One of the progressive initiatives of the palm oil industry is the target to get all palm oil mills installed with biogas capture facilities for utilisation to eliminate methane gas released into the atmosphere.
The industry has been regulated by Malaysian Palm Oil Board (MPOB), which is imposing the mandatory installation of biogas trapping or methane avoidance facilities in palm oil mills as a condition for any new mill construction or existing mills applying for throughput expansion in the country.
It is envisaged that this will eventually lead to a nationwide implementation of biogas facilities in all palm oil mills. Sarawak Oil Palm Plantation Owners Association (SOPPOA) fully supports the government’s initiative on this point.
“The utilisation of the biogas for generation of electricity for supply to the main grid in Peninsular Malaysia is being successfully implemented with tariff payment to the mills,” the association said in a statement yesterday.
“However, Soppoa would like to draw attention that the existing conditions in Sarawak is very different from that of Peninsula Malaysia in terms of infrastructure developments, legal implications as well as tariff considerations.”
Foremost, it said gridlines in Sarawak are still lacking which includes infrastructure for feed-in capability into the power grid for utilisation of power supply generated from palm oil mills in the State,as well as infrastructure for electricity supply to rural areas.
“Also, a significant number of mills are located in remote locations, which are quite a distance away from the main grid. Therefore, this could result in high implementation costs,” Soppoa underscored.
Secondly, the supply of electricity in Sarawak comes under the purview of Sarawak Energy Bhd (SEB) which oversees all power generation for domestic and industrial utilization. The cost of power generation by SEB in Sarawak is low, probably significantly below cost of production from palm oil mills.
Therefore, the industry will have to negotiate for a mutually acceptable feed-in-tariff rate with SEB.
To date, the palm oil industry had invested substantially in 67 palm oil mills in Sarawak.
To implement the biogas capture facilities, the mill owners in Sarawak will have to invest an aggregate capital outlay in excess of RM600 millions without the possibility to recoup its investment costs at the current situation.
“As such, Soppoa is requesting for the government to consider granting the industry in Sarawak a further five years for the implementation of biogas capture in view of the existing conditions here.
“To build the infrastructure to capture biogas is a costly undertaking while the biogas generated power is unable to be sold or utilized here which results in almost zero returns for investment.
Accordingly, Soppoa also called for the government to consider including infrastructure for feed-in-capability into the state grid under the 11th Malaysia Plan.
“We also call on them to include non-grid power generation infrastructure to supply electricity to rural communities under the Rural Electrification Schemes under the 11th Malaysia Plan,” it added.
“We also ask the government to allow for the setting up of small industries near biogas plants to tap into the power generation which will greatly benefit rural communities.
“For the current situation, the industry is requesting for the government to defer the implementation of biogas capture facilities in Sarawak to 2025 when the infrastructure for the electricity grid could be ready as well as for the industry to be more financially stable.”
