c2 POIC Biorefinery Potentials in Sabah PDF

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
Copyright © POIC, 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

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
NATIONAL BIOMASS STRATEGY 2020
• 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) Copyright © POIC, 2013

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.

BIOREFINERIES AND ITS
GLOBAL PERSPECTIVE

BIOREFINERIES AND ITS GLOBAL PERSPECTIVE
BIOREFINERY CONCEPT AND PRODUCTS
Material Products
Thermochemical • Fertilizer
Transformation • Biomaterials
• Organic acids & extracts
• Glycerine
• Chemicals & polymers
• Food
• Animal feed
Energy Products
• Bio-methane
• Bioethanol
• Synthetic liquid biofuels (FT)
•Electricity & heat
Biochemical • Biodiesel
Transformation • Biohydrogen

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.

Bio-chemicals
Bio-ethanol
Wood industry
Pellets
Bio-energy
Animal feed
fertilizer
0 500 1000 1500 2000 2500 3000 3500 4000

Value of bioproducts (RM/tonne dry biomass)
Relative high value of biorefinery products to other bioproducts from

Biomass (Agensi Inovasi Malaysia, 2011 – 2013).

GLOBAL PERSPECTIVE OF BIOREFINERIES
• 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.

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 • Strengthen the awareness
biomass from sources and confidence of
for biorefinery uses biomass owners on the
- Need consistent and potential and feasibility of
constant biomass supply investment in biorefineries
- Large amount of biomass • Government support
required
- Competitive pricing of • Cooperation of biomass
biomass owners
• Timely delivery of
biomass

BIOMASS STANDARDS AND PRICING
Issues Actions
• Lack of standards and • To speed up the
specifications of biomass 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
- Proven technology market development
- 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 • Improve road quality and

transportation (biomass system
mobilization, fuel cost
etc)
• Need to facilitate • Government support in
aggregation of biomass the establishment of
alternative mode of
transportation (light rail,
barge)
• Finding suitable biomass

collection centers
INFRASTRUCTURE
Issues Actions
• Availability of basic • Make good use of the
infrastructure and available industrial
facilities (water, infrastructure and
electricity, road, port facilities (such as that at
facilities, industrial land, POIC Lahad Datu)
biomass collection
facilities) • Government support in
infrastructure
improvement and
development

FINANCIAL SUPPORT
Issues Actions
• High startup cost and • Make good use of the

CAPEX already available
attractive incentives from
federal government
• Low funding from • Government support in

financial institutions facilitating funding
support from financial
institutions and other
sources

ENVIRONMENTAL REGULATION
Issue Action
• Difficulty and uncertainty • Government to assist

with environmental with Environment Impact
regulation compliance Assessment (EIA) and
other environmental
regulatory issues

HUMAN CAPITAL RESOURCES
Issue Action
• Lack of qualified local • To provide training

human capital to courses for all levels of
manage the biorefinery human resource needed
establishment in the biorefinery sector

POLICIES AND FISCAL INCENTIVES
Issue Action
• Need government • Policy setting for the

support for the government to provide
establishment of the the required assistance
biorefinery sector in (physical, financial,
Malaysia 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).
Location map of Palm Oil Industrial Cluster Lahad Datu Copyright © POIC, 2013
• Palm Oil Industrial Cluster Concept
Research
Institutes Residential
Educational
Bulkers
Institutions
Palm Kernel
Crushing Plant
Other
Industries
Warehouses Biofuel
Biomass Animal feed
Bioenergy Financial
Machinery / Institutions
Equipment CPO
Oil Palm
Companies Mills
Plantations
Fertilizers
Energy
Refineries Suppliers
Commercial Bio-based
Development Oleochemicals Chemical
Food based
industries Port Handlers
Government &
Related Agencies / Operators
Transportation Technology
Companies Renewable Providers
Energy
Companies
INDUSTRIALIZING SABAH THROUGH INDUSTRIAL CLUSTERING
INVESTMENT POTENTIAL
POIC – RM50 BILLION

PORT &
EDUCATIONAL INSTITUTIONS LOGISTICS O&G – RM20 BILLION
CLUSTER
PORT HANDLERS/OPERATORS
OLEOCHEMICAL LOGISTICS – RM20 BILLION
CPO FINANCIAL INSTITUTIONS
MILLS OTHERS – RM10 BILLION
LAND DEVELOPERS
BIOFUEL BULKERS OIL & GAS
CLUSTER
TECHNOLOGY PROVIDERS
OIL PALM
TRANSPORTATION COMPANIES
PLANTATIONS
REFINERIES
MACHINERY EQUIPMENT COMPANIRES
REAL ESTATE COMPANIES
WAREHOUSES
SMI &
BIOMASS
FOOD
RESEARCH INSTITUTES CLUSTER
FERTILIZER GOVERNMENT & RELATED AGENCIES
ENERGY SUPPLIERS
OTHER
CLUSTER
THE CONCEPT OF
PALM OIL INDUSTRIAL CLUSTER
& OTHER CLUSTERS Copyright © POIC, 2013
• Value Adding Opportunities In Biomass-based Downstream Industries
Products Currently Underutilised Downstream Opportunities
3.5 million trees Compost Fibre Pulp & paper MDF Pellets
Oil Palm Trunks
Furniture from Oil

Value Adding Palm Lumber
6.99 million tonnes Opportunities Biofuels Bio-Ethanol Bio-based

Chemical
Empty Fruit
Bunches
Particle Board /
Moulded Particle
Board
Finished Paper Briquette
Product
20.60 million tonnes Animal Feed from

Wood Plastic Composite Plywood Oil Palm Fronds
Oil Palm Fronds
• Land Development
Land area
Phase Industrial Cluster Activities Status
(Acres)
I 600 Oil-based Industries, Bulking. Developed
Fertilizer, Supporting Industries,

II 550 Developed
Commercial.
Biomass, Oil & Gas, SMI,

IIIA 547 Supporting Industries, On going
Commercial.
Ship Building & Repair, Renewable

Energy, Food Industry,
IIIB 2,753 Planning
Petrochemical, SMI, Commercial,
Supporting Industries.

20 M plus draft
Copyright
Copyright ©
© POIC,
POIC, 2012
2013
2013
• POIC Lahad Datu Port
1. 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
2. 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.
3. Proposed Container Terminal

• Phase 1 - 15M draft
¤ 400M Length
¤ Can accommodate vessel up to 65,000DWT
¤ 50,000TEUs
• POIC Infrastructure
¤ 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.

• Critical Strength and Advantages
4
Government-
backed
5 8
12
9
Existing
Industrial Players

• 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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BIOREFINERY POTENTIALS IN SABAH

BIO BORNEO 2013

• 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

Copyright © POIC, 2013

Copyright © POIC, 2013

• Sabah state of Malaysia is located at the northern

• It is the largest oil palm growing state in Malaysia

• Predominantly agro-forestry based economy.

• With relatively little industrial activities.

• Sabah State government established Palm Oil Industrial

• Was launched in November

• Creation of wealth from biomass

• To start with oil palm biomass.

• Set to build several biorefinery

• Sabah has a role to play in the

Source : Agensi Inovasi Malaysia (2012) Copyright © POIC, 2013

The objective of this presentation is to highlight :

• Biorefineries and its global perspective.

Copyright © POIC, 2013

Copyright © POIC, 2013

BIOREFINERY CONCEPT AND PRODUCTS

Copyright © POIC, 2013

• High value of biorefinery products.

Copyright © POIC, 2013

0 500 1000 1500 2000 2500 3000 3500 4000

Relative high value of biorefinery products to other bioproducts from

Copyright © POIC, 2013

GLOBAL PERSPECTIVE OF BIOREFINERIES

• Future world demand for bio-products from biorefineries is

Copyright © POIC, 2013

Copyright © POIC, 2013

Land use in Sabah (2011)

Source : Department of Statistics Malaysia (2012)

Copyright © POIC, 2013

Biomass resources and availability in Sabah

Biomass Sources Availability (%)

Oil Palm Residues 95.8

Forest and Timber Wastes 3.3

Copyright © POIC, 2013

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

Biomass Type Production

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)

Copyright © POIC, 2013

Copyright © POIC, 2013

Factors for consideration :

Copyright © POIC, 2013

ACCESSIBILITY AND MOBILIZATION OF BIOMASS

Copyright © POIC, 2013

BIOMASS STANDARDS AND PRICING

• Lack of pricing mechanism • Study of pricing

• Publish the price of

TECHNOLOGY AND MARKET ACCESS

Copyright © POIC, 2013

TRANSPORTATION AND LOGISTICS