Industry symbiosis

In this forum the panelists are from the major plantation groups that have integrated operations across the supply chain. They are committed to combating climate change and its impacts. To this end they are already practicing reduce, reuse and recycle. In some instances they have gone further by exchanging waste and by-products with at least three parties thereby meeting the definition of industry symbiosis.

In Malaysia industrial parks that promote industry symbiosis are rare. In Sabah the POIC (Palm Oil Industrial Cluster) Lahad Datu is such a park that houses production of biodiesel, refinery, fertilizer, palm kernel crushing, warehousing, power plant, bulking installations, spent bleaching earth oil (SBEO) extraction, palm pellet/fibre, packing of cooking oil, processing and packaging of PKS & EFB etc. Recent site developments see Shell buying up Ecooils Sdn Bhd (SBEO extraction) and Gamalux Oils Sdn Bhd (also SBEO extraction) setting up a new oleochemical plant.

The panelists say that geographic proximity is not a necessity when it was pointed out that mills can be remote and refineries and oleochemical plants are located near ports. As the throughput of refineries increased tremendously it became near impossible to be supplied by just nearby mills. The mill has to be close to the estate as they are handling a large volume of FFB to produce just 22% of oil.  Circular economy does not imply that it has to be local but where a material gets reused as much as possible and there is a value is using that material. So circular economy will still work whether it is regional, national and even global.

It is possible to work as a cluster where several mills send their biomass to a power generator near the grid. Mills are often in remote areas far from the grid and the electricity company is reluctant to lay cables to these mills. The solution is for the mills to send their biomass to the grid, literally, to green the grid. The mills get paid and they help the nation’s net-zero aspiration.

There is abundance of palm biomass at nearly 180 million tonnes per annum valued at least RM10 billion that is largely unused. PKS is exported to Japan for their power plants and it makes an ideal mixture with coal for co-firing, allowing the plants to reduce their GHG footprint. Carbon pricing might in the future make it attractive for PKS to be retained in Malaysia.

Mills have the potential to not only be net-zero but make the electricity grid more green. Using a 60 tonne per hour mill as an example, the biogas from the POME treatment can generate 6MW of electricity. As the mill needs only 1.5MW the excess 4.5MW could be exported to the grid. As a result the mill does not have to burn EFB, MF and PKS which it can sell as biofuel. It does not make sense to send PKS to Japan incurring GHG emissions in shipping when it could be used to make our grid greener eg co-firing our coal power plants and helping Malaysia towards becoming carbon-neutral.

Industries should be willing to use the excess biomass. The cement industry use coal and should be happy to use biomass to reduce their GHG foot print. The Taiko bleaching earth plant in Indonesia uses biomass. Unilever Oleochemicals Indonesia uses PKS for their thermal oil heating.

The just launched National Energy Policy (DTN) 2022-2040 under Action Plan A6 led by MPIC is to enhance and unlock indigenous bio-based energy. The many stakeholders besides those from the palm oil industry will promote industry symbiosis as the nation moves towards its carbon-neutral goal of 2050.

Biomass is not only suitable for energy. Non-energy applications include oil palm trunks for furniture and EFB for paper.

Leading companies like Sime Darby, IOI and KLK are already practicing circular economy. Within the palm oil industry they can show other players by their example that it can be done. Outside the palm oil industry they are demonstrating how to engage these players as stakeholders profitably whilst reducing their GHG emissions.

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The article was prepared by Ir ChM Qua Kiat Seng, the Chair of NACES Forum 2022.