Develop Malaysia, develop palm oil biomass, develop bioenergy: the primer

Chemicals

The global chemicals market averaged 2,400 billion US $ of annual net sales in 2011. Only some 3% of this market currently consists of chemicals produced from biomass (called biobased chemicals). The limited market penetration of biobased chemicals is due to several reasons. First, the chemical industry has not been exposed to regulatory requirements and public demands like the energy market has. Furthermore, availability of feedstock and conversion technologies has been a challenge, as well as the economic performance. Here, the creation of multidisciplinary consortia (like the OPBC) bringing together the necessary knowledge and resources would be a facilitator to overcome these challenges and to start building successful biomass supply chains.

Plastics

A similar massive opportunity resides in the plastics market. PlasticsEurope: The Facts 2011, shows a total plastics market of  265 Mmtons in 2010, while total production capacity for bioplastics (which includes non-biobased biodegradable plastics) stood at ~ 0.72 Mmtons, according to the 2010 “European Bioplastics, Global production capacity for bioplastics” report. That same reference projected this number to rise to 1.7 Mmtons in 2015. Southeast Asia enjoys strong interest from bioplastics manufacturers and the first production facilities have been commissioned in Thailand and Malaysia.

Sustainability

One particular challenge is sustainability. The upcoming of the bioenergy markets has reignited the discussions about the sustainability performance of oil palm derived products. Reignited, because already in the 1990s concerns were developing in public about the environmental consequences of large scale expansions of oil palm plantations.

In response, government and private led initiatives evolved. The Roundtable for Sustainable Palm Oil was initiated almost 10 years ago by palm plantations with their downstream food industry customers and environmental organizations to define and implement responsible management of the plantations.

Now, there are outlets in the energy market and with the commercial exploitation of additional biomass fractions.  Obtaining more economic value from the existing biomass produce per hectare of oil palm plantation is by itself an improvement of the sustainability performance.

But there are sustainability challenges in biodiversity conservation, plantation management, illegal land use and labour. This is a challenge that can only be successfully addressed in collaborations across the entire supply chain to find constructive ways forward.