KUCHING: The Malaysian Palm Oil Board (MPOB) has mandated the implementation of biogas capture for all new palm oil mills applications from Jan 1, 2014 and for existing mills applying for throughput expansion in the country.
In the case of Sarawak, these mandates can adversely affect the palm oil industry’s growth and development, says the Sarawak Oil Palm Plantation Owners Association (Soppoa).
“Soppoa fully supports the federal government’s initiative on the implementation of biogas capture facilities for the industry which is crucial for the progress of the industry as a whole as well as to meet consumers’ increasing requirement for environmental-friendly and sustainable products,” said a spokesperson.
“However, there are a number of significant factors to be fully considered by the government in Sarawak’s palm oil industry prior to the implementation of biogas capture facilities for mills here. Foremost is that of return for investment in building biogas capture
facilities.”
Under the NKEA EPP5 initiative by the government for palm oil mills to hook on to national gridlines for excess power sale, this is only applicable to Peninsular Malaysia, Sabah and Labuan.
“Sarawak is not included in the list of states for this facility, and so the excess power could not be sold even if available as Sarawak’s electricity supply law and ordinances are different from the rest of the country,” Soppoa highlighted.
“Hence, Sarawak millers face double dilemma of not only having to spent more on building these facilities while not able to enjoy benefits from the EPP5 initiative as well as unable to sell the excess power
generated.”
Another consideration is that of expansion of the palm oil industry in Sarawak as currently more than 1.2 million hectares of oil palms have been planted in the state with 68 mills in operation.
“It is estimated that another 40 mills will have to be built in the next five to ten years to cater to the current planted area.
“With that number of mills to be built, the financial outlay, inclusive of biogas capture facilities, will be immense with no return to investment as the eventual power generated could not be utilized under current electricity supply regulations in Sarawak.
“Presently, the power gridlines in many rural parts of Sarawak are still not available, so even with ability to generate and supply electricity, these mills will still be unable to hook on to the gridlines here.
“Currently, the renewable energy initiative by the federal government for biogas plants receive tariff rates of between RM0.40 – RM0.46 cents/kw/hour to supply to the electricity grids and SOPPOA looks forward to similar feed in tariff rates for the promotion of biogas plants in the state to encourage renewable and green energy generation and consumption here.”
Based on these considerations, Soppoa is requesting the federal government to consider granting the industry in Sarawak voluntary implementation policy for the building of biogas capture facilities for mills in view of the existing conditions here.
Presently there is almost zero return to investments for such biogas facilities for mills in Sarawak.
Accordingly, Soppoa calls on the government to consider including infrastructure for feed-in-capability into the state grid under the 11th Malaysia Plan.
There should also be non-grid power generation infrastructure to supply electricity to rural communities under the Rural Electrification Schemes under the 11th Malaysia Plan,” the spokesperson added.
“Where sizeable rural communities are located near to biogas plant facilities, the government ought to consider allowing the setting up of small industries that can tap into the power generation which will greatly benefit these rural communities. In this way, the palm oil industry in Sarawak can grow in tandem with the rural development aspirations of the government which will be adding to the wealth of the state and nation.”