Sustainability’ Challenges and Opportunities ‘Towards

The Way Forward for Malaysia Biomass Industries: Updates, Challenges and Opportunities

Presented by:

Dato’ Leong Kin MunPresident, Malaysia Biomass Industries Confederation (MBIC)

ACCCIM ITI Roundtable 2015 • 28 March 2015

‘Towards Sustainability’

PRESENTATION OUTLINE

• Malaysia Biomass Industries Confederation (MBIC)

• Status of Biomass Industry in Malaysia

• Best Practices of Industry

• Success Stories of Biomass Ventures

• Challenges/solutions

Malaysia Biomass Industries Confederation (MBIC)• Formed in 2012 as legacy of the EU-Malaysia Biomass

Sustainable Production Initiative (biomass-sp.net), a development cooperation programme between the European Union (EU) and Malaysian Government (2010 – 2013)

• Main objective: to promote a growing and sustainable biomass industry in Malaysia as well as the ASEAN region

• Seeks to represent industry players in Malaysian biomass industry especially the small & medium companies (SMEs)

• Strive to achieve economic and environmental sustainability in Malaysia via adoption of Sustainable Consumption & Production principles

• MBIC website - www.biomass.org.my

Malaysia Biomass Industries Confederation (MBIC)MBIC ACTIVITIES• Annual Biomass Asia Conference

– www.biomass-asia.org• Business Networking Seminar• Dialogue with Government Agencies

– MPOB, MIGHT, KeTTHA, MIDA, Greentech Corp, MITI• Information Sessions to Bankers & Investors

– Association of Banks in Malaysia (ABM) / Malaysian Business Angel Network (MBAN)

• Linkages with Universities & Technical Experts– UPM, UKM, USM, UTHM, UTP, China-ASEAN Technology Transfer Centre

(CATTC), etc.• Overseas Promotion of Malaysian Biomass Industry – via

international conferences– EU, China, Indonesia, Singapore, Thailand, Korea, Japan

Status of the Biomass Industry in Malaysia

Million Metric Tonnes (wet)

Status of the Biomass Industry in Malaysia

Million Metric Tonnes (wet)

Availability vs. Accessibility

Utilization of Biomass in Malaysia

Benchmarking Biomass Utilization Value

Policies, Strategies & Actions by Government

Policies, Strategies & Actions by Government

Palm Oil Industry

Biogas power generations

National Biomass Strategy

Malaysian Biomass Industry

Action Plan 2020

Bio-conversion of biomass into high value chemicals & liquid fuels

Feed-in-tariff for renewable energy

generation

Green technology financing schemeUSD1 billion in subsidized loans

Investment tax incentives for green ventures in

Malaysia

Promote high value utilization of biomass by small & medium companiesDevelopment of

market players & technologies for

biomass pellets & biochemicals

Generation of power to national electricity grid via

biogas from effluent waste

Policies, Strategies & Actions by Government

Policies, Strategies & Actions by Government

1. MAKING THE BUSINESS CASE

2. SMART UTILIZATION OF BIOMASS

3. VALUE CHAIN APPROACH

3. VALUE CHAIN APPROACH

CASE 1 : SIME DARBY BHD.

CASE 2 : TECK GUAN BHD.

CASE 3 : WARIS NOVE S.B.

CASE 4 : CHE METAL WORKS S.B.

CASE 5 : MTS FIBROMAT S.B.

CASE 6 : BIOTECHNOLOGY DIVERSIFIED INDUSTRIES S.B.

CASE 7 : GREENEARTH INTERNATIONAL S.B.

CHALLENGES

1. Access to biomass feedstock at - volume & pricing• Current agricultural practice – return palm

biomass (EFB) to field• No commodity market for biomass trading• Remote locations of biomass sources - high cost of

transportation esp. with high moisture content• Biomass owners not favorable to long-term supply

contract due to rising demand & pricing of biomass

SOLUTIONS

• MyREMap• Establish a Joint Venture with feedstock

owners• Consultation with MBIC

CHALLENGES

2. Access to financing for biomass ventures• Local financiers not familiar with biomass industry • Biomass feedstock supply & pricing risks• Comparative high investment for SMEs

SOLUTIONS

• Government grants• Briefing to banks• International green funds

CHALLENGES

3. Lack of support from domestic market• Switch to sustainable production not

complemented by sustainable consumption locally

• Most biomass products are for export market to meet demand for premium ‘green’ products

• Local green procurement initiatives slow to be realized due to various barriers

SOLUTIONS

• Market-driven approach in developing the industry– Export vs. local market– MyHIJAU Programme

• Support and promote sustainable production and consumption of green products and services via four subprogrammes: MyHIJAU Labeling, Directory, Procurement and Industries

– Services Export Fund (MATRADE)• RM300mil to promote market research/feasibility study for

products/services catered for overseas market

CHALLENGES

4. Commercialisation of local technologies• Gaps between R&D and commercialization - pilot

or demo • plant, lack of market-focused R&D, lack of multi-

disciplinary approach to commercialisation• Local market & financiers risk-averse to local

technologies & products

SOLUTIONS

• Grants from the government– (MTDC, MOSTI, MIDA

• IP Financing from MyIPO

CHALLENGES

5. Sustainability requirements & certifications• Existing and future requirements on biomass from

sustainable sources esp. contentious issues on exploitation of primary forests and peatland

• Lack of local standards & certifications in biomass feedstock and products

• Low awareness and slow adoption of carbon footprinting to influence business decisions on sustainability

SOLUTIONS

• Engage with certification schemes• ‘A-stage’ planning

CHALLENGES

6. Low-value utilization of biomass by local companies• Existing biomass ventures mostly in production of

commoditybased products e.g. fibers, compost & fuel pellets

• Lack of access to the right technologies to create higher value from biomass feedstocks such as eco-products, biochemicals & polymers

• Lack of technical capacities of local companies esp. small and medium ones to adopt and apply high technologies in their ventures

SOLUTIONS

Low-Hanging Fruit(mass market)

High-Value Products (niche market)

vs.

• Off-set agreement by foreign Technology Providers

Biomass Value Chain: 4 Major Directions

Bioenergy

BiofuelsBiomass power plantBiogasPellets, briquettesCDM fuel-switching project

BioAgricultureBiofertiliserAnimal feedCompostingAqua-feed

Eco-products

Pulp and paperBiocompositeBiopackagingActivated CarbonBio-engineering

Biochemical

BiosugarLactic acidPolylactic acidFood additivesZeolite & catalyst

Value

Time

THANK YOU!Q&A

lkmun@biomass-sp.net