Malaysia to See More Investment Potential in Biomass

The EU-Asia Biomass Best Practices and Business Partnering Conference 2012 was recently organised in Kuala Lumpur, Malaysia (7 to 10 May 2012). The event was funded by the European Union’s Switch Asia, which is an environment programme whose objectives is to promote sustainable consumption and productions amongst small and medium sized enterprises (SMEs) and consumer groups in the Asian region.

The conference strived to create a platform, bringing together both local and international biomass stakeholders and share the best practices and case studies of biomass utilisation in the core areas of bioenergy, biofertilisers, high value chemicals, biofuels and other eco-products. At the same time, the conference organised a business match-making session to stakeholders who are seeking to create new partnerships opportunities.

The Minister of Energy, Green Technology and Water, Datuk Seri Peter Chin Fah Kui , who officiated the conference has noted that Malaysian biomass products are anticipated to receive trade enquiries amounting to RM300 million (USD 100 million). This projection was based on the number of participants from the EU and also local SMEs present at the business match-making programme during the conference.

This new development certainly augurs well for Malaysia’s policy on the utilisation of biomass, in particular for oil palm biomass. The country’s new National Biomass Strategy was launched in November 2011 and it is expected to create RM30 billion (USD10 billion) in new income by 2020. In addition to this, the strategy will also create 66,000 new employment opportunities, of which 40,000 of them will be under the highly-skilled category.

In addition to this, the Government has recently launched the 1Malaysia Biomass Alternative Strategy (1MBAS) Initiative in March 2012. This is geared to reinforce the strategic implementation of the National Biomass Strategy by developing more investment partnerships in the biomass industry. It will then bring forth new income generation and also create more employment opportunities in the sector. The implementation of both policies would be coordinated by the Malaysia Innovation Agency, which is a statutory body set up by the Government via the Agensi Inovasi Malaysia Act 2010 and whose main purpose is to be the ‘driving force behind Malaysia’s push towards establishing an “innovation economy” and the country’s aspirations of achieving a high-income nation status.’

Malaysia has the potential of deriving biomass from its agriculture sector, which contributes around 11% of the country’s Gross National Income (GNI). From the variety of agriculture crops produced, oil palm has the biggest opportunity in providing the biomass source. According to the National Biomass Strategy report, the Malaysian palm oil industry contributes the largest amount of biomass, estimated to be around 80 million dry tonnes, (a figure that is consistent with MPOC’s own estimate) The report further stated that this amount is estimated to reach 100 million tonnes by 2020, which will no doubt provide producers with sufficient motivation to utilise these biomass in a more ‘innovative’ manner, along with its current form of conventional usage as an organic fertiliser compound in the fields. Certainly, biomass applications for the bioenergy, second generation biofuels, wood products, pellets and biobased chemicals can now be more achievable.

Affirmative actions have also been taken by the Malaysian Government to expedite the development of renewable energy (RE) in the country. The formation of the Sustainable Energy Development Authority (SEDA), whose main function is to ‘administer and manage the implementation of the Feed-in Tariff (FiT) mechanism mandated under the Renewable Energy Act 2011’, the availability of financial assistance through the Government’s Green Technology Financing Scheme (GTFS) and also the decision to increase the FiT rates for renewable energy from biomass can only spur the use of oil palm biomass as a source of sustainable energy. In a recent interview with the Star (Malaysia) newspaper, Tan Sri Dr Fong Chan Onn, the SEDA Chairman commented that ‘the reducing price trend of RE technologies and the eventual subsidy rationalisation by the Government will create a conducive environment for RE to grow in a more sustainable manner.’ Therefore, this provides more reasons for investors to seriously consider the opportunities present so as to reap the potential financial returns.

Finally, it is also important to note the positive impact that oil palm biomass-powered renewable energy will provide in mitigating climate change, as its greenhouse gas (GHG) emissions is minimal, compared to conventional fossil fuel energy. The generation and utilisation of oil palm biomass will not only reduce the producer’s GHG emissions (and thereby contributing a smaller carbon footprint for its processes and products); it will also help the country to meet its target of voluntarily reducing its CO2 emissions up to 40% by 2020 (this was pledged during the 2009 Copenhagen climate change summit, or UNFCCC COP 15). Thus, renewable energy from oil palm biomass provides a window of opportunity for the palm oil industry to contribute towards the reduction of GHG emissions of the country. Therefore, now could be a better time to explore the multitude of investments potential that oil palm biomass has to offer.

Recommended Additional Reading

1. EU-Asia Biomass Best Practices and Business Partnering Conference 2012 Conference Catalogue

2.‘Biomass conference starts tomorrow’, Business Times, 7 May 2012,

3. ‘Malaysia’s products expected to see high response at EU-Asia biomass conference’, BERNAMA, 8 May 2012,

4. ‘National Biomass Strategy to generate RM30b by 2020’, The Edge, 22 November 2011,

5. Agensi Inovasi Malaysia official website,

6. National Biomass Strategy 2020: New wealth creation for Malaysia’s palm oil industry, Agensi Inovasi Malaysia,

7. FY Ng, FK Yew, Yusof Basiron, Kalyana Sundram (2011), ‘A Renewable Future Driven with Malaysian Palm Oil-based Green Technology’, Journal of Palm Oil and the Environment (JOPE)

8. Sustainable Energy Development Authority (SEDA) official website,

9. ‘Your 10 questions with Tan Sri Dr. Fong Chan Onn’, The Star, 12 May 2012,

10. ‘UK lauds Malaysia’s pledge to cut carbon emissions’, The Star Online, 18 December 2009

11. Malaysia – Second National Communication to the UNFCCC

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