage. There are many conversion methods for these biomass residues, such as gasification [2, 3], pyrolysis [4, 5, 6] and combustion [7]. Nonetheless, densification or briquetting and carbonization have aroused a great deal of interest in recent years as appropriate technologies of beneficiation of agricultural residues for utilization as biomass energy source [8-11]. Developing and increasing the competitiveness of local industry through market development will benefit local communities. This is also true for renewable energy industry. The local bio-economy may utilize the value chain of locally produced bioenergy to develop renewable fuels. One example is to develop marketable smokeless charcoal briquettes from locally available biomass residues using local expertise [12]. Charcoal is a carbon rich substance derived from pyrolysis of organic materials in a controlled condition. Produced from agricultural and forestry residues, charcoal is a high quality solid fuel. It can be further upgraded by densification and additional thermal treatment. International charcoal market is projected to reach almost 6.5 billion USD in 2023. The growth is mainly driven by increasing application of charcoal in metallurgical processes, barbeque cooking, and other industries [13]. In this work, feasibility of a smokeless charcoal production from agricultural and forestry residues project in Mae Hong Son, Thailand was studied based on carbonization, briquetting and torrefaction technology. Cost analysis was carried out, with respect to net present value, benefit cost ratio and internal rate of return on investment. Sensitivity analysis of major cost factors such as interest rate, market price of produced goods was also performed 2. Methodology 2.1. Proposed production system A case study was considered for Mae Hong Son, a rural mountainous town in northern Thailand, shown in Fig. 1. Local raw materials available were maize residues, wood wastes, dried fallen leaves, branches, roots and barks from garden and forest trimming. The biomass samples were sundried and stored at room condition prior to production. Main production processes included carbonization, size reduction, mixing with binder, briquetting and torrefaction, shown in Fig. 2. Carbonization of biomass residues were carried out in a locally designed pyrolysis reactor, yielding about 30% mass of original biomass input. The char was subsequently milled to powder for easy mixing and forming into shape. The binding agent was tapioca flour, used for strengthening the charcoal briquettes. Weight ratio used for char: flour: water was 20: 1: 7. They were mixed and agitated in a container, prior to densification. Char mixture was mechanically compacted into hollow hexagonal briquettes of 10 mm inner diameter, 50 mm in external diameter and about 100 mm long using an extruding machine. Its capacity was about 1,500 kg per 8 h per one briquetting machine. The charcoal briquettes were then placed in a tray and loaded into a thermal treatment chamber. The charcoal briquettes were dried and thermally treated at about 80-120oC condition for 12 h. The final products were subsequently packed and sealed for storage. The charcoal briquette had better quality than traditional charcoal. It is popular for grilling and barbeque cooking in restaurants because of its smokeless character.

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Fig. 1. location of proposed smokeless charcoal production site in Mae Hong Son

Fig. 2. charcoal briquette production process

2.2. Cost analysis Cost analysis in producing smokeless charcoal briquette was divided into 3 stages; inbound cost, production cost, and outbound cost. Fixed cost and variable cost were calculated in each stage. Total cost was eventually summarized with sensitivity analysis of changed cost assumption. The inbound cost contained cost of materials including charcoal, tapioca flour, water, and packing material. They were considered as direct and variable costs to the product. Production cost included direct and indirect labour cost, fuel wood cost, machine depreciation cost and facility cost. The outbound cost in this case study was transportation cost from Mae Hong Son to Bangkok port which is approximately 1,000 km away with traveling time around 18 h. Total cost was calculated from those direct costs and indirect costs which were finally converted to THB/kg (33 THB = 1 USD). Cost calculation was based on actual cost data gathered, together with the most possible assumption where cost could be changed.

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3. Results and discussion 3.1. Cost calculation 3.1.1 Inbound cost The inbound cost calculated in this phase combined all necessary direct materials including charcoal, tapioca flour and water. The case study company consolidated carbonization of biomass from local and remote producers at 8 THB/kg on average. About 20 kg of raw char were ground with the mixture of tapioca flour (1 kg) and water (7 kg). After briquetting process and heat treatment, 20 kg of charcoal briquette were typically obtained. The extract moisture was around 25-30% from wet briquettes. List of direct materials to produce charcoal briquettes are indicated in Table 1. Table 1. Direct material cost. Materials

Amount

Unit cost (THB/unit)

Total cost (THB)

Charcoal (kg)

20

8

160

Tapioca flour (kg)

1

20

20

Water (kg)

7

2

14

Total input (kg)

28

Output (kg)

20

194 9.70

**Conversion Rate: 33 THB = 1 USD

3.1.2 Production cost Production cost in this case study included machine depreciation cost, direct labour cost, utility cost which combined electricity cost, and cost of firewood to generate heat in thermal treatment process. (a) Machine depreciation cost Production process of the case study started from milling raw char to powder which could subsequently blended well with the binding agent. After mixing process, mixed char cake was conveyed to briquetting machine, then placed on racks before sending to thermal treatment. The case study had three production lines, each line encompasses three coarse milling machines with a capacity of 140 kg/h per machine, a mixing tank run able to mix 280 kg (char + tapioca flour + water) in 30 min, three fine milling machines with a capacity of 187.5 kg/h, and three briquetting machines capable to form char briquettes at a rate of 187.5 kg/h per machine. List of initial price and power requirement of all machines is displayed in Table 2. Total cost of all machines and equipment were estimated at 4,625,000 THB, as the initial investment. Cost was considered to depreciate over 30 months only because the company operated on two shifts for forming process (one shift was 8 h) and 24 h for thermal treatment (one round of thermal treatment was 12 h). One shift of forming process could produce up to 13.5 tons of wet briquettes which would be 30% less (9,450 kg) after 12 h baking process. In total, 18,900 kg of dry briquettes could be produced in one day from working on 2 shifts. Assuming that the company operated 25 days in one month, therefore 30 months x 25 day = 750 days depreciable duration. One day depreciation could be calculated from 4,625,000/ 750 days = 6,167 THB/day, where 18,900 kg of briquettes were produced. Hence, machine depreciation cost was 6,167 THB/day at 18,900 kg/day = 0.33 THB/kg.

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Table 2. List of available machines and equipment Machine

Power (kW/unit)

Amount (unit)

Unit cost (THB/unit)

Total cost (THB)

Coarse milling machine

2.2

10

100,000

1,000,000

Mixing machine

3.7

3

250,000

750,000

Fine milling machine

2.2

10

100,000

1,000,000

Briquette machine

7.75

10

100,000

1,000,000

Thermal treatment chamber

1

200,000

200,000

Incinerator

2

150,000

300,000

Racking

100

3,750

375,000

Total cost

4,625,000

**Conversion Rate: 33 THB = 1 USD

(b) Direct labor cost Total briquette production process required 15 temporary (daily) labors and two permanent staffs. Daily cost of temporary staffs was 350 THB/ 8 h and for the permanent staff of around 800 THB/ 8 h. Total labor cost of 8 h was (350 x 15) + (800 x 2) = 6,850 THB, where 9,450 kg of dry briquette were produced. Therefore, labor cost was 6,850 THB/ 9,450 kg = 0.72 THB/kg. (c) Utility cost The utility cost for briquette production combined two major fractions; (1) electricity cost for briquette forming process, and (2) wood fire cost for thermal treatment process. The electricity cost was calculated based on the maximum usage of 4 machine types; coarse milling, fine milling, mixing and briquetting machines. The machines were fully utilized in 2 shifts (16 h) per day and the company runs 25 days per month. The power demand for each machine is listed in Table 2. The electricity charge was calculated based on the rate of Provincial Electricity Authority of Thailand in the sector of medium general service which applies to industries with a maximum 15-min integrate demand from 30 to 999 kW. The monthly electricity charged was approximately 145,000 THB which was 5,800 THB/day, where 18,900 kg of briquettes were produced. Hence, electricity cost was 5,800 THB/day at 18,900 kg/day = 0.31 THB/kg. Wood fire cost was calculated from amount of wood consumed in the furnace to generate heat for thermal treatment process. The thermal condition required was 80-120℃ for 12 h. The thermal chamber dimension was 4 x 8 x 2.4 m3, capable of arranging 40 briquette racks. The rack size was 0.6 x 0.9 x 2 m3, containing 15 trays placing. Each tray could handle 96 briquettes (6 briquettes/kg). Therefore, one rack carried approximately 240 kg of wet briquettes to the thermal treatment chamber. In one 12-h thermal treatment, 40 racks were altogether loaded into the treatment room, accounting for 40 x 240 = 9,600 kg of wet briquettes. From Table 1, input materials were 28 kg yielding 20 kg of smokeless briquettes. The moisture loss in the thermal treatment process was (28-20)/28 = 28.5%. In order to generate heat required by the thermal treatment, firewood was used. On average about 2.9 tons of firewood was consumed, resulting in smokeless char briquettes of about 6.8 tons. Wood fire cost was 600 THB/ton x 2.9 tons = 1,740 THB, translating into 1,740/ 6,800 = 0.26 THB/ kg of briquette treatment. 3.1.3 Outbound cost The outbound cost comprised the packaging on demand from customers and the transportation cost from manufacturing site to main Bangkok port. Packaging requirements were requested specifically from customers which were usually in customised sack with moisture protection. This packaging was needed in order to comply with international shipping standards, because they were mainly shipped to customers in Korea and Japan. About 50 kg of smokeless char briquettes were packed in one sack, which yielded packaging cost at10 THB/sack/ 50 kg = 0.20 THB/kg.

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Transportation cost was calculated from the manufacturing site at Mae Hong Son province in the north of Thailand to Bangkok port in the central part of the country. The distance is 880 km with a traveling time from 12-20 h depending on traffic condition. The transportation cost was charged per one container which could carry up to 24 tons of dry charcoal briquettes. The cost was approximately 40,000 THB/ 24 tons, or 1.67 THB/ kg. 3.1.4 Total cost and profit estimation Total cost is summarized in Table 3, where the initial profit was also estimated. The selling price offered from Korean and Japanese customers was 17 THB/kg which was Freight on Board (FOB) price. The demand was approximately 5,000 tons a year. Total cost was calculated per kg of the output product. Table 3. Total costs from inbound, production, through outbound process. Stage

Category

Cost (THB/kg)

Inbound Production

Raw material (raw char + tapioca + water) Machine depreciation Labor cost Electricity cost Woodfire cost Packaging Transportation

9.70 0.33 0.72 0.31 0.26 0.20 1.67

Total cost Selling price (FOB) Profit

13.19 17.00 22.4%

Outbound

**Conversion Rate: 33 THB = 1 USD

3.1.5 Sensitivity analysis From Table 3, it was clear that major cost of smokeless charcoal production was cost of the raw char accounting for around 70% of the total cost. During the early stage of production setup, raw char supply uncertainty was clearly detected. The incoming raw char was obtained from various sources, either from domestic or imported from Myanmar. The incoming raw char price was between 5-12 THB/kg. The sensitivity analysis was conducted based mainly on variation in possible price ranges of raw charcoal to identify changes in total cost and profits. The result of sensitivity analysis with the range of -30% to +50% changes in raw char price is shown in Table 4. It can be seen that if the raw char price was increased to 150% of the current average price, the company profit would turn negative. The manager should therefore carefully monitor the price of this significant raw material. Table 4. Sensitivity analysis on changed raw charcoal price. Change in raw char price

Raw char price (THB/ kg)

Total production cost (THB/ kg)

Profit (%)

-30%

5.04

10.23

30.82

-20%

6.40

11.59

31.82

-10%

7.20

12.39

27.12

Current price

8.00

13.19

22.41

+ 10%

8.80

13.99

17.71

+ 20%

9.60

14.79

13.00

+ 30%

10.40

15.59

8.29

+ 40%

11.20

16.39

3.59

+ 50%

12.00

17.19

-1.12

**Conversion Rate: 33 THB = 1 USD

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4. Conclusion A cost analysis of a biomass fuel upgrading option has been performed to assess the feasibility of smokeless charcoal briquette production from residues for a local municipality in Mae Hong Son, Thailand. Conversion of agricultural and forestry residues into high value charcoal briquettes has been demonstrated to be cost effective, offering attractive option for local entrepreneurship and promotion of local bio-economy. It was observed that the cost of the raw charcoal was the major variable, critically affecting the company profitability. The price range of this raw material should be carefully monitored and controlled (between 5 to 11.5 THB/kg) to ensure acceptable inbound quality and prevent negative return on investment. Consolidation model of the raw charcoal and alternative biomass sourcing should also be further considered in securing cost and supply for future charcoal briquette production. Acknowledgements Support from Chiang Mai University is highly appreciated. The authors also wish to thank supporting staffs from the Excellence Center in Logistics and Supply Chain Management (E-LSCM) and TNT Global Part. Ltd. for technical assistance. References [1] IRENA. Renewable energy outlook: Thailand. International Renewable Energy Agency, Abu Dhabi (2017). [2] Wongsiriamnuay, Thanasit, Nuttakarn Kunnang, and Nakorn Tippayawong. “Effect of operating conditions on catalytic gasification of bamboo in a fluidized bed”. International Journal of Chemical Engineering (2013) Article ID 297941 :1-9. [3] Punnarapong, Pissanupong, Tawan Sucharitakul, and Nakorn Tippayawong. “Performance evaluation of premixed burner fueled with biomass derived producer gas”. Case Studies in Thermal Engineering 9 (2017) :40-46. [4] Jaroenkhasemmeesuk, Chawannat, and NakornTippayawong. “Thermal degradation kinetics of sawdust at intermediate heating rates”. Applied Thermal Engineering 103 (2016) :170-176. [5] Jaroenkhasemmeesuk Chawannat, and Nakorn Tippayawong. “Technical and economic analysis of a biomass pyrolysis plant”. Energy Procedia 79 (2015) :950-955. [6] Onsree, Thossaporn, Nakorn Tippayawong, Anqing Zheng, and Haibin Li. “Pyrolysis behaviors and kinetics of corn residue pellets and eucalyptus woodchips in a macro-thermogravimetric analyser”. Case Studies in Thermal Engineering 12 (2018) :546-556. [7] Sittisun, Poramate, Nakorn Tippayawong, and Darunee Wattanasiriwech. “Thermal degradation characteristics and kinetics of oxy combustion of corn residues”. Advances in Materials Science & Engineering (2015) Article ID 304395 :1-8. [8] Wongsiriamnuay, Thanasit, and Nakorn Tippayawong. “Effect of densification parameters on property of maize residue pellets”. Biosystems Engineering 139 (2015) :111-120. [9] Piboon, Pimporn, Nakorn Tippayawong, and Thanasit Wongsiriamnuay. “Densification of corncobs using algae as a binder”. Chiang Mai University Journal of Natural Sciences 16 (2017) :175-182. [10] Tippayawong, Nakorn, Prasert Rerkkriangkrai, Pruk Aggarangsi, and Adisak Pattiya. “Characterization of biochar from pyrolysis of corn residues in a semi-continuous carbonizer”. Chemical Engineering Transactions 70 (2018) :1387-1392. [11] Tippayawong, Nakorn, Prasert Rerkkriangkrai, Pruk Aggarangsi, and adisak Pattiya. “Biochar production from cassava rhizome in a semicontinuous carbonization system”. Energy Procedia 141 (2017) :109-113. [12] Suttibak, Suntorn, and Wasan Loengbudnark. “Production of charcoal briquettes from biomass for community use”. IOP Conference Series: Material Science & Engineering 297 (2018) :012001. [13] Globe Newswire. Available at: https://globenewswire.com/news-release/2018/04/30/1489620/0/en/Charcoal-Market-is-Projected-to-Reach-6492-8-Million-by-2023-P-S-Market-Research.html, accessed on 20 Aug 2018.