Source: The Star Online

Published on 11th February, 2012 by Hanim Adnan and Edy Sarif

SUSTAINABILITY is the key to the continued success of Malaysia's thriving palm oil industry.

Currently, there is a steady trend among palm oil operators to advocate sustainability through optimal usage of natural resources and their biomass waste products.

One such company is Felda Group, Malaysia's largest plantation company, which is leading the way in "green" practices nationwide.

Felda Global's green agenda will be further enhanced going forward, says Felda Global Ventures Holdings Bhd group president Datuk Sabri Ahmad, who is an ardent advocate of sustainability and Blue Ocean strategy.

In June last year, he was elected a panel member of the Global Science and Innovation Advisory Committee (GSIAC), one of only four Malaysians in the select group made up of eminent scientists.

Bek-Nielsen: 'We are looking at reducing 25% of fossil fuel usage annually.'

"Green" may yet prove to be gold for Felda, Sabri tells StarBizWeekrecently.

Felda to date has 12 biogas trapping plants, two power plants, six compost plants, two mini-gasifier plants and one fuel pellet plant all utilising biomass waste as the feedstock.

Sabri says Felda will likely help to further drive the national biomass projects, which are believed to have a potential value of RM100mil.

Given its sprawling plantation assets, Felda has huge stocks of oil palm biomass waste from its estate and milling operations.

Of the 15.3 million tonnes fresh fruit bunches (FFB) which go into Felda mills annually, it amasses 3.36 million tonnes of empty fruit bunches (EFB), 1.83 million tonnes of mesocarp and 760,000 tonnes of palm shells. It gets another 6.1 million tonnes of old palm fronds from harvesting and 3,000 tonnes of oil palm trunks from replanting activities.

Felda Jerangau palm oil mill.

In addition, its mills have palm oil mill effluent (Pome) ponds which can be used to capture biogas which is then scrubbed to generate clean methane. Felda can in fact easily generate an additional income of RM35mil annually from the sale of its biomass such as palm shells and mesocarp fibre alone.

Instead, it chose to pursue renewable energy (RE) projects using the oil palm biomass waste products as feedstock to set up "green" projects which is friendly to the environment while creating additional lucrative income for the group.

In 2004, Felda built the Sahabat biomass power plant in Lahad Datu, Sabah, the first EFB-based Clean Development Mechanism (CDM) project in Malaysia and, also, the first in the world that runs on 100%-treated EFB.

According to Felda Holdings Bhd head of biomass Ahmad Nor Azman Jamin, many rural sites in Sabah are not connected to the national electricity grid.

Sabri says Felda will help to further drive the national biomass projects.

"Our intention is to replace the diesel usage with EFB-resources to generate 7.2MW and also 16 tonnes of steam for Felda Global's operational facilities."

The Sahabat biomass power plant, which can produce up to 55,000 tonnes of carbon emission credits (CERs) per year, has started selling CERs to an European buyer since 2006.

Under the Government's Entry Point Project 5 (for biogas), Felda Global is also planning an additional 49 biogas capturing plants.

Of the 49 biogas plants, 35 have been designated to supply electricity which will be hooked to the national grid, says Nor Azman. He adds: "Currently, we are segregating 12 existing biogas plants, with one in Serting Hilir already hooked to the national grid."

Following the Sahabat power plant, Felda Global and Tenaga Nasional Bhd's joint-venture company, FTJ Bio Power Sdn Bhd, is building a RM120mil electricity generation plant in Jengka, Pahang .

Commencing last December, it will generate 12.5 million watts using purely EFB. The EFB feedstock is accumulated from seven out of the eight palm oil mills owned by Felda Global in Jengka.

In addition, Felda has set up a joint venture with Premium Renewable Energy Group whereby it will self-generate 6MW that the plant needs for its operations by utilising the biogas generated by surrounding mills.

Meanwhile, another staunch advocate of sustainability is United Plantations Bhd.

The Teluk Intan-based efficient oil palm plantation group has set up biomass reciprocating boiler and biogas plants.

The main goal is to supply steam and electricity power to United Plantations' mills and refineries, thus cutting down both on fossil fuel costs and the emissions of CO2, says vice-chairman and executive director (corporate affairs) Datuk Carl Bek-Nielsen.

"We are looking at reducing 25% of fossil fuel usage annually at our plantations in Perak by relying on electricity generated from our biogas plants."

He says it is the group's commitment to reduce its "carbon footprint" and therefore, its greenhouse gas emissions remain a high priority to which new initiatives and important investments will continue going forward.

United Plantations' biomass reciprocating boiler and biogas plant, since their start-up in 2006, have contributed immensely towards mitigating CO2 and methane emissions.

"We envisage that with the various initiatives undertaken since 2006, our group's carbon footprint per tonne of refineed palm oil produced will be reduced by 35% by the end of 2012 compared with the pre-2005 levels," adds Bek-Nielsen.

Currently, United Plantations has three biogas plants in the country.

He says: "Although it is costly to set up a biogas plant, the impact that we receive is really worth it."

The cost of building a biogas plant is about RM7mil and the group has invested RM20mil in its existing three plants.

Within the next one to two years, Bek-Nielsen says, United Plantations is planning to add more biogas plants in Malaysia and Indonesia.

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