Oil palm biomass offers huge potential, RM30bil in income

KUALA LUMPUR: The vision to mobilise maximum utilisation of oil palm
biomass to generate an additional RM30bil in income for Malaysia by 2020
needs to be fully industry-driven and well-supported by the
capabilities and incentives from the Government.
Agensi Inovasi
Malaysia (AIM) executive vice-president and head, strategic
impact-wealth creation, Bas Melssen said that palm oil industry players
must quickly seize the huge opportunity in oil palm biomass, which could
lead to the creation of new downstream operations such as pellets,
biofuels and biobased chemicals, apart from the existing fertiliser,
animal feed, wood products and bioenergy activities.
“We believe
that a concerted effort from the Government, academia and the private
sector, with private investment of about RM20bil to RM25bil cumulatively
within the next five to 10 years, is needed to achieve Malaysia's goal
by 2020,” he told StarBiz.
AIM also envisaged that 66,000 new jobs could be generated from the new high-value downstream operations by 2020, he added.
[You must be registered and logged in to see this image.] Melssen:
‘We believe a concerted effort from the Government, academia and the
private sector, with private investment of about RM20bil to RM25bil
cumulatively within the next five to 10 years, is needed to achieve
Malaysia’s goal by 2020.’
AIM, a statutory body
established under the Prime Minister's Department in April this year, is
the driving force towards establishing an “innovation economy” for
Malaysia to achieve high-income nation status.
It is involved in
preparing the National Biomass Strategy 2020: New Wealth Creation for
Malaysia's Oil Palm Industry, which was recently launched by Prime Minister Datuk Seri Najib Tun Razak, Plantation Industries and Commodities Minister Tan Sri Bernard Dompok and AIM chief executive officer Datuk Dr Kamal Jit Singh.
Melssen
said: “Malaysia currently has an abundant source of oil palm biomass of
about 80 million tonnes, of which less than 10% are being exploited.
“This amount is poised to increase to 100 million tonnes by 2020 from higher yields and replanting activities.”
According
to Melssen, the local industry players could fully exploit the
lucrative biomass source, and also making sure biomass contributes to
creating high-value industries and activities for the nation and instead
of shipping it out or selling it as a commodity where other countries
could benefit instead of Malaysia.
To mobilise Malaysia's biomass
at a competitive rate, only biomass “mobilisable” at below a maximum
US$80 a tonne has been considered. “This will give a potential
competitively mobilisable amount of biomass of 25 million tonnes by
2020,” he said.
To this end, Melssen said the Government had
decided to conduct the national biomass strategy lab, whereby all
stakeholders industry players, academia and relevant Government bodies
would meet next month.
“During the first and second week, all stakeholders will look at new entry point projects (EPPs) involving the oil palm biomass, identifying additional EPPs and also expanding on existing EPPs under the palm oil NKEA (National Key Economic Area).
“At
the end of the month, they will look at identifying potential policy
recommendations on oil palm biomass to the Government,” he added.
Melssen
admitted that currently, many plantation owners were still reluctant to
get seriously involved in new downstream activities, as “there were
still no clear-cut business cases or incentives on how to capture the
opportunities in oil palm biomass, except for bioenergy.”
On the
part of upstream plantation players, AIM suggested they set up special
in-house divisions that focused on how to mobilise their oil palm
biomass efficiently and to develop and manage a portfolio of initiatives
“in the money today” as well as more future focused and higher risk
initiatives.
AIM also recommends having at least five to 10 of
these entities for a truly market-driven environment. Smaller
plantations and private mills could also jointly set up their own
cooperatives to achieve economies of scale to manage their own portfolio
of biomass initiatives.
“Upstream players will need to have a balanced portfolio management.
“They
are strongly encouraged to undertake joint ventures or become
stakeholders in the new downstream activities to capture the real value
that is created downstream rather than just become a supplier to the
downstream operators.
“This is critical to ensure it truly benefits the nation,” Melssen said.
Plantation
owners would then also have the option of choosing the different
portfolios, depending on their investment preference and appetite for
risk.