Malaysia looks to tap palm oil biomass for producing advanced fuels

Malaysia will focus on using biomass created by the palm oil industry as a feedstock for new and advanced fuels, Deputy Minister of Investment, Trade and Industry, YB Liew Chin Tong, said May 2.

The government is looking to bolster the biomass sector by attracting investments and to see biomass as "a necessary enabler for new and high value-added industries," the minister said at an event by the Malaysian Investment Development Authority.

Malaysia, the world's second-largest producer of palm oil, has also made efforts to drive investments into palm oil byproducts as part of its national economic plan called the 12th Malaysia Plan to be implemented between 2021 and 2025, which has outlined biomass as a strategic sector.

However, slow investments since 2019 have challenged efforts to fully utilize its biomass potential, chairman of the Malaysian investment authority, Tan Sri Sulaiman Mahbob, said at the event May 2.

Due to the trend of fluctuating investments in the biomass sector since 2019, we have not met our ambitious target of MR10 billion ($2.1 billion) as set in the 12th Malaysian Plan, Mahbob said.

Currently, the sector has attracted investments worth MR222.9 million, according to recent estimates by the Malaysian Palm Oil Board.

Malaysia churns out about 90 million mt of solid biomass like empty fruit bunches, mesocarp fiber, kernel shells, fronds and tree trunks when producing over 18 million mt of palm oil annually, according to studies by the MPOB.

Traditionally, mesocarp fiber and shells have been used by Malaysian palm oil mills as an energy source but much of the solid biomass is disposed off.

In the last few years, liquid byproducts of palm oil extraction, such as palm fatty acid distillate and palm oil mill effluent, have also seen rising demand from biofuel producers as EU regulations incentivize the use of waste feedstocks for making biodiesel.

Platts, part of S&P Global Commodity Insights, assessed the price of POME FOB Malaysia at $795/mt May 2, down 3.6% on the month.