By: Professor Dato Dr Ahmad Ibrahim
A recent satellite talk to unlock the nation’s biomass feedstock for business was timely. Despite launching the ambitious National Biomass Action Plan which has advocated the clustering approach to achieve the necessary economy of scale, the response has been lukewarm. It became clear the biomass action plan has not been effectively driven. For one, such a massive economic endeavour cannot be driven by just a government department. It has to be a proper Malaysian Biomass Development Board where the government should partner industry and research to move the plan, not much different from the governance structure of the MPOB.
The talk spoke of the many economic potential of biomass, and the many business models available. These include biomass to electricity, biomass to SAF, biomass to pulp and paper, biomass to graphite, biomass to organic fertilizers, and more. It was also demonstrated that in terms of value, biomass to electricity is among the lowest. The higher value businesses that were cited were however limited in market demand. The cost of conversion is also higher. Ever since the introduction of FIT for biomass, the most popular biomass business in Malaysia has been the conversion into electricity.
However, it has been reported that many such ventures have failed. Most attributed the failure to the low FIT given of around 30 Sen per unit. It was explained why the FIT cannot be higher. A major reason is that any increase in FIT would burden the consumer. Carbon tax may be a solution. As a result of the lower FIT compared to neighbouring Thailand which offers 50 Sen, it has been widely reported that much of our biomass has been sold there. A lost opportunity to add value for us. The irony of it all is that the FIT for solar is higher. Why? In terms of inclusive value to the nation, biomass is better than solar. Most of the solar components are imported. Whereas biomass is 100% Malaysian.
The argument that Malaysia’s Feed-in Tariff (FIT) for biomass should be higher than for solar energy has some valid points. This is based on the differences in potential, sustainability, and economic impact between these two energy sources. Malaysia has abundant biomass resources from its palm oil industry, forestry, and agricultural waste. Utilizing these resources to generate energy supports the circular economy, reduces waste, and contributes to sustainable agriculture. Given this, biomass energy offers a dual benefit of energy production and waste reduction, which isn’t directly provided by solar energy. The e-waste from solar is signalling another environmental headache.
Biomass can generate energy 24/7, unlike solar energy, which is dependent on sunlight availability and varies throughout the day and seasons. This consistency in energy generation can help maintain grid stability and reduce the need for energy storage or backup power sources, which is an added cost for solar energy. The biomass industry supports local economies, especially in rural areas, by providing jobs in waste collection, transportation, processing, and energy generation. This direct economic impact on communities involved in agriculture and palm oil production is often greater than the benefits from the solar industry, which typically requires high-tech equipment and less human labour post-installation.
Biomass, when sustainably sourced, can be considered carbon-neutral. It helps in reducing greenhouse gas emissions by preventing methane release from organic waste decomposition and replacing fossil fuels. While solar is clean, biomass can have an additional environmental benefit through waste management and carbon sequestration. Biomass however requires an organized supply chain for collection, transportation, and processing, which can involve higher upfront and operational costs compared to solar projects, which have simpler, more direct installations.
While biomass has great potential, it must be harvested sustainably. Solar technology is advancing rapidly. The same trend is not as pronounced for biomass technologies. This is where the R&D on biomass should be intensified. Increasing the FIT for biomass could incentivize greater use of available biomass resources, support rural economies, and contribute to Malaysia’s renewable energy mix. Given its potential for consistent energy generation and local job creation, biomass may indeed deserve a higher FIT compared to solar.
The author is an Associate Fellow at the Ungku Aziz Centre for Development Studies (UAC), Universiti Malaya, and may be reached at uacds@um.edu.my
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