Malaysian-Japanese joint-venture to invest $308 million in 100,000ha plantation for biodiesel, biogas in Sarawak
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The project was announced at the launch of the "Sarawak Corridor of Renewable Energy" (SCORE) in Bintulu yesterday, which saw commitments for investments totalling RM 500 billion (€105.7/US$154.3bn). Prime Minister Datuk Seri Abdullah Ahmad Badawi said the proposed investments - amongst them commitments by mining giant Rio Tinto - were made in 24 memoranda of understanding (MOUs) signed during the launch.
SCORE is a large development project supposed to help reduce poverty and improve income distribution among the people in Sarawak by stimulating economic development in key sectors. It would add value to existing heavy industries, focus on development of natural resource-based industries (see overview below) and emphasise research and development capabilities the economic benefits of which should trickle down to local populations across the state.
The focus of SCORE is on the optimal utilisation of natural energy resources through the development of energy-intensive industries. Its goal is to establish power plants capable of generating 20 GW in as efficient a way as possible, preferrably by drawing on bioenergy, hydropower and natural gas. By concentrating energy-demanding activities in a single project, synergies are supposed to be developed that would lead to cleaner, more efficient and more sustainable production processes.
SCORE covers a geographic area of 70,000 square kilometers and will affect an estimated 600,000 people. The proposed investments announced at the opening of the project have exceeded the RM 334 billion (€70.6/US$103.1bn) that the Sarawak Government said was required to fully develop the corridor by 2030.
The Malaysian-Japanese biofuel joint-venture in Sarawak is part of SCORE's renewable energy focus. It covers five years and involves an initial investment of RM 1 billion (€212/US$308 million). The multi-feedstock biodiesel plant would have an annual capacity of about 240,000 tonnes per year and bulking facilities in Tanjung Manis while the jatropha curcas and oil palm plantations would cover an acreage of 100,000 hectares.
As for the biogas project, it would be undertaken under the Clean Development Mechanism (CDM) program in Sarawak, Carbon Capital. Both companies signed a Memorandum of Understanding (MoU) at the inauguration of SCORE:
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Carbon Capital, a Malaysian based company with offices in Bangkok, Kuala Lumpur, Kuching, New Delhi and Tokyo, provides end-to-end multi solutions in establishing CDM projects in Malaysia.
The CDM is an arrangement under the Kyoto Protocol allowing industrialised countries with a greenhouse gas reduction commitment to invest in projects that reduce omissions in developing countries as an alternative option to undertake expensive emission reductions in their own countries.
JCM, with its office in Nagoya, is a wholly owned member of Magna International Co. Ltd Japan, with its key businesses comprising trading in carbon credits and investment in CDM projects.
SCORE attracted both local and foreign investments in a range of sectors, including oil and gas, bioenergy as well as hydro resources, infrastructure, transport and communications - all sectors that require large investments to take scale advantages. Amongst the energy-intensive industries to be set up within the corridor are at least two aluminium smelters.
Sarawak Energy Bhd, Cahya Mata Sarawak Bhd (CMS) and Rio Tinto Aluminium Ltd inked a RM 5.25 billion deal for the supply of 1100MW of energy. Other deals signed included:
- Sarawak Energy and Press Metal Bhd for the supply of 510MW worth RM 2.5 billion
- Sarawak Energy and Sime Darby Bhd for 2,400MW from Bakun and undersea transmission line worth RM 22.5 billion
- Sarawak Energy and Tenaga Nasional Bhd to analyse energy options, develop coal potentials and infrastructure worth RM 50 billion
- Konsortium Galdasar Sdn Bhd and Yuh Yow Fisheries Taiwan for a 800ha aquaculture project worth RM 100 million
- Konsortium Galdasar and Shei Chui Oceanic Enterprise Taiwan for shipbuilding worth RM 40 million
- Bintulu Development Authority and Zinc Ox Resources England for zinc electro refinery plant worth US$350million
- Sarawak Energy and a consortium of banks for RM 3 billion to RM 20 billion in financial deals
- CMS and Rio Tinto on training for its aluminium smelter
- CMS and Rio Tinto and Aluminium Pechinery for the supply of technology to Salco aluminium smelter
- CMS, MMC Corp Bhd and Pan Kingdom Investment Co for financial deals worth US $1.5 billion
According to the development blueprint, the core projects would involve the setting up of power generation plants to churn out at least 20,000MW of electricity.
High priority sectors have also been identified for development – petroleum, aluminium, metal production, glass production, tourism, palm oil plantations, livestock, fishing, timber plantations, aquaculture and marine engineering which includes ship-building and ports construction.
Sarawak is Malaysia's province on Borneo Island, one of the world's most biodiverse regions, home to unique tropical forest ecosystems (map, click to enlarge). It is to be expected that SCORE will, despite its name, run into major environmental problems. Mining, metal processing, aquaculture, forestry, and palm oil production are all heavy industries with a problematic environmental footprint. Bioenergy plantations located in this region may lead to deforestation, even if they are based on a crop like jatropha which thrives well in poor, semi-arid zones.
Map: Major vegetation types of Borneo. Map modified from WWF's "Borneo: Treasure Island at Risk" report. The map is based on Langner A. and Siegert F.: Assessment of Rainforest Ecosystems in Borneo using MODIS satellite imagery. Remote Sensing Solutions GmbH & GeoBio Center of Ludwig-Maximilians-University Munich, in preparation, June 2005. Based on 57 single MODIS images dating from 11.2001 to 10.2002 with a spatial resolution of 250 m. Credit: Mongabay.
References:
Bernama: Malaysian-Japan JV In RM1 Bln Biodiesel, Jatropha & Biogas Deal In Sarawak - February 12, 2008.
Sarawak Corridor of Renewable Energy - website.
The Star: Sarawak corridor draws RM500bil - February 11, 2008.
The Star: SCORE set to make Sarawak a powerhouse of growth - February 12, 2008
TradingCharts: Sarawak Corridor of Renewable Energy to Help Reduce Poverty - February 11, 2008.
4 Comments:
Okay, listen up. This is Important.
Is there any information about what they are going to do with the biomass that is cut down to plant the Plantations? Will this go into the power generation scheme?
No information on that, but it is not unlikely given that the practise of burning biomass during land clearing operations on Borneo has led to major problems in the past, causing serious protest, both in Malaysia and Singapore as well as from the environmental community (remember the yearly smoke pollution episodes, visible on satellite images, causing serious problems across the region).
The problem is that the utilisation of the biomass would require prior investments in infrastructures (roads, biomass densification/processing plants).
You know what, I will try to contact the companies in question and ask them. I will refer them to the Canadian company in Liberia that is in the process of establishing a bioenergy operation based on this new practise.
Jonas
Thanks, Jonas. In light of the recent Science (?) Magazine articles it would be good to be able to point to a "Proper" model going forward.
Well, in fact I will see if I can connect with the Canadians in Liberia. The company is called Buchanan Renewable Energies, and it would be nice to get more details about their approach.
Will see if I can get an interview or some documentation from them.
Cheers,
Jonas
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