Indonesia has rich of coconut shell with annual production is 1.3 tons ha -1. The total production of coconuts is reaching 3.2 million tons in 2011. The idea in designing and developing of pyrolysis system is to obtain liquid smoke and reduce agriculture waste as well. Liquid smoke is commonly used for food preservative (tofu and fish) and flavor and likely to latex preservative as well. The first step designing of pyrolysis system is determined the efficiency. We develop pyrolysis system with Ø 0.80 m and 0.8 m high with stainless steel 2 mm as materials. The capacity of the system is 40 kg coconuts shell with 12 hours process and the first condensate at 2 hours. The yield (w/w) of this process is 11.62 % liquid smoke, 2.43 % tar, 75.93 % bio-charcoal and 10.17 % volatile compounds. The temperature of the system is reaching 400°C however it is still unstable. The energy for combustion is from coconuts shell and its estimated equal to 4500 kJ/m3. The efficiency of the system is approximately 23.5 %. The second step, we develop distillation unit for purification of liquid smoke which is necessary for food application. This equipment is running with electrical grid and equipped with automatic thermostat for keeping the temperature stable at 120° C or 150° C. The capacity is 5 liters with stainless steel 2 mm as materials. It takes 12 hours to purify 5 liters liquid smoke. The third step we determined cost for developing this system, it is equal to 1000 USD and Return of Investment (ROI) within 12 months with assumption price of 4 oz liquid smoke is equal to 4 USD. The challenge of this development is energy efficiency. Therefore, modification is needed to increasing energy efficiency, yield of production and stability peak temperature through coating system or insulation.
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