In a world’s first, five major players in the palm oil industry have come together to form a biomass joint venture in Lahad Datu, Sabah, Malaysia, which will process oil palm waste into useful feedstock for businesses.
The five companies - Genting Sdn Bhd, Kelas Wira Sdn Bhd, Bell Corp Sdn Bhd, Teck Guan Industries Sdn Bhd and Golden Elate Sdn Bhd - signed the joint venture in late May. The cluster, led by the Malaysian government’s Innovation Agency (Agensi Innovasi Malaysia, or AIM), aims to address gaps in the market between the biomass owners and downstream users such as bio-based chemical refineries.
Organic waste from palm oil plantations and mills such as logs, fronds, kernel shells, and mesocarp fibre can be converted into useful products. These include biochemicals, bioethanol and other green products such as pellets used in power generation. But the absence of an effective collection and processing system on a commercial scale has been an obstacle for the industry.
The new cluster will now enable these companies to tap into the value of their biomass, said AIM, adding that companies from China, Korea, Italy and the United States have shown keen interest in joining the cluster.
Malaysia’s oil palm industry produces over 83 million dry tonnes of solid biomass per year, with the volume expected to increase to between 85 and 110 million dry tonnes by 2020.