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How Malaysia’s Palm Oil Producers Are Enhancing Savings and Sustainability

February 22, 2018
Since the first commercial cultivation of palm oil in Malaysia in 1917, the local industry has grown from to become second biggest producer of palm oil in the world today.
Building on this success, some Malaysian palm oil companies are trialing new opportunities to enhance cost savings and the sustainability of their operations.

Palm oil as a source of energy

While palm oil is well-known for its edible oil, and as an important ingredient in a wide range of products including soaps, detergents, lubricants, candles, pharmaceuticals, and cosmetics, it is also making an impact in power generation.


Palm oil mill effluent (POME) – methane and waste water – produced from the processing of palm oil fruits can be recycled to produce biogas. This video produced by the Malaysian government, as part of their national Economic Transformation Program, explains the recycling process and outcomes.

POME Fact: POME can be extremely dangerous and has 21 times Global Warming Potential (GWP) compared to other gasses. This is due to the large amount of methane gas which POME produces from its anaerobic process.

Malaysia leading the way

Strong demand for palm oil, and the availability of increasingly affordable biogas technologies has influenced more palm oil companies to produce, and use biogas to power their mills, and sell excess energy to the national grid.

Palm Oil Fact: In Malayisa, palm oil waste contributes to the highest fraction of total industrial solid wastes, approximately 80 million tonnes annually!

Malaysia is a leader on this front, and recently, the Federal Land Development Authority (Felda) announced a collaboration with Concord Green Energy to develop a biogas project that aims to generate 5.6 megawatts (MW) of electricity across its four palm oil mills – two in Johor and two in Pahang.

As part of the RM50 million investment, Concord purchased six GE Jenbancher Type 4 gas engines to convert POME to electricity. Another company, Dana Engineering will provide maintenance of the biogas plants, engineering support, and spare parts supply. The project is expected to be ready by October.

The Felda and Concord Energy project, and government programs to build up to 400 methane capture facilities in-the-near future, demonstrate that the Malaysian palm oil industry is well placed to further optimize its resources resulting in new energy and revenue streams.

This direction also enhances the industry’s sustainability, and environmental innovation reputation and offers a case study for other palm oil producers to follow.