CDM projects to convert palm oil waste into biogas

Sime Plantations, a subsidiary of Sime Darby Berhad, and BioX Carbon, part of the BioX Group, have signed an agreement to jointly develop Clean Development Mechanism (CDM) projects at the palm oil mills of Sime Darby in Malaysia.

These CDM projects are based on the concept of reducing greenhouse gas emissions, in this particular instance, methane gas, by capturing the gas emitted from palm oil mill effluent (POME) and transforming it into renewable biogas that can be used for combustion in gas engines or boilers.

Through this process, the carbon dioxide footprint of the production process at the mills is reduced. The life-cycle greenhouse gas emissions of palm based biofuels are also strongly enhanced, whereas their already strong energy balance is given a boost as well.

When palm fruit bunches are harvested and processed into palm oil, a large amount of organic slurry becomes available. Until now, most of this energy-rich waste-stream was not recovered and left to settle in ponds, where it emits methane, a potent greenhouse gas. By anaerobically digesting the POME, biogas can be obtained and used to power the mill or plantation equipment. This way, fossil fuels can be replaced with the renewable biogas from palm oil waste. It is estimated that for each hectare of oil palms between 400 and 500 cubic meters of biogas can be obtained from the POME released during the processing alone.

The Clean Development Mechanism is one of the systems introduced in the Kyoto Protocol, to assist countries in achieving their emission reduction targets. Apart from the environmental benefits of reducing the emission of greenhouse gases, CDM projects are potentially profitable and can reduce fuel costs by using, in this case, captured methane as a replacement.

The BioX Group is currently the largest and fastest growing supplier of liquid biomass to the energy sector in Europe. It strives to be a fully integrated renewable and sustainable energy producer and as such has included the development of CDM projects as part of its business model. These projects are to be undertaken under the purview of the Kyoto Protocol (United Nations) and will generate Certified Emission Reduction certificates (CERs):
bioenergy :: biofuels :: energy :: sustainability :: climate change :: palm oil :: plantation :: biogas :: methane :: Clean Development Mechanism :: Malaysia ::

Talking to reporters, BioX Group chief financial officer and head in Asia, Edgare Kerkwijk said the group would initially invest 2.5 million ringitt (€544,000/US$733,000) in the project. “From 2008 to 2012, we will be looking at an investment worth 12.5 million ringitt. We plan to sign CDM project agreements with two or three more listed plantation companies this year,” he added.

He added, "Implementing CDM takes Sime Plantations' corporate social responsibility to a higher level since CDM is one of the few environmental initiatives recognized by national and international bodies".

"The implementation of CDM projects can be a specialised and lengthy process and we are therefore proud that Sime Plantations has chosen our company to be their partner in the development of these projects. Adopting CDM enables Sime Plantations to deliver value in environmental consciousness even while it strives to deliver value in its operations", he added.

Kerkwijk said BioX Group was also developing four liquid biomass power plants in the European Union (EU). “We are interested to acquire or form joint ventures in biomass plantations in South-East Asia,” he added.


Azhar Abdul Hamid, Managing Director of Sime Plantations, said, "The CDM projects are expected to generate an annual income of 7.5 million ringitt (€1.5/US$2.2 million). Greenhouse gases are reduced and this is in compliance with the Kyoto Protocol and the Principles and Criteria of the Roundtable on Sustainable Palm Oil".

"There is potential savings in energy costs at the mills using this concept, as fossil fuel can be replaced with the renewable biogas. Apart from the additional income from the sale of CERs, the concept also enhances the sustainability and environmental management of our palm oil mills. The trapping of the methane reduces the foul odour from the POME ponds to the surrounding community", he added.


Stakeholder consultations for the bundled CDM projects have been completed successfully, which means that individuals, groups and communities likely to be affected by the projects have been given the opportunity to express their views and express their concerns, if any. The project received the Letter of Approval by the Ministry of Natural Resources and Environment on April 12th, after which the project will be delivered to the CDM Executive Board in Bonn, Germany, for registration.

Sime Plantations manages about 80,000ha of oil palm plantations in Malaysia and Indonesia. A total of eight palm oil mills are in operation to process harvested palm fruit bunches from its estates.

The Malaysia Energy Centre recently reported that the nation had carbon credit potential of up to 100 million tonnes for the 2006-2012 period. Japan and the EU are among the biggest carbon credit buyers in the world.

More information:
BioX: Sime Plantations and BioX Carbon sign agreement to jointly develop CDM Projects [*.pdf] - May 10, 2007.

The Star: Sime Plantations, Dutch firm in greenhouse gas control project - May 11, 2007.

The Roundtable on Sustainable Palm Oil, an ongoing dialogue on palm oil bringing together NGOs, businesses and scientists.