The Malaysian palm oil industry is making notable progress in addressing climate change and sustainability issues
Malaysia is the world’s second-largest producer of palm oil after Indonesia, with an annual output of about 19 million tonnes. However, this thriving industry produces substantial amounts of waste. Each tonne of crude palm oil produced generates approximately 4 tonnes of dry palm biomass and 3.5 tonnes of palm oil mill effluent.
At palm oil mills, the oil extraction process generates palm biomass, including empty fruit bunches, mesocarp fibres and palm kernel shells, as well as palm oil mill effluent. Another major source of palm biomass is the plantation, where oil palm trunks and fronds can be found in abundance.
Don’t miss: Malaysia may strike it rich with rare earth elements
The energy potential of palm oil
Palm biomass and waste products have an incredible potential to be converted into renewable palm bioenergy. This energy could be used to help Malaysia reduce its reliance on fossil fuels.
Palm biomass from palm oil mills alone has an estimated energy potential of about 5000 megawatts (MW)—enough energy to replace almost 40 per cent of Malaysia’s yearly dependence on coal (based on 2021 data). Biogas generated from palm oil mill effluent has an estimated energy potential of 540 MW, which is equivalent to 1.4 per cent of Malaysia’s installed capacity mix (based on 2021 data).
Indeed, the prospect of palm bioenergy is promising as a means to help Malaysia transition to a low-carbon and circular economy. Palm bioenergy could also support Malaysia’s goals of achieving 70 per cent renewable energy and net-zero emissions by 2050.
Despite intensifying efforts to utilise these wastes in the energy sector, most of them remain relatively untapped due to several technical challenges.
Technical challenges
Compared to woody biomass, palm biomass has relatively higher impurity contents such as ash and moisture that can affect the combustion process and efficiency. Innovations in pre-treatment technologies are needed to improve the suitability of palm biomass as boiler fuels. Advanced technologies such as pyrolysis and gasification offer alternative avenues to maximise energy recovery from palm biomass and enhance its fuel properties. However, these technologies are still ongoing areas of research.
Financial assistance from the government such as the Green Technology Financing Scheme could assist banks in supporting companies to venture into green technology while tax benefits such as the Green Investment Tax Allowance and the Green Income Tax Exemption could potentially attract investors and green technology service providers.
The overall logistics involving biomass collection, storage, transportation and traceability add another layer of complexity and cost to the entire process. Malaysia’s recent National Biomass Action Plan 2023-2030 is well-positioned to facilitate the sustainable management and economic development of palm biomass. This plan entails measures such as establishing centralised biomass hubs to streamline the collection, processing and distribution of palm biomass.
Compared to dry palm biomass, palm oil mill effluent is impossible to transport, thus biogas production needs to be carried out at the palm oil mills which are often in rural areas.