Fast-Tracking Bioenergy Industry Development in Malaysia: Feedstock Availability, Policy

Transcription

1 Fast-Tracking Bioenergy Industry Development in Malaysia: Feedstock Availability, Policy Frameworks, and Future Plans Dato Leong Kin Mun, Technical Advisor EU-Malaysia Biomass Sustainable Production Initiative (Biomass-SP) 2nd Biomass & Pellets Update February 2012, Bangkok, Thailand

2 The Project A development cooperation project funded by the European Union (EU) under the SWITCH-Asia Programme, jointly promoted by the Malaysian Industry Government Group for High Technology (MIGHT), the Association of Environmental Consultants and Companies of Malaysia (AECCOM), the European Biomass Association (EUBIA), and the Danish Technological Institute 1 of 16 approved projects from 350 proposal from EU and Asia under SWITCH-Asia Programme To assist Malaysian SMEs in the biomass industry to implement sustainable production (SP) models and link them to the EU and global value chain, as well as to contribute towards global climate change mitigation effort.

3 Biomass resource potential 4.7 million ha cultivated with oil palm (13.6% of the country s total land area) 421 mills operation only 20% crude palm oil and 3% palm kernel oil and 3% palm kernel cake, 74% by-products (wet biomass) Wood residues aplenty but a lot of competing uses e.g. furnituremaking & particleboard Biomass resource potential 1% 1% 4% Oil palm Wood Rice Sugarcane 94%

4 Biomass industry: Opportunities Palm biomass 90% Palm 70 of mil total t/year biomass EFB, PKS, OPF, OPT, mesocarp fibre, POME Rice husk mil Rice t/year husk rice husk production Woody biomass Woody 2.1 mil biomass t/year Municipal solid waste Municipal 7.7 mil t/year solid MSW waste

5 Oil palm biomass in 2010 No. Biomass Amount (dry weight) 1. OPF (from pruning activity) OPF (from replanting activity) million tonnes 3.28 million tonnes 2. OPT (~5% replanting rate) 33,299,000 trunks 17.5 million tonnes 3. From the 421 palm oil mills operating at total capacity of million tonnes of FFB, ~ Estimated EFB = 22% x 92 million tonnes million tonnes 4. Mesocarp fibers 7.73 million tonnes 5. Palm kernel shells 4.46 million tonnes 6. POME generated from per tone of FFB is about 67%. 62 million tonnes ** ** (million M 3 ) Source: Anis Mokhtar et al (2010), Oil Palm Biomass Products and Comemrcialisation, MPOB

6 Palm oil industry in Malaysia the big picture Palm oil plantation % owned by private estates and government/state-owned schemes, 10-15% by independent smallholders Palm oil processing % owned by private / listed / government-linked companies, 35-40% owned by independent palm oil mills FELDA single largest palm oil player in Malaysia; 17.7% of total planted area, and contribute up to 20% in palm oil production

7 Government initiatives related to biomass/green technology National Green Technology Policy 2009 Green technology as driver to accelerate national economy and promote sustainable development 10 th Malaysia Plan Renewable Energy (RE) Act 2011 and F-i-T mechanism 985 MW of RE by 2015 (15.5% of energy mix) Economic Transformation Programme (ETP) Developing biogas facilities at palm oil mills as part of the National Key Economic Area (NKEA) Renewable Energy Roadmap RE Act implements F-i-T and RE Fund to cover the cost of the mechanism Establishment of dedicated Implementation Agency - SEDA Malaysia Biomass Initiative (MBI) Special Purpose Vehicle for Aggregation, Consortia, etc. Will play crucial role of long-term sole purchaser and supplier of palm waste biomass promoted by MIGHT, Global Science Innovation Advisory Council (GSIAC), and BiotechCorp

8 Recent development National Biomass Strategy 2020 Spearheaded by Agensi Inovasi Malaysia and MIGHT Creation of RM 30 billion GNI impact, mobilising up to 30 million tonnes of oil palm biomass, 60,000 new jobs by EPPs under NKEA; Pelletisation capacity, Oil palm biomass centre, Biogas at palm oil mills, and Oleo derivatives

9 Recent development cont. Year 2011/ / /14 Quota 190 MW 180 MW 250 MW 50 MW solar 30 MW biogas and hydro 80 MW biomass RM /kWh RM /kWh Renewable Energy Act and Sustainable Energy Development Authority (SEDA) Act 2011 National Feed-in-Tariff (FiT) system, guaranteed access of RE to the grid with favourable price setting per unit of renewable electricity

10 Value-adding bioenergy ventures with CDM/VCS CDM (Clean Development Mechanism): Indirectly supports IRR/ROI of RE development projects reduction of carbon emissions are registered and verified as certified emission reductions (CERs) and traded for with Annex 1 parties under the Kyoto Protocol/United Nations Framework for Climate Change Convention VCS (Voluntary Carbon Standard): focuses on GHG reduction attributes only and does not require projects to have additional environmental or social benefits. The approved carbon offsets are traded as Voluntary Carbon Units (VCUs) and represent emissions reductions of 1 metric tonne of CO2

11 Incentives for Biomass Industry BioNexus Status companies enjoy attractive tax incentives, supporting programs to venture into global market, and Bills of Guarantees provided Green Lane Facility under SME Corp for innovative SMEs 2% interest rebate for approved loans and tax deduction to get 1-innoCERT Green Technology Financing Scheme for producers and users of green technology Pioneer Status and Investment Tax Allowance tax exemption of 100% statutory income for 10 years for biomass utilisation in energy generation or recycling of biomass to high value-added products

12 Funding for biomass commercialisation TechnoFund (MOSTI) a bridging fund to address the funding gap between earlier basic research and commercialisation. Up to RM 5 million (RM 40 million boost for Year 2012) Commercialisation of R&D Fund (MTDC) for universities Commercialisation of R&D output from public and private universities up to RM 500k RM 4 million Business Start-Up Fund (MTDC) to fund new startup technology-based company up to a maximum of RM 5 million

13 Funding for biomass commercialisation (cont.) Cradle Investment Programme (Cradle Fund) funds development of prototype to facilitate commercialisation - CIP Catalyst (pre-seed fund: RM500k), CIP 500 (commercialisation fund:rm500k, 2 applications/company) 1-innoCERT (SME Corp) innovation certification to develop innovative SMEs; opportunities for innovation coaching programme and SME Innovation Award which offers RM1 million to the Top Most Innovative SME Machinery loan by OCBC (4%), Project financing (Bank Pembangunan, CIMB), Soft Loan Schemes for SMEs by Agro Bank and MIDF (4%)

14 Funding for biomass commercialisation (cont.) RM500 million Commercialization Innovation Fund to assist SMEs in commercialising research products as announced in Budget 2012 MyCreative Venture Capital initial fund of RM200 million to increase technological innovation and creativity among the youth (Budget 2012) Green Technology Financing Programme (MDV) contract financing for green certified companies from RM250k to RM2mil Green global supply chain opportunities for low carbon product

15 Funding for biomass commercialisation (cont.) Life Sciences Capital Fund (VC) specialise in early stage investments in agriculture, industrial and healthcare biotechnology Malaysian Debts Venture Bhd funded a large Malaysian Debts Venture Bhd funded a large scale CDM InnoWorks Scheme project under Inno Integrasi that promotes integrated waste management and bio-organic fertilizer plants for adoption by palm oil mills; amounting to RM100 million

16 Funding for biomass commercialisation (cont.) Bio-Technology Venture Fund worth US$100mil (RM317.63mil) to boost the country's biotech industry, to be administered by BiotechCorp for biotech companies operating in Malaysia.

17 Challenges in the Biomass Industry Aggregation / collection of biomass Are the wastes and residues economically viable; depends on ease of collection and whether projects can be developed near source of supply logistic costs are major barrier Access to financing for commercialisation Funding and schemes available but approval depending on Financial Institutions decision based on the 5Cs (Credit, Collateral, Capacity, Character, Condition) Conversion technology EFB pelletisation, converting biomass to sugar and ethanol yet to be commercially proven Projects may fail due to pricing issue for high technology

18 Challenges in the Biomass Industry-2 Uncertainties of long term biomass supply (difficult to secure long term fuel supply agreement & pricing mechanism, logistic and transportation cost Inconsistency of biomass fuel quality EFB requires pre-treatment to increase efficiency Technical & financial issues related to grid connection for biogas methane capture projects

19 Competitive use of biomass Survey by MPOB/KPPK in 2007 on 100 mills Source: Malaysian Palm Oil Board & Ministry of Plantation Industries & Commodities

20 Benchmarking the values of biomass products Product Raw material Feedstock Availability Value RM/MT Resource Efficiency (million MT/year) (1:1) Sugar derivatives Activated carbon EFB PKS % from wet EFB Pulp EFB Fiber mat EFB /m 2 Animal feed OPF :1 Particle boards OPT /m 2 1.5:1 Compost/ fertiliser EFB + POME (vermicompost) Pellets EFB : % EFB Briquette EFB + PKS :1 (70% EFB, 30% PKS) POFF EFB :1 Source: Compiled by Biomass-SP from MPOB, MARDI, Biotechcorp, etc.

21 The way forward Value Biochemical Eco-products Biosugar Energy Biofuels Biomass power plant Agriculture Biofertiliser Animal feed Composting Pulp and paper Biocomposite Biopackaging Lactic acid Polylactic acid Food additives Zeolite & catalyst Biogas Pellets, briquettes CDM fuel-switching project Time

22 Thank You Q&A Session

23 EU-Asia Biomass Best Practices and Business Partnering Conference May 2012 at Putra World Trade Centre (PWTC) Invited 100 regional speakers Areas of focus: biomass as energy, biomass as high value chemicals, and biomass as eco-products Business Matching Event Participation from more than 300 biomass stakeholders during the official launching! Serious EU biomass companies (investors, buyers, technology providers etc) looking for business collaboration with Malaysia will be granted Travel Incentive EUR 800 (travel from Europe to Malaysia)

24 Types of potential collaboration Import/Export Joint Venture Joint Production Contract Research Joint R&D Technology Licensing Technology Transfer Project Financing Proprietary Consultancy Carbon Credit Trading CDM Development Distributorship/Marketing Services Green Procurement Venture Capital

25 Potential areas of collaboration Buyers meet Sellers Consultants meet Clients Entrepreneurs meet Venture Capitalists Exporters meet Importers Foreign Investors meet Government Officers Investors meet Marketers Vendors meet Procurement Officers, etc. Researchers meet Marketers Researchers meet Researchers SMEs meet Multi- National Companies SMEs meet SMEs Suppliers meet Distributors Traders meet Manufacturers

26 Potential areas of collaboration - 2 Italian buyer look for bio-composite products made of rice husk Dutch and Italian buyers search for palm biomass pellets and wood pellets EU investor interested to invest in wood pellets production plant EU utility company interested to invest in biomass power plant French company is interested to invest in methane capture biogas projects EU carbon brokerage companies are searching for carbon financing deals. EU companies interested to buy palm kernel shell (PKS)

27 Potential areas of collaboration - 3 EU carbon credit compliance buyer interested to buy carbon credits Dutch buyers are looking for biomass briquettes Bio-ethanol production business proposal from EU company based in Asia Torrefaction technologies provider for wood pellets from Netherlands are looking for collaboration in Malaysia Enquiries of palm-based biochemicals Potential R&D projects collaboration on bio-fertilisers, energy pellets, bio-chemicals, waste-to-wealth, etc. Investment proposal for Jatropha projects

28 Business Match-Making Scenarios Scenario 1 XYZ Science & Technology Institute, a research and development (R&D) institute based in Europe, entered a joint R&D collaboration worth 5 million with a local SME to set-up a pilot project for ethanol production from palm biomass in Malaysia. Scenario 2 Biocharcoal Sdn. Bhd. entered an agreement with an Italian company to supply PKS to their biomass power plant worth 20,000-22,000 tonnes per shipment

29 Business Match-Making Scenarios - 2 Scenario 3 ABC Bioenergy Trade, a Danish bioenergy trading company interested to buy briquettes from local SMEs in Malaysia. Scenario 4 PDF Energy, an EU utility company interested to invest in a MW biomass power plant project in Malaysia.

30 Palm oil & rice millers Wood-based biomass producers Biomass collectors & transporters Solid biofuel manufacturers Biomass & biomass products traders Commercialisaton entrepreneurs Biogas technology providers Biomass power plant developers Biochemical technology producers Carbon credit brokerage companies & carbon fund managers Certification companies Logistic/freight forwarders companies Biocomposite producers Eco-friendly produces & green building materials Biofertiliser producers Renewable energy technology providers Biochemical producers CDM project developers/investors Venture capital companies and financial institutions Equipment, machinery and lab facility providers

31 Serious EU biomass buyers/traders/technology providers/investors may consult Biomass-SP as your focal point to trade biomass in Malaysia: EFB, pellets, PKS, woodchips, biocharcoal, briquettes, investments in biomass power plants, etc. For further information T: F: E: