Malaysia’s palm oil industry is expected to grow in the next decade, powered by business opportunities in upstream expansion, development of existing downstream palm oil activities, as well as biodiesel production worth RM57.6 billion by 2020. Malaysia is currently the world’s largest commercial exporter of tocotrienols, a vitamin essential nutrient for the body, exporting RM50 million of the supplement to major markets (USA, Europe, Japan and South Korea). With increased awareness on the advantages of tocotrienols, the palm oil-based supplement industry could be poised for growth in the coming years.
Moreover, palm oil industry in Malaysia is aiming to promote the sustainable bio-fuel potential that exists in palm oil. Global biofuels production and consumption has been rapidly growing as countries shift to a new energy supply mix to reduce dependence on fossil fuels. Malaysia’s biodiesel plants produced only 117,000 tonnes in 2010 despite having an annual production capacity of 3.5 million tonnes. More can be done to increase production, as well as affirm Malaysia’s commitment to reduce greenhouse gas emissions in the coming decade.
Meanwhile there are many Entry Point Projects (EPP) plans made by the Malaysian Government, which seek to transform the industry’s fundamentals along its supply chain, from increasing the productivity of smallholders to increase the capacity for expansion of the downstream sector.
Increasing the Oil Extraction Rate (OER)
This Entry Point Project (EPP) aims to improve the oil extraction rate (OER) from 20.49% in 2009 to 23% by 2020 through proper grading of crops. The presence of 241 Malaysian Palm Oil Board (MPOB) enforcement officers at selected mills will provide advisory and enforcement services on crop quality, helping to ensure a lower amount of poor quality crops sent for processing.
Developing High-Value Oleo Derivatives
This EPP will steer production from basic oleo-chemicals to higher-value oleo derivatives, which are greener than petrochemicals. This will also help the downstream segment grow
Developing Biogas Facilities at Palm Oil Mills
This EPP strives to encourage palm oil millers to capture methane and turn the greenhouse gas into clean energy by installing biogas facilities in all palm oil mills located in Malaysia by 2020. Mills can use the converted methane as electricity for their own consumption while biogas plants that meet certain pre-requisites will feed the excess electricity into the national power grid.
Commercialising Second-Generation Biofuels
The palm oil industry generates over 60 million tonnes of oil palm biomass annually in the form of empty fruit bunches (EFBs), trunks and tree fronds. This project aims to fast-track the commercialization of biofuels produced from non-food biomass – commonly referred to as second-generation biofuels – to mitigate fluctuations in coal and oil prices. The production of biofuels includes bio-oils, which can be used to generate electricity, fire up boilers, and in diesel engineshe site.
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