NATIONAL BIOMASS STRATEGY 2020 - Eclareon · · 2015-09-16NATIONAL BIOMASS STRATEGY 2020: ... Sarawak State Government, State Planning Unit and its agencies to develop a biomass

NATIONAL BIOMASS STRATEGY 2020:CAPTURING THE BIOMASS OPPORTUNITY

“Importance of Sustainable Feedstock and Product Strategy”

Copyright 2012-2015 by Agensi Inovasi Malaysia. All Rights Reserved.

CONFIDENTIAL DRAFT – NOT FOR DISTRIBUTION

1

This document was prepared by Agensi Inovasi Malaysia (AIM) with

the purpose of providing information about the National Biomass

Policies and Strategies in Malaysia for the Information Event in

Frankfurt, Germany on 15 September 2015.

The possible future development of projects illustrated in this

presentation are subject to change at any time for any reason without

notice. This presentation is for discussion purposes only and should

be viewed solely in conjunction with the oral briefing provided by AIM.

Neither this presentation, nor any of its contents may be used for any

other purpose without the prior written consent of AIM.

DISCLAIMER



2

Agensi Inovasi Malaysia (AIM), Malaysia’s National Innovation Agency under Prime Minister’s

Department is a statutory body created to jump start wealth creation through knowledge, technology and

innovation to stimulate and develop the innovation eco-system in Malaysia. We lay down the foundation of

innovation that inspire and produce a new generation of innovative entrepreneurs.

ABOUT AGENSI INOVASI MALAYSIA (AIM)


Under the Agensi Inovasi Malaysia

Act 2010, AIM is administered by a

Governance Council (GC) that

gives inputs and go-ahead for AIM’s

direction, policies and initiatives.

There are 17 members in the GC,

led by the Malaysia’s Prime Minister

as Chairman. Members of the

Council are appointed by the Prime

Minister, with each member serving

the Council for a term not exceeding

three years. The reappointment of a

member is limited to three

consecutive terms.



CONTENT

3

1MBAS Unit - NBS 2020 Delivery Unit

Biomass Availability and Malaysia’s Potential

Update and Progress

Context and Objectives: Collaborative and inclusive effort to define the National Biomass Strategy 2020



4

NATIONAL BIOMASS STRATEGY 2020 LAUNCHED IN 2011:

A NATIONAL STRATEGY ON BIOMASS UTILISATION



OBJECTIVE OF THE NBS2020

5

Create a national strategy on how to use biomass

for portfolio of high-value downstream activities

(e.g., bioenergy, biofuel, biochemical)

Primary objective: maximize sustainable GNI

impact from biomass in the 2020 time frame

Other considerations

▪ Downstream value creation

▪ High value job creation

▪ “Indigenous technology” creation within

Malaysia (direct and indirect value creation)

▪ Sustainability impact and emissions impact

▪ Using Biomass as leverage to form smart

partnerships with downstream companies and not

selling it as commodity so that biomass owners

can start getting into higher-value downstream

industries

Strategy Design principles

▪ Private Sector Led

▪ Portfolio Approach for Downstream Activities

and Objective industry facilitation

▪ No Specific Technology Recommendations

Malaysia’s Opportunity to Capture

RM30 billion additional GNI

impact

~66,000 new jobs

RM25 billion investment

opportunities

~12% CO2e abatement



6

Stakeholder

involvement

Advisory

panel

Stakeholder

labs

Survey with

~170

plantations

and ~70 mills

6

Inclusive stakeholder efforts on the development of National Biomass Strategy

2020: 300+ interactions (development work in 2010 and launched in 2011)

INDUSTRY – GOVT – ACADEMIA COLLABORATION


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77

0

5

10

15

20

25

30

35

202020152011

Additional 20% biomass shift towards portfolio of Higher Value

Uses by 2020 (inclusiveness)

Energy

Wood

products

1%

1%

3%

1%

4%

Use of biomass by type of end-product

6%

4%

9%

3%

9%

Share of total biomass available

in given year

Fuels

Pellets

Biobased

chemicals

Business as usual

Biomass used

Million tonnes, dry weight

11% 31%Total:

Pellets enable profitable

mobilization today,

and act as flexible

buffer once biobased

chemicals become

commercially available

Biomass to wealth

~14 bln

~8 bln

~9bln

~3bln

~2bln

GNI



8

The National Biomass Strategy looked into 4 Key Aspects of Malaysia’s

Potential to Develop a Sustainable Biomass Industry

iAvailability, Cost, Location of

Biomass in Malaysia

iiTechnology Available to Process

Biomass (Maturity)

iii Portfolio of Uses for Biomass

iv Malaysia’s Biomass Opportunities2011:

Oil Palm Biomass

2013:

Expanded Scope to

Cover Forestry and

Dedicated Crops As

Source of Biomass



9

Context and Objectives

1MBAS: NBS 2020 Delivery Unit –Government’s Commitment to ensure execution of Strategy (Cross-Agency Collaboration)


Update and Progress

CONTENT

c



BIOMASS UTILISATION CUTS ACCROSS SECTORS SO ITS IMPORTANT

TO HAVE CENTRAL AND OBJECTIVE FACILITATION

10



2011 2012 2013 2014 2015 2020

11

The National Biomass Strategy 2020: Chronology of Events

SOURCE: Press articles, BIO Pacific Rim pictures

“the NBS would pave the way for the growth of new high

value industries…including in bio-based chemicals and bio-

energy”

- Prime Minister Datuk Seri Najib Tun Razak, at the launch

of the strategy at the opening of BIO Pacific Rim 2011

Prime Minister launched

the 1MBAS Unit (Cross

Agency Task Force) to

accelerate and strengthen

execution NBS 2020 in

March 2012

NBS V1.0

Palm Oil Biomass

NBS V2.0

Expanded Scope

Forestry and

Dedicated Crops

Awareness State Buy-In Facilitation

Commercialisation

Create Multiple Biomass

Mobilization Models to

move industry and solve

Commercialisation Issues

By 2020

• RM30b additional GNI

• 60,000 jobs

• 12 reduction CO2

• RM 25b in Investments

Sabah and Sarawak

Biomass Strategy

(Co-Development with

Sabah and Sarawak

State Govt)



1MBAS team has been engaging local and international stakeholders

to facilitate the successful execution of the NBS2020

12

Since launch, AIM’s NBS2020 team has amongst others:

• Engaged with >90 mill owners in Sabah State to resolve the

Biomass Mobilization challenges, together with the Sabah

Ministry of Industrial Development, POIC Sabah, MIDA, MPOB

and PEMANDU

• Engaged and collaborated with Sarawak based industry, the

Sarawak State Government, State Planning Unit and its

agencies to develop a biomass cluster in Sarawak

• Organized visits for Malaysian biomass owners to downstream

users of biomass

• Engaged with international pellets, bio-fuels and Bio

Chemicals off-takers to work with Malaysian biomass owners

• Presented the Nation’s National Biomass Strategy at

International conferences throughout Asia, Europe and

Americas

• Facilitated feasibility studies for potential JV parties to invest in

Malaysia

• Established the Pellet Association Malaysia to help industry

1MBAS worked closely with stakeholders in the Sarawak & Sabah Govts. and industry for two

years, gained real traction to create high-value biomass clusters to benefit both States



NBS2020 positions Malaysia as the SEA Biomass Processing

Hub in minds of biomass owners and (Global) biomass users

13

2011 today2012 2013 2014

Strategy advocating

Milestones

Industry Interest/engage

Intern’l

Local

Launch NBS2020

Launch NBS2020 v2.0

Launch 1MBAS initiative

Lahad DatuJV Cluster

SEA first 2GEthanol pilot plant

P.A.M. established

Bintulu 2G ethanol project

100,000 t/month pellet order received

World Bio Markets, Europe

BIO Pacific Rim, USA

Biomass pellets, Korea

JV Cluster workshop, KK

Downstream pellet engagements, Korea

Palmex, Sandakan

BioBased Chem Asia, BKK

BIO Pacific Rim, KL

Palmex, Tawau

NBS2020labs

To meet the targets of the NBS 2020, the role to create awareness, engage and

‘convene’ all stakeholders is critical and must be continuous



14

Biomass Availability and Malaysia’s Potential:30% of Biomass shifted towards Higher Value Activities could create incremental GNI of RM ~30 billion and ~66,000 new jobs by 2020

Update and Progress


1MBAS – NBS 2020 Delivery Unit

CONTENT



15

MALAYSIA’S OIL PALM TOTAL PLANTED AREA (2013)

0.0

Perlis

Penang

0.0

0.1

Kedah

Malacca

0.1

Selangor 0.1

Kelantan 0.1

Terengganu 0.2

Negeri Sembilan 0.2

Perak 0.4

Pahang 0.7

Johor 0.7

Sarawak 1.2

Sabah 1.5

Mature Immature

Planted palm oil area as of Dec 2013

Million hectares

SOURCE: MPOB; Poyry



16

SOURCE: MPOB; Interviews

1 Based on 2010 FFB yield of 18 MT/ha, 4.85m ha planted, 4% replanted area per year and company specific information

Malaysia generates sufficient amounts of dry palm biomass per year

and availability subjected to biomass types and mobilisation cost

Solid

(dry weight)

POME

Annual Availability

Site of

production

Per ha

(tonnes)

National total

(m tonnes)1DescriptionBiomass Type

MillLiquid by-product from steriliza-

tion and milling process of FFB

Shells

(PKS)

MillRemains after palm kernel oil

extraction

MillRemains after oil extraction

from mesocarp

MillRemains after removal of palm

fruitsEFB

Fiber

(MF)

Fronds PlantationLeaves of oil palm tree

Trunks

12.2

0.8

1.4

1.4

9.6

3.0Plantation

59.3

4.1

6.9

6.7

46.4

14.4Tree trunk available at end of

plantation lifecycle

Liquid

(wet weight)



17

PKS Fiber EFBFronds Trunks

Biomass types (USD per tonne dry weight)

A detailed costing methodology has been developed to illustrate

how biomass can be mobilized in a Sustainable Way

5 - 21 15 0 0 0Harvesting

&

collection

2

19(chipping)

26(chipping)

031(shredding +

compacting)

5(compact

ing)

Pre-

processing3

29(fertilizer),

no application cost

11(fertilizer)

5(appli-

cation)

+ 24(fertilizer)

3(appli-

cation)

+ 41(2010 price)

13(2010 price)

Substitu-

tion1

9 - 80 8 - 81 0 - 113 0 - 40 0 - 97Transport-

ation4

SOURCE:, M. Islam et al.; K. Haron et al.; H. Kalid et al;. Lazaro A. et al.; ICIS; MARDI; MPOB; Field visit; Interviews



18

25 m tonnes of biomass can be mobilized in ports at USD 80 and

below using fully-loaded cost methodology

Cost of biomass in 2010

USD per tonne (dry weight)

Biomass available

Million tonnes

100

0

55

160

1510

20

5025 30 35

140

120

0

40

45

80

60

5 20 40

• 25 m tonnes below USD

80 at fully-loaded cost

• Costs can be significantly

lower e.g. if processing

plants are co-located with

palm oil mill clusters

Pre-process-

ing cost

3

Substitution,

harvesting

and collect-

ion cost

1

2

Transport

cost4

13 m tonnes below

USD 60 at fully-

loaded cost

SOURCE:, NPOB, AIM analysis, Academic papers, plantation interviews



25 m tonnes of biomass could be mobilised across Malaysia




20

Biobased Chemicals should offer highest value-add in the future

24-78

1,100-3,515

430-1,100

380-1,250

15-150x

215-390

Revenue generated per tonne of lignocellulosic biomass input (dry weight)

RM

Upper range

Lower rangeFertilizer

Bioenergy

Biofuels

Biobased-

chemicals

Existing revenue per

tonne today

Wood industry / Pellets

*Based on figures 2010-2011



21

Wide range of downstream uses for ligno-cellulosic biomass: 2G BioFuels

have reached commercial scale, 2G BioChemicals between 2016-2020

SOURCE: MOSTI R&D for Biomass 2010, Status of 2nd Generation Biofuels Demonstration Facilities in June 2010, MY-Basic Workshop February

2011, Expert interviews

Today

2014

FertilizerWood

industryOtherBioenergyPellets

2015

2020

Ligno-cellulosic

pathway

Biobased-

chemicals

In 2013, Lignocellulosic

biofuels already being

commercialized

(accelerated pace)

Biofuels

Beta Renewables’

cellulosic ethanol facility

in Crescentino, Italy is

the first plant in the world

to produce commercial

quantities of advanced

biofuels.

40-60K/annum capacity

(fermentation based)

October 2013 Sept 2014

Poet-DSM became the

World’s 2nd Cellulosic

Ethanol Plant using

straws as feedstock

located in the US

70K/annum capacity

(fermentation based)



22

Portfolio approach to downstream allows integration building a

sustainable business model



23

0

200

400

600

800

1,000

0 5 10 15 20 25 30 35 40

Mobilised biomass (%)

Incremental GNI impact of ~RM 30 billion

SOURCE: EPU, Future of Industrial Biorefineries, 2010, FiT Handbook, NKEA EPP5, Ullmanns and Kirk Othmer, SRI, Lactic acid and PEP Yearbook

2010, Journal of Palm Research 1999,, Platt's data strip, SRI, Press search, Expert interview

Business as usual

20202015

Biomass to

wealth scenario

2015

2020

bn RM GNI impact

6-7

1

Today

35-39

Cumulative

RM 28-35 bn

investment

Cumulative

RM 8-10 bn

investment

Average revenue per tonne of biomass

RM

2-3

11-12

▪ ~2% additional GNI impact

▪ ~66,000 new jobs

▪ ~12% CO2e abatement



On going study with state government of Sarawak to developing

“Sarawak Biomass Industry Development Action Plan”

24

Source: Poyry Analysis, 2015



Brooke Renewables 2G bioethanol plant in Sarawak to catalyst the

proposed Sarawak Biomass Hub Project

Bio-Ethanol

Refinery 1

Bio-Ethanol

Refinery 2 cum

BioChemical Plant

Enzyme Plant

Biomass Waste

Pelletisation

Facilities

Phase 2

Energy Crops

Agro Plantations

Concept Art

Brooke Renewables



26

Source: Poyry Analysis, 2015

On going study with state government of Sabah to developing

“Sabah Biomass Industry Development Action Plan”

Sabah land cover map

• Largest palm oil plantation

area in Malaysia

• Palm oil plantations: 1.5

million ha

• Timber production: 1.1

million mᶟ



The Sabah biomass industry offers several development opportunities

over time, and becoming a global bio-refinery hub

27

Sabah Biomass Strategy

Development could help Sabah capture:

~RM3.2 billion annual revenue

~25,384 new Green jobs

~RM13.5 billion in investment opportunities

by 2032

Sabah as a Global Bio-refinery Hub

CLUSTERS BASED ON BIOMASS AVAILABILITY AND

EXISTING INFRASTRUCTURE



28



Update and Progress: Private Industries taking the lead in Sarawak and Sabah on Biomass Initiatives towards Higher Value Added Activities

1MBAS: NBS 2020 Delivery Unit

CONTENT



29


NBS2020 UPDATE

a. Biomass to Energy

a. Liquid Biofuels (Bioethanol)

a. Biochemical

a. Biomass Cluster Development- IPP- Steam- Waste



30

Pellets: Growing Demand for Biomass pellets in Korea, Japan and

China, mainly driven by co-firing for carbon reduction

SOURCE: EnerOne report, Biomassmagazine.com, Poyry,

Team analysis

• South Korea has amended their laws to

allow the import of EFB pellets from 22

July 2014 (Pellet demand will start at 2%

co-firing rate in 2015 and would be 1.6

million tonnes) – Malaysia’s total

capacity as of today less than 400k

per annum combines

• Expected imports of biomass pellets in

Korea beyond alone to reach 5 million

tonnes per year, due to Koreas RPS

mandate going forward.

• Japan is expected to increase

importation of energy chips and wood

pellets, due to its FiT starting 2016 to

cater for all new Biomass Power Plants

(Ration 70% Coal and 30% Biomass) –

minimum size per facility of 100MW –

Demand of pellets to supplement

expected to be 5m tonnes In 2016

• If China were to replace 1% of its coal

consumption with pellets, it would require

40m tonnes per year. China is already

importing wood pellets

Import demand in Asia expected to reach ~20mln tons by 2020



Biomass mobilization for high value Renewable Energy pellets is the key to

unlocking NBS2020, and is taking off through our facilitation with local

producers and Korean off-takers

31

Biomass used


3111% 31%Total:

0

5

10

15

20

25

30

35

202020152011

3%

9%

Pellets enable

profitable

mobilization and

volume today, and

act as flexible bufferonce liquid biofuels and

biobased chemicals

become commercially

available

• Established Pellet Association of Malaysia, >10 members

• Detik Aturan: Home grown pellet producer received contract on 25th Jan ‘14 from Korea for 100,000 Tonnes/month (1.2 million tonnes/annum)

• Detik’s capacity was 3,000 Tonnes/month, now ramping and going from RM20m to RM500m per year

Confirmed plants

Potential plants

• Worked with Korea govt. and utilities to accept EFB pellets: Law amended 20 Dec ‘13

New Sarawak Partnership facilitated

by AIM for 5 Pellet Plants with a

combined facility of 30,000 t.p.m.

signed in August 2014



Malaysian industry is embracing initiatives under the National

Biomass Strategy 2020

32

“Without the National Biomass Strategy,

we wouldn’t have ventured into all these

downstream activities today”

Joseph Lim, CEO GGS

“AIM’s continuous support to this industry

will accelerate the growth of pellet industry

in Malaysia”

Khairil Annuar Khalid , MD Detik Aturan

GGS and China based Chinalight signed MoUs on

9 October 2013 for pellet off take to China

Detik Aturan and Korean BC21 signed MoUs on 9

October 2013 for pellet off take to Korea

Detik Aturan and Korean BC21 signed September

20134 for pellet off take to Korea



33


NBS2020 UPDATE



a. Biochemical




34

Liquid Biofuels: World’s first commercial scale Biomass-to-

ethanol facility was launched in Italy in October 2013

1 To be determined by EPA through a future rulemaking, but no less

than 1.0 billion gallons.

Source: EPA, EISA

Beta Renewables and Novozymes marked the official opening

in Northern Italy of the world’s largest advanced biofuels

facility at 60K pta facility.

Situated in fields outside the city of Crescentino, it is the first

plant in the world to be designed and built to produce

bioethanol from agricultural residues and energy crops at

commercial scale using enzymatic conversion.

Favorable regulation fueling

growth in demand of 2G biofuel

Another 6 to 7 plants expected to go live

globally in 2014 mostly in Brazil and the US



• The National Biomass Strategy 2020 (NBS2020) has put Malaysia

firmly on the Global radar of biomass industries according to

industry experts

• Malaysian industry, biomass owners and users, have embraced

NBS2020. Individuals, SME, Mid-size companies, large

conglomerates, as well as (State) Government agencies and

scientists have acknowledged the National importance of NBS2020

• Over 150 unique references and publications by local and

international scientists and publications** and numerous speaking

engagements by invitation at international biomass related

conferences

• Other nations in Southeast Asia, South America and the Middle

East have expressed interest to work with AIM’s NBS2020 team

to develop National Biomass Strategies for their respective

countries.A JV Cluster concept was created this year in Lahad Datu,

modeled after co-operatives to mobilize large volumes of biomass

Malaysia’s first Biomass-to-Ethanol pilot plant was established

this year in Tawau, Sabah by Teck Guan, Mitsui and Inbicon

Since the launch of Malaysia’s National Biomass Strategy,

mobilization has started, with a focus on Sabah and Sarawak

Hock Lee Group and Beta Renewables plan to start Asia’s

first commercials scale Biomass-to-Ethanol plant in Bintulu



From a concept of biomass mobilisation to reality

Lahad Datu Biomass JV Cluster Berhad - Sabah

36

CONCEPT REALITY IMPACT

2012-2013 2014 2014



Biomass mobilization for high-value BioFuels (ethanol) is taking off in Bintulu

through our facilitation with Biomass owners, Technology owners and

International off-takers

37

Biomass used


37

11% 31%Total:

0

5

10

15

20

25

30

35

202020152011

1%

4%

• Local Company A: Planting 15,000 Ha dedicated biomass crops

• Company A and local university collaborate on Napier trials

• Company A, Technology Provider X and Technology Provider Y formalised JV on upstream supply chain management for Sarawak Project

• Local Company B and partner collaborate to develop 2G ethanol project for Sarawak

• Partners to invest U$300m to set up Asia’s 1st second generation ethanol plant

~200m

~1bln

500k

Ethanol derived from biomass

became commercial-

scale ready last

year, the first plant in

Malaysia could come on

stream in 2 years

Companies are anonymous as project is still on-going

UNIVERSITY XYZ



38


NBS2020 UPDATE



a. Biochemical




39

Biomass used


3911% 31%Total:

0

5

10

15

20

25

30

35

202020152011

1%

6%

Biomass to Hydrolysate

conversion:

3-5 yrs for first plant to

reach commercial scale (in

the world)

Possible

technology

providers:

Interested

downstream

companies:

Biomass based sugars is expected to be commercial scale ready in 3-5 years.

Through our facilitation, global Chemicals companies are considering Malaysia for

their new biochemical plants.

~1bln

~1bln

~1bln

~1bln

~1bln

~1bln

~1bln

~1bln

Chemicals derived from

biomass based sugars

are expected to be

commercial-scale

ready in 3-5

years



40


NBS2020 UPDATE



a. Biochemical




If Sarawak successfully create Asia’s first integrated biomass cluster, there

will be opportunities to provide a wide array of facilities and services to the

Industrial Cluster

41

Sarawak could become Asia’s:

1stCommercial-scale biomass plantation

1stMulti-feedstock Biomass Hub

1stBio-port

1st2G ethanol plant

1st2G bio chemicals plant

~RM20 billion additional GNI impact

~10,000 new Green jobs

~RM21 billion in investment opportunities

* Numbers for 2023. Opportunity by 2020 will be ~RM10b GNI, ~6,000 jobs and 11b investment

Facilities for Biomass Cluster:

Biomass Power Plant/IPP

Biomass Steam Boiler

Industrial waster water treatment



NBS2020 identifies specific opportunities and enablers to create high-value

industries by mobilizing 30m tonnes biomass by 2020. AIM has facilitated

NBS2020 execution through 1MBAS unit.

42

CRITICAL FACTORS TO ACHIEVE NBS2020,

FACILITATED BY AIM’S 1MBAS UNIT:Biomass used


Energy

Wood

products

4211% 31%Total:

0

5

10

15

20

25

30

35

202020152011

1%

1%

3%

1%

4%

6%

4%

9%

3%

9%

Share of total biomass

available in given year

Fuels

Pellets

Biobased

chemicals

Biomass to Wealth

~14bl

n

~8bln

~9bln

~3bln

~2bln

▪ ~2% additional GNI impact

▪ >60,000 new jobs

▪ ~12% CO2e abatement• Mobilization of large

volumes of biomass for

high-value activities

• Industry-led approach

without government

interference in selecting

technologies

• Participation of biomass

owners in downstream

activities

• Attract downstream

technology owners and

off-takers

• Scaling up of new

technologies in Malaysia

• Economic efficiencies

when it comes to

biomass aggregation

LAHAD DATU BIOMASSJV CLUSTER BERHAD



CONCLUSION

43

• Government and Industry should move parallel (Government should not

just think like industry but also move like one) – no limitation on scope

of involvement – cause when it comes to Industry there is none

• Clarity on Objective, Action Plan and constantly Review and Relook into

progress through a proper Governance Structure

• Eco-system Approach and Sustainable (economic included)

development of Green industry

• Sustainable Feedstock supply and Mobilisation (Cost Effectiveness)

• Technology Deployment and Adoption Roadmap (Agnostic)

• Biomass Project Funding and Access to these Funds

• Off-take Market Development (Policy and Recommendations, G2G

and etc.)

• Drive the Biomass Industry with Passion and Urgency



Lux Research’s Impact Study 2015: Key conclusions from global

benchmarking

• Of the 10 focus countries in the Study, 8 made improvements in robustness of

infrastructure and commercial impact since 2010

• India’s inward-focused strategy and China’s outward-focused strategy incrementally

advanced each country’s relative position

• Predictably, Brazil and ASEAN countries claim the most commercial projects per

capita, and the fewest start-ups

• Mentorship for start-ups, which most interviewees cited as a critical component of a

strong biomass infrastructure, saw the least amount of emphasis across all countries

• Finland has spent the least in direct investments towards biomass industries, but has

seen the greatest relative commercial activity owing to its strong venture capital

presence

• Thailand’s simple and straightforward bioeconomy policies seem to outshine those of

Malaysia, which appear vast in number, but misaligned

• The structural incentives (public and private) for the biomass sector in Malaysia are

robust and on par with global benchmarks

44Note: 10 focus countries are Malaysia, China, India, Indonesia, Thailand, Australia, Finland, Germany, U.S. and Brazil



The Malaysian government provides financial support through

subsidies, tax breaks, and direct grants

Government support structures

Grant & loan programs

1-innoCERT: Innovation coaching programs for innovative

SMEs. Eligible to RM 1 million SME Innovation Award

Bio-Technology Venture Fund: US$100 mil venture fund

for biotech companies operating in Malaysia

Business Start-up Fund: Up to RM 5 million for technology

startups

Commercialization of R&D Fund: RM500k-RM4 mil for

university R&D commercialization initiatives

Commercialization Innovation Fund: RM500 mil fund to

assist SMEs in commercializing R&D

Cradle Investment Program: RM500k /company prototype

development fund, maximum two applications / company

Domestic Investment Strategic Fund: RM1 billion fund to

accelerate high-tech shift of Malaysian owned companies

Green Lane Facility: 2% interest rebate for approved loans

Green Technology Financing Program: RM250k to RM2

mil contract financing for green certified companies

Green Technology Financing Scheme: RM10 million up to

10 years for Malaysian-owned companies using green

technology

MyCreative Venture Capital: RM200 mil fund to increase

innovation and creativity among youth

TechnoFund: RM5 mil / company bridge fund for basic

research to commercialization

Tax rebates / exemptions

BioNexus status program: 100% income

tax exemption for value-added

biotechnology activities

Green Lane Facility: tax deductions to

obtain 1-innoCERT certification

Import duty / sales tax exemption: on

imported raw materials, components,

machinery, and equipment to produce

finished products. Minimum exemption is

RM1 mil

Investment Tax Allowance: 100% income

tax exemption for 60% of capital

expenditure for biomass-to-energy

technologies

Pioneer Status

100% statutory income tax exemption for

10 years for value-added biomass

utilization

Reinvestment Allowance: 15-year tax

allowance on 60% of capital expenditure to

update or automate factory or plant

Mandates / subsidies

10th Malaysia plan 2011-2015:

stipulates Renewable Energy Act

and Feed-in tariff mechanism

Feed-in Tariff Programme: up to

RM 46 cents/kwh tariff for bio-

energy. Guaranteed access to grid

Renewable Energy Act 2011:

15.5% renewable energy in mix by

2015

National Green Technology

Policy: Accelerate national

economy and sustainable

development with green technology

SOURCE: Lux Research Analysis, 2015


Malaysia has already implemented a wide number of incentives

to facilitate further industry development

46

Feed-In Tariff (FiT)1

Domestic

Investment

Strategic Fund

(DISF)

2

Commercialisation

of Research &

Development Fund

4

Green Technology

Financing Scheme

(GTFS)

3

Techno Fund5

Intellectual Property

Financing Scheme

(IPFS)

6

Incentive

Grant

Grant

Grant

Grant

Grant

Pioneer Status7

BioNexus Status8

Business Start-up

Fund (MTDC)10

Investment Tax

Allowances (ITA)

9

EPP 6 Developing

Oleo Derivatives11

Credit Guarantee

Corporation (CGC)12

Tax

Incentive

Incentive

Incentive

Grant

CAPEX

Incentive

Financing

Support

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