Tag Archives: malaysia
Malaysia Eyes Bigger Slice Of Growing Biomass Pellets Market
PUTRAJAYA, Oct 9 (Bernama) — Malaysia aims to capture a bigger slice of the growing demand for biomass pellets in Asia driven by renewable energy policies in South Korea, Japan and China. Chief Executive Officer of Agensi Inovasi Malaysia, Mark Rozario, said the country has an advantage in terms of logistics and cost of transportation, which were usually dominated by pellet producers from US and Europe. “We want to grab this opportunity and with the establishment of the Pellet Association of Malaysia (PAM) earlier, we have united the manufacturers on issues such as quality, pricing and volumes,” he told reporters after the briefing on the progress of the National Biomass Strategy 2020 here today. Rozario said demand for biomass pellets in Asia by 2020 was estimated to be around 10 million tonnes per year, mainly driven by renewable energy policies in certain countries. “Right now, Malaysia produces about 100,000 tonnes per year and there is room for us to increase our capacity following the plan to collaborate with more plantation owners to supply the feedstocks,” he said. He said Malaysia could produce about five-seven million tonnes per year of pellets in the next five years. Rozario said PAM now has 10 members and five of them had started production of the biomass pellets. He said the agency was ready to attract more players to invest in this industry. Earlier, Malaysia biomass pellet manufacturers inked deals with companies from China and South Korea to supply biomass pellets to help meet their countries’ renewable energy targets. Detik Aturan Sdn Bhd signed the memorandum of understanding with South Korea’s BC21 Co Ltd and Global Green Synergy Sdn Bhd with Chinalight (GuangZhou) Import & Export Corp of China. — BERNAMA Continue reading
Cool Planet, Acritaz To Turn Palm Waste Into Biofuel In Malaysia
Details Category: Bioenergy 03 Oct 2013 Published on Thursday, 03 October 2013 Palm plantation waste will be made into biofuel and biochar Biorefinery developer Cool Planet Energy Systems and Acritaz Greentech will be building commercial facilities in Malaysia to transform palm plantation waste products – empty husks, wood, and bark waste – into biofuel and biochar Acritaz Greentech, a group of companies that bring biomass processing and bio-technology innovations to plantations, has signed an agreement with Cool Planet to explore the building of multiple commercial biomass processing facilities using Cool Planet technology in Malaysia. Cool Planet develops small-scale biorefineries that convert non-food biomass into biofuels and biochar, a soil enhancing substance. They recently announced an agreement with Concord Energy to establish a joint venture in the Asia Pacific Region to develop biofuel facilities (see related story ). “We are pleased to be working with Acritaz Greentech, a group that is known for their technology leadership in biomass processing and bio-technology in Malaysia, to deploy our biofuels and biochar technology,” said Cool Planet Chief Executive Officer Howard Janzen. Acritaz and Cool Planet will use biomass raw materials that are abundant in Malaysia – such as palm plantation waste – to create renewable cellulosic fuels for the Asian market. They will develop a plant design that satisfies the specific needs of Malaysia with the first such plant to begin construction in 2014. “Acritaz is excited to commercialize Cool Planet’s platform technology to bring drop-in fuels to the Malaysian fuel market,” said Looi Kem Loong, a director at Acritaz. “This is the kind of breakthrough technology that Acritaz wants to deploy.” Acritaz will work to commit $60 million for this first facility before the end of 2013. They plan to locate this facility in the Malaysian state of Johor. The two companies will then work to build multiple such facilities across Malaysia, with Acritaz purchasing proprietary equipment and consumables from Cool Planet. – EcoSeed Staff Continue reading
The Politics of Palm Oil
Palm oil is Indonesia’s most valuable agricultural export and the industry employs nearly 2 million people. Indonesia has laws prohibiting the slash-and-burn method of clearing fields for large plantations, explains Pavin Chachavalpongpun, of Kyoto University’s Centre for Southeast Asian Studies. Yet allowances for small farmers and a regional culture of patronage politics may hamper enforcement. Growing global demand for palm oil – for cooking or even biofuels – contributes to choking smoke spreading from large fires in Indonesia to neighboring states, and the search for blame began. Foreign investors based in Singapore and Malaysia control more than two thirds of the total production of Indonesia’s palm oil, and small farmers represent about 40 percent of the industry. “Strong connections with leaders at the top can help lubricate all kinds of transactions,” Chachavalpongpun notes. “The intricate connections within the palm oil industry create an awkward situation, and more importantly, a crisis of good governance in Southeast Asia.” – YaleGlobal The Politics of Palm Oil Global demand for palm oil drives FDI in Indonesian plantations and rapid land clearing Pavin Chachavalpongpun YaleGlobal, 17 September 2013 Oil and smoke : Indonesian drive to export more palm oil (top) led to burning to clear land for plants and sent plumes of haze affecting the region. Singapore residents don masks to protect themselves. KYOTO: Palm oil plantations and processing have become a strategic industry for Indonesia. Palm oil is the country’s third largest export earner, contributing substantial foreign exchange earnings and providing opportunities for small-scale farmers to partake in this vibrant agro-business, thus developing the rural economy and spurring local employment. In Southeast Asia, palm oil is a traditional commodity dating back to the colonial period. But by the 1980s, increasingly high global demands for palm oil – for food products, cosmetics and even biofuels – led to industrial-scale plantations, particularly on Indonesia’s Sumatra and Kalimantan islands with their favorable climate and fertile, loamy soil conditions. In 2008, Indonesia’s replaced Malaysia as the world’s top exporter of palm oil as a result of a series of state-led programs designed to boost palm oil production, such as privatization of previously state-run estates. Today, Indonesia has 6 million hectares of oil palm plantations. It produces up to 25 million tons of palm oil annually, or half of the world’s total production, delivering around 5 percent of the country’s annual gross domestic product. This success is also due to the industry opening to foreign investment. Malaysia and Singapore happen to represent the majority of foreign investors, outnumbering those from outside the region. Through single investments and joint ventures with local companies, the two countries control more than two thirds of the total production of Indonesia’s palm oil. S moky haze from Sumatra poses economic loss and potential health hazards for Malaysia and Singapore. This context provides an inexorable correlation between investments from Malaysia and Singapore and the forest fires caused by the habitual slash-and-burn method used by farmers as a cheap and convenient way to clear the land for rapid turnaround of cultivation. This year in particular, the smoke haze from Sumatra has caused an even greater devastating impact on Malaysia and Singapore, in terms of economic loss and potential health hazards. The polluted haze reached dangerous levels in the two neighboring countries; Malaysia even declared a state of emergency in Muar and Ledang districts in the southern Johor state So when the governments of Malaysia and Singapore condemned Indonesian farmers, they seemed to overlook the fact that private firms from their own countries have played a major part in the outbreak of the smoke haze. A crisis of good governance is responsible for this transnational problem. Indonesia does have laws prohibiting slash and burn methods. For example, Article 78 of the 1999 Forestry Law stipulates that anyone found guilty of burning forests is subject to up to 15 years in prison and a maximum fine of Rp 5 billion (US$525,000). At the same time, Central Kalimantan issued its own regulation in 2008 which allows controlled burning by some small farmers. The rationale behind such regulation is that a complete ban would have adversely affected small producers and hurt the province’s rice output. A patronage system supports production, marketing and distribution of palm oil. One question that must be tackled is why can managers of commercial plantations of the palm oil in Indonesia continue to pose a threat to the environment and regional economy? Helena Varkke, who studies corporate communications and sustainable development, argues in a recent study that the regionalization of the oil palm plantation sector has shaped a political culture characterized by a deep-rooted patronage system. Owing to a similar shared culture of patronage politics, Malaysia and Singapore were successful in inserting themselves into the existing patronage networks in Indonesia, which are also operating in key industries like palm oil. In the palm-oil sector, the patronage system serves as an essential structure involving around the production, marketing and distribution, while connecting significant actors together to facilitate their businesses through legitimate mechanisms such as palm-oil consortiums. These consortiums normally consist of local producers, senior bureaucrats and influential businessmen who have forged close links with top national leaders. For example, in the case of Indonesia, a powerful politician plays a leading role in key decisions in the group which owns a large palm oil company. These decisions could cause a huge impact on the nation’s palm oil industry. For foreign companies, it is imperative to establish links with Indonesia’s powerful individuals or institutions to break into the industry. Several Malaysian companies doing palm oil business are significant investors with connections with Indonesian authorities, Varkkey explains. Singapore companies have in recent years also emerged as players in the Indonesian palm oil industry. Some of these conglomerates have become the world’s largest palm oil producers based in Indonesia. Normally, their board of directors consists of high-flying Singaporean personalities in politics and business. As an example of the existing patronage system, many Malaysian companies gained benefits from the Malaysian-Indonesian investment treaty in 1997 when Indonesia pledged to allocate 1.5 million hectares of land to Malaysian investors for palm oil development. Following the pattern of Indonesia’s patronage system, Malaysian and Singaporean companies found the need to build relations with local strongmen and the national leaders of Indonesia. From setting up subsidiaries, earning licences to production and property rights to plantation lands, to appointing influential Indonesian figures to sit on the board, Malaysian and Singaporean companies have further entrenched the patronage politics within the palm oil industry. Strong connections with leaders at the top can help lubricate all kinds of transactions. G overnments of Indonesia, Malaysia and Singapore must delve into the roots of their shared problem. Peatlands are suitable for oil palm, yet also extremely prone to fire. Under such sensitive conditions, the Indonesian government enacted legislation in 1999 for the control on proportions of peatlands used for palm oil plantations and the ban on slash-and-burn tactics. Often, such legislation is ignored, simply because of protections offered to firms by those of influence within the Indonesian government and a lack of enforcement. Thus, plantations prefer ground burning instead of the more expensive and inconvenient mechanical approach to clear land using excavators and bulldozers. Indonesia’s Duta Palma is one the companies with the worst record in illegal burning, Varkke claims. And many political leaders largely remained silent or showed indifference when the smoke struck Singapore and Malaysia in June, with one party member telling Singapore to stop acting like a child. Some state agencies, like the Indonesian Anti-Corruption Commission, work closely with a local NGO, Indonesia Corruption Watch, and are investigating a number of cases involving foreign companies and alleged illegal land clearing. But their efforts are stonewalled by the Indonesian courts. Instead of acting in defence of good governance, courts choose to protect the powerful in the industry in which they have vested interests. In 2010, an unnamed Malaysian-owned plantation was brought to court, but the case was stopped from continuing on to a higher court. The intricate cross-border connections within the palm oil industry create an awkward situation and, more importantly, a crisis of good governance in Southeast Asia. With name-calling and scapegoating over the polluted haze, the governments of Indonesia, Malaysia and Singapore have engaged in a rhetorical exercise. In reality, all parties are skating around the real issues, discomforted over delving too deeply into the root of their shared problem. Pavin Chachavalpongpun is associate professor at Kyoto University’s Centre for Southeast Asian Studies. Continue reading