Malaysia’s biomass potential

This post is based on an article by Nurhidayati Abd Aziz and Dato’ Leon Kin Mun, BiomassSP published in April 2012 in  BE-Sustainable magazine.

As one of the countries with active agricultural activities and one of the largest producers of palm oil, Malaysia is blessed with abundant biomass resources which can be converted into alternative energy or useful eco-products. However, even though government policies and market incentives have been put in place to support the use of green technology in the industry, the uptake of biomass commercialisation needs further intervention.

Annually, a minimum of 168 million tonnes of biomass waste is generated in Malaysia. In general, palm oil waste accounts for 94% of biomass feedstock while the remaining contributors are agricultural and forestry by-products, such as wood residues (4%), rice (1%), and sugarcane industry wastes (1%). By 2010, up to 4.5 million hectares of land is cultivated with oil palm, which translates to 13.6% of the country’s total land area. The palm oil industry generates an abundant amount of by-products, especially through its processing. With more than 423 mills in Malaysia, this industry generated around 80 million dry tonnes of biomass in 2010.

Out of palm oil processing yield, only 10% are finished products i.e. palm oil and palm kernel oil, and the remaining 90% are harvestable biomass waste in the form of empty fruit bunches (EFB), palm kernel shell (PKS), palm oil mill effluent (POME), and palm kernel cake (PKC).

Oil palm residues after oil extraction at mill

The majority of the oil palm biomass is left on the fields ( i.e. palm fronds) or returned to the fields as soil amendment or organic fertilizer (i.e. empty fruit bunches). This biomass plays an important role to ensure the sustainability of plantations and preserve soil fertility. However there is also the potential to utilise a share of this biomass for a variety of additional end uses, including, pellets, bioenergy, biofuels and biobased chemicals, without depleting the soil.

A National strategy for the sustainable deployment of this untapped potential

Several initiatives are being implemented to promote the sustainable utilization of the Malaysian biomass potential. In November 2011 the Malaysian Innovation Agency published a National Biomass Strategy which focuses on oil palm biomass as a starting point and may later be extended to include biomass from other sources.

According to the National strategy, from a supply-side perspective, by 2020 Malaysia’s palm oil industry is expected to generate about 100 million dry tonnes of solid biomass. This includes not only the empty fruit bunches (EFB), mesocarp fibres (MF) and palm kernel shells (PKS), but also the oil palm fronds and trunks. Excluded from this figure is palm oil mill effluent (POME).

Converting the POME into biogas for either powering the mills or selling power into the national grid would potentially allow for an increase of power capacity of 410 MW by 2030. This initiative alone would reduce the nation’s carbon dioxide (CO2) emissions by 12 percent and free up significant biomass for higher value-added uses.

Assessing the logistic costs related to the mobilization of oil palm biomass, the strategy document concluded that an amount as high as 25 million tonnes of biomass could be mobilised at globally competitive costs, i.e., at a cost of less than RM 250 (62,5 €) per dry-weight ton. Approximately 12 million tons of solid biomass will likely be utilised for non-fertiliser uses by 2020, primarily for wood products and bioenergy, while an additional 20 million tons could be mobilised for pellets, biofuels and biobased chemical industries. In total, this is approximately 30 percent of the solid biomass the palm oil industry is expected to generate annually by 2020.

Pellets is a natural entry point, however the biggest long-term opportunity for Malaysia is in bio-based chemicals, with a forecasted global market size of RM 110–175 billion (27,5 – 43 billion Euro) by 2020.

Mobilization of biomass with regards to logistics and competitive costs will be a critical success factor to ensure globally competitive costs. This is why the strategy relies on the creation of cooperative structures to enable smaller plantations and small holders to enter into the global biomass market. To achieve this, so called Entry Point Projects (EPP) are foreseen. Two new EPPs have already been defined for pelletisation capacity and the launch of an industry consortium to catalyse development of conversion technologies. In addition, two existing palm oil EPPs have been expanded in scope. Finally, a set of Government policies are in the process of being finalised to reduce the risk to the private sector associated with accelerating this opportunity.

Not just palm oil biomass

In addition to palm oil biomass, it is estimated that 1.975 million m3 of wood residues are generated every year in Malaysia. However, although the amount of residues obtained from the processing mills is considerably high there are a lot of competing uses for wood residues i.e. particleboard and medium density fibreboard production, furniture-making, and power generation.

In response to the growing market for biomass as energy to generate heat or power, increasing number of companies in Malaysia are venturing into production of biomass pellets and briquettes for the export market such as Europe, Japan, Korea, and China.

Apart from producing biomass as solid biofuel, many companies are also recognising the cost- and energy-saving benefits of using biomass to generate heat and power for their own production. To encourage the uptake of biomass as renewable energy resources, Malaysia is providing many incentives to support the industry such as Investment Tax Allowance or Pioneer Status where companies are exempted from income tax for a certain period of time. Similarly, under its Economic Transformation Programme (ETP), biogas trapping and utilisation as energy is identified as one of the National Key Economic Areas (NKEAs) to encourage palm oil mill owners to take up methane capturing from their POME as CDM projects (PEMANDU, 2010).

Recently the Energy Commission of Malaysia has announced plans to boost the share of renewable electricity to 5.5 percent by 2015, compared with less than one percent currently.

Visit BiomassSP and watch these videos to find out more about solid biomass in Malaysia.

Cumulative Renewable Energy Capacity Target for Solid Biomass (MW). Source


By 2020, solid biomass will increase to 85-110 million tonnes, POME to 70-110 million tonnes. Source

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