BIOREFINERY POTENTIALS IN SABAH - · PDF filehow to realize the biorefinery potentials in...

Copyright © POIC, 2013

BIOREFINERY POTENTIALS IN SABAH By

Pang Teck Wai, Bilson Kurus and Lee Ming Tong

POIC Sabah Sdn Bhd

BIO BORNEO 2013 Delivering The Borneo Bioeconomy Innovation

The Magellan Sutera Harbour Resort, Kota Kinabalu, Sabah

19 – 20 February 2013


PRESENTATION OUTLINE

• Introduction

• Biorefineries and its Global Perspective

• Biomass Resources and Availability in Sabah

• How to Realize the Biorefinery Potentials in Sabah

• The Role of POIC Lahad Datu

• Conclusions


INTRODUCTION


• Sabah state of Malaysia is located at the northern

portion of Borneo Island with a land area of 73,620 KM2.

• It is the largest oil palm growing state in Malaysia

(1.43 million hectares).

• Predominantly agro-forestry based economy.

• With relatively little industrial activities.

• Sabah State government established Palm Oil Industrial

Cluster (POIC) Lahad Datu to spearhead the state

industrial efforts in accelerating the state economy.

INTRODUCTION


• Was launched in November

2011.

• Creation of wealth from biomass

for high value-added uses.

• To start with oil palm biomass.

• Set to build several biorefinery

clusters in Malaysia.

• Sabah has a role to play in the

development of biorefinery

sector.

- A lot of biomass

Source : Agensi Inovasi Malaysia (2012)

NATIONAL BIOMASS STRATEGY 2020

INTRODUCTION


The objective of this presentation is to highlight :

• Biorefineries and its global perspective.

• Biomass resources and availability in Sabah.

• How to realize the biorefinery potentials in Sabah.

• The role of POIC Lahad Datu.

INTRODUCTION


BIOREFINERIES AND ITS

GLOBAL PERSPECTIVE


Thermochemical

Transformation

Material Products

• Fertilizer

• Biomaterials

• Organic acids & extracts

• Glycerine

• Chemicals & polymers

• Food

• Animal feed

Energy Products

• Bio-methane

• Bioethanol

• Synthetic liquid biofuels (FT)

•Electricity & heat

• Biodiesel

• Biohydrogen Biochemical

Transformation

BIOREFINERY CONCEPT AND PRODUCTS

BIOREFINERIES AND ITS GLOBAL PERSPECTIVE



WHY BIOREFINERY?

• High value of biorefinery products.

• Lot of products with wide applications.

• Technologies are available and emerging for

conversion of cellulosic materials to bioproducts.

• Attractive government incentives.

• Biorefinery products can substitute petroleum

products and make products biodegradable.



0 500 1000 1500 2000 2500 3000 3500 4000

Value of bioproducts (RM/tonne dry biomass)

fertilizer

Animal feed

Bio-energy

Pellets

Wood industry

Bio-ethanol

Bio-chemicals

Relative high value of biorefinery products to other bioproducts from

Biomass (Agensi Inovasi Malaysia, 2011 – 2013).


• Future world demand for bio-products from biorefineries is

expected to increase significantly, because of :

Increasing public pressure for environmental sustainable raw

materials as the alternative to the use of fossil fuels.

Increasing energy security fears.

Rising prices of petroleum and petroleum products.

Low barriers to market entry.

Government support.


GLOBAL PERSPECTIVE OF BIOREFINERIES


BIOMASS RESOURCES AND

AVAILABILITY IN SABAH


BIOMASS RESOURCES AND AVAILABILITY IN SABAH

Land use in Sabah (2011)

Land use (000’ ha) (%)

National Forests & State Land 4,091 55.6

Plantation Forest 214 2.9

Oil Palm Plantations 1,415 19.2

Rubber Holdings 87 1.2

Rice Fields 43 0.6

Coconut Farms 18 0.2

Cocoa Holdings 7 0.1

Other Crops 27 0.4

Other Land Uses 1,460 19.8

Total 7,362 100.0

Source : Department of Statistics Malaysia (2012)



Biomass resources and availability in Sabah

Biomass Sources Availability (%)

Oil Palm Residues 95.8

Forest and Timber Wastes 3.3

Others 0.9

Total 100.0



Estimated oil palm biomass generated in Sabah (2010 – 2020)

Biomass Type Production

Dry Weight (million tonnes/year)

Oil Palm Fronds 13.8 – 17.3

Oil Palm Trunks 4.2 – 5.3

Empty Fruit Bunches 2.0 – 2.5

Mesocarp Fibres 2.1 – 2.6

Palm kernel Shells 1.2 – 1.5

Palm Oil Mill Effluent 0.6 – 0.8

Total 24.0 – 30.0

source : Agensi Innovasi Malaysia (2011)


HOW TO REALISE THE

BIOREFINERY

POTENTIALS IN SABAH


HOW TO REALIZE THE BIOREFINERY POTENTIALS IN SABAH

Factors for consideration :

• Accessibility and mobilization of biomass

• Biomass Standards and pricing

• Technology and market access

• Transportation and logistics

• Infrastructure

• Financial support

• Environmental regulation

• Human capital resources

• Policies and fiscal incentives


ACCESSIBILITY AND MOBILIZATION OF BIOMASS


Issues Actions

• Need to move the

biomass from sources

for biorefinery uses

• Strengthen the awareness

and confidence of

biomass owners on the

potential and feasibility of

investment in biorefineries - Need consistent and

constant biomass supply

- Large amount of biomass

required • Government support

- Competitive pricing of

biomass • Cooperation of biomass

owners

• Timely delivery of

biomass


BIOMASS STANDARDS AND PRICING

Issues Actions

• Lack of standards and

specifications of biomass

• To speed up the

development of

biomass standards and

specifications

• Lack of pricing mechanism • Study of pricing

mechanism

• Publish the price of

biomass at regular

basis



TECHNOLOGY AND MARKET ACCESS

Issues Actions

• Technology access • Government support in

technology link up and

market development - Proven technology

- Adaptable to local

conditions and feedstock

- Cost effective

• Lack of awareness on

domestic and

international market

access



TRANSPORTATION AND LOGISTICS

Issues Actions

• High cost of

transportation (biomass

mobilization, fuel cost

etc)

• Improve road quality and

system

• Need to facilitate

aggregation of biomass

• Government support in

the establishment of

alternative mode of

transportation (light rail,

barge)

• Finding suitable biomass

collection centers



INFRASTRUCTURE

Issues Actions

• Availability of basic

infrastructure and

facilities (water,

electricity, road, port

facilities, industrial land,

biomass collection

facilities)

• Make good use of the

available industrial

infrastructure and

facilities (such as that at

POIC Lahad Datu)


infrastructure

improvement and

development



FINANCIAL SUPPORT

Issues Actions

• High startup cost and

CAPEX

• Make good use of the

already available

attractive incentives from

federal government

• Low funding from

financial institutions


facilitating funding

support from financial

institutions and other

sources



ENVIRONMENTAL REGULATION

Issue Action

• Difficulty and uncertainty

with environmental

regulation compliance

• Government to assist

with Environment Impact

Assessment (EIA) and

other environmental

regulatory issues



HUMAN CAPITAL RESOURCES

Issue Action

• Lack of qualified local

human capital to

manage the biorefinery

establishment

• To provide training

courses for all levels of

human resource needed

in the biorefinery sector



POLICIES AND FISCAL INCENTIVES

Issue Action

• Need government

support for the

establishment of the

biorefinery sector in

Malaysia

• Policy setting for the

government to provide

the required assistance

(physical, financial,

technical and human

capital development) to

kick start the biorefinery

industries



THE ROLE OF POIC

LAHAD DATU


PALM OIL INDUSTRIAL CLUSTER LAHAD DATU

• Located at the centre of oil palm growing belt in Sabah

¤ 1.4 million hectares (28% of Malaysia’s total

plantation).

¤ 5.84 million tonnes of CPO production (31%

of Malaysia’s total production).

¤ 124 mills in Sabah (29% of 425 mills in

Malaysia).

¤ 12 refineries in Sabah (25% of 52 refineries

in Malaysia).

¤ 24 – 30 million tonnes (dried) palm biomass

(empty fruit bunches, oil palm trunks, oil

palm fronds, palm kernel shell, mesocarp

fibres and palm oil mill effluent).

Source: MPOB website, Economics & Industry Development Division, Statistics (2012).

Copyright © POIC, 2013 Location map of Palm Oil Industrial Cluster Lahad Datu


• Palm Oil Industrial Cluster Concept



Machinery /

Equipment

Companies

Technology

Providers

Government &

Related Agencies

Research

Institutes

Educational

Institutions

Energy

Suppliers

Financial

Institutions

Residential

Commercial

Development

Transportation

Companies

Bulkers

Port Handlers

/ Operators

Warehouses

Other

Industries

Renewable

Energy

Companies

Oil Palm

Plantations

CPO

Mills

Refineries

Bio-based

Chemical Oleochemicals

Fertilizers

Palm Kernel

Crushing Plant

Food based

industries

Animal feed

Bioenergy

Biofuel

Biomass



OIL PALM

PLANTATIONS

OLEOCHEMICAL

BIOFUEL

REFINERIES

BIOMASS

FERTILIZER

INVESTMENT POTENTIAL

POIC – RM50 BILLION

O&G – RM20 BILLION

LOGISTICS – RM20 BILLION

OTHERS – RM10 BILLION

INDUSTRIALIZING SABAH THROUGH INDUSTRIAL CLUSTERING

PORT & LOGISTICS CLUSTER

OIL & GAS CLUSTER

OTHER CLUSTER

SMI & FOOD

CLUSTER

EDUCATIONAL INSTITUTIONS

PORT HANDLERS/OPERATORS

FINANCIAL INSTITUTIONS

LAND DEVELOPERS

BULKERS

TECHNOLOGY PROVIDERS

TRANSPORTATION COMPANIES

MACHINERY EQUIPMENT COMPANIRES

REAL ESTATE COMPANIES

WAREHOUSES

RESEARCH INSTITUTES

GOVERNMENT & RELATED AGENCIES

ENERGY SUPPLIERS

THE CONCEPT OF PALM OIL INDUSTRIAL CLUSTER

CPO

MILLS

& OTHER CLUSTERS



Oil Palm Trunks

Empty Fruit

Bunches

Oil Palm Fronds

Products Currently Underutilised

Value Adding

Opportunities

3.5 million trees

6.99 million tonnes

20.60 million tonnes

• Value Adding Opportunities In Biomass-based Downstream Industries

Downstream Opportunities

Fibre

Wood Plastic Composite

Pulp & paper

Plywood

Briquette

MDF Pellets

Furniture from Oil

Palm Lumber

Particle Board /

Moulded Particle

Board

Animal Feed from

Oil Palm Fronds

Compost

Finished Paper

Product

Bio-Ethanol Bio-based

Chemical Biofuels



• Land Development

Phase Land area

(Acres) Industrial Cluster Activities Status

I 600 Oil-based Industries, Bulking. Developed

II 550 Fertilizer, Supporting Industries,

Commercial. Developed

IIIA 547

Biomass, Oil & Gas, SMI,

Supporting Industries,

Commercial.

On going

IIIB 2,753

Ship Building & Repair, Renewable

Energy, Food Industry,

Petrochemical, SMI, Commercial,

Supporting Industries.

Planning



Dry Bulk Terminal •14M draft

¤2 outer berths to accommodate vessels up to 30,000DWT

•12M draft

¤2 inner berths to accommodate vessels up to 10,000DWT

•Cargo handling equipment

¤2 high speed ‘Kalmar’ bulk loader on the western side of jetty.

¤Conveyer belt system to handle bulk cargo up to 1,000 tonnes per

hour.

Liquid Terminal • 20M draft

¤ 500M from shoreline

¤ 2 berths to accommodate vessels up to 100,000 DWT

• 10M to 12M draft

¤ 60M – 70M from shoreline

¤ 5 loading platforms, 600M berthing length

¤ Can accommodate vessels / barges up to 20,000DWT

• POIC Lahad Datu Port

Proposed Container Terminal • Phase 1 - 15M draft

¤ 400M Length

¤ Can accommodate vessel up to 65,000DWT

¤ 50,000TEUs

1.

2.

3.



¤ Piperacks - Pipe rack provided by POIC to connect to investors’ lots

within Phase 1 to the liquid jetty.

- Investors are required to lay their own pipeline.

¤ Interchange - Located within the liquid terminal with boiler and compress

air facility.

- Pipelines are provided from interchange to berth.

¤ Electricity

- Double Circuit Underground cabling system.

- Electricity supply up to a total of 50MW.

- At least one ring of 11kV underground cabling circuit

running along each company lot.

¤ Water

- 3 Million Gallons (11.35 million litres) in Permastore Tanks.

¤ Telecommunications

- Underground cabling system.

- Provided by Telekom Malaysia (TM) within the whole POIC

area.

• POIC Infrastructure



Government-

backed

2

4

5

• Critical Strength and Advantages

8

9 Existing

Industrial Players

12



• Putting the Pieces Together : Opportunities


CONCLUSIONS

• With a lot of biomass feedstock, Sabah is well-placed to play

an important role in biorefinery sector.

• In order to realize fully the biorefinery potentials, there is the

need for :

mobilization of biomass to end-users.

overcoming the challenges in pricing, technology, market

access, transportation and logistics, infrastructure,

financial assistance, environmental issues and human

capital development among others.

strong support from the government and cooperation of

private sector.

• POIC Lahad Datu is ready to facilitate the development of the

biorefinery sector in Sabah.


Thank You

POIC Sabah Sdn Bhd

17th Floor, Wisma Perindustrian Jalan Istiadat, Teluk Likas

88400 Kota Kinabalu, Sabah, Malaysia

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