EU-Malaysia launches biomass confederation

• Biomass-SP pushes players up value chain
• Forty-five Malaysian players readied for world market

By Eleanor Chen

Forty-five small and medium enterprises (SMEs) from the Malaysian biomass industry came together to form the Malaysian Biomass Industries Confederation (MBIC) in May. The grouping was launched by the European Union (EU)-Malaysia Biomass Sustainable Production Initiative (Biomass-SP) – which has been instrumental in nurturing them in the last three years – at the EU-Asia Biomass Best Practices & Business Partnering Conference 2012 in Kuala Lumpur.

MBIC aims to develop Malaysia’s biomass industry via strategic partnerships among biomass SMEs, major feedstock owners, research institutes, and other local and international biomass stakeholders.  

Biomass-SP has been working with the Malaysian Industry-Government Group for High Technology (MIGHT), with EU Switch-Asia funding, to nurture these SMEs in biomass commercialisation and linking them up with the EU value chain.

MBIC will also be a platform to commercialise and market high-value biomass products while promoting sustainable consumption and production. 

Biomass-SP display of renewable materials and their applications (photo credit: Biomas-SP)

European investors keen on investing in biomass projects in Malaysia are also being matched up with Malaysian SMEs. The May conference brought together producers of bioenergy and bio-based products with biomass traders, technology providers, equipment manufacturers, investors and policy-makers. Participants listened to best practices and successful case studies of biomass utilisation in the areas of bioenergy, biofertilisers, high-value chemicals and biofuels, eco-products and green building materials. 

A business partnering seminar was held on the last day of the four-day conference. While potential investors from France, Singapore, Thailand, Korea, the Netherlands, Ireland and Germany and EU-owned companies with regional offices in Singapore and Thailand were earlier keen to fund biomass power plants and biogas projects, there were no successful matches with local SMEs up until last year. 

Biomass-SP technical director Datuk Leong Kin Mun says, however: “Not all companies go for business matching. Some want to tap into our facility for environmental management standards (EMS), ecolabelling or carbon footprint measurement. While Biomass-SP matches some SMEs with investors, others are assisted with funding for certification.”

Datuk Leong Kin Mun, Biomass-SP technical director (photo credit: GPA Photo)

Coaching by Biomass-SP has included topics such as ISO 14001 EMS implementation, carbon footprint and ecolabelling, Clean Development Mechanism, application for government grants, technology commercialisation and business partnership with European companies. 

Its ultimate goal has been to help SMEs generate higher-value products from biomass and penetrate new markets, and consolidating to supply the high volume of demand. 

Raw empty fruit bunches (EFB), for instance, sells for RM10 (US$3)/ tonne but can fetch US$100/tonne when processed into fibre or US$100–US$120 as pellets. Once converted into bio-sugar however, the value increases tenfold. 

“Malaysia has the ready technology to extract bio-sugar from EFB or even plantation wood and convert it for industrial or medical use. These can then be sold at US$1,000/tonne. It is something that the Malaysian Biotech Corporation is interested to promote,” says Leong.

Based on the enquiries Biomass-SP has received, the Malaysian biomass industry is worth some US$94 million, says Vincent Piket, ambassador and head of delegation of the EU to Malaysia in December 2011.

Biomass-SP technical coach Tang Kok Mun says: “We (Malaysia) produce EFB pellets and briquettes that are in demand in Europe, Japan and Korea and, to a certain degree, China. These countries are ready to buy but they require several hundred thousand tonnes and would not be interested in anything less. Malaysia’s predicament is that it has a lot of small players who are not able to supply in such large quantities. We hope to consolidate all these players through Biomass-SP and negotiate a better deal with the buyers.”  

Leong says: “In the case of biogas projects, the capital expenditure is high. Those who claim to have the technology and investors or funding may not necessarily have a track record in building or managing a biogas plant.”