Friday, October 21, 2016

OFIC global trade policy and politics panel - initial notes

At MOSTA's OFIC Module 2, we just had a great line-up of speakers and a good panel session.


Photo: Mr Syahril at the rostrum by Khor Yu Leng

Ms Sanya Reid Smith of Third World Network drew our attention to domestic agriculture subsidies remaining in places like the US and EU within the trade agreement contexts, Malaysia's bounded export duty (up to 8.5% on CPO)exemption under TPPA (and RCEP leaked documents showing Japan and South Korea asking for zero), that IP extensions may reduce availability of non-patent agricultural chemicals (that often result in prices being 3x higher), and TPPA's potential impact on procurement by federal government entities and large SOEs, ILO labour standards becoming enforceable, and question whether palm oil milling is a service and therefore subject to liberalisation. The USA certification process for TPPA may add more requirements (beyond the text, with topics as yet unknown), and that many countries wait until the USA proceeds before making changes to domestic laws and regulations. She offered a thorough applied analysis of TPPA on palm oil that has not featured in previous public for a.

Dr Joe Feyertag of LMC International Ltd explained a profound shift in grain and vegetable oil production post 2002 with large production and acreage growth amidst the biofuels boom, rapid meat consumption transitions, oil palm expansion less than a quarter of maize and soy acreage expansion, the 2010s being the end of the biofuels decade and rise of the protein decade, future growth scenarios showing a hypothetical moratorium on palm oil volume resulting in even larger increase in soy acreage likely in the Amazon Basin, a look at US biodiesel market volume, potential volume return from Argentina and Indonesia and EU biofuels policy news of no more public support for food-based feedstocks from 2020. He concluded that environmental aspirations need to take a more nuanced consideration of how demand drives expansion across the vegetable oil complex (palm, soy, rape/canola and sun), and for GMO products.

Mr James Caffyn of Gira Strategy Consultants provided major insights into vegetable oils usage in the dairy sector - specifically analog cheese, fat-filled milk powders, growing-up milk and infant formula - with great data on dairy-veg oils price arbitrage of over 4.5x, market size and growth, vegetable oil inclusion ratios and palm oil tonnage indicators (over 1.5 million tonnes in FFMP and GUM-infant formula). What came strongly across for palm oil was the fast growth potential of this segment (especially in Asia), its technical proficiency, compelling price arbitrage, market perception, regulatory concerns and food safety.

Mr Syahril Syazli Ghazali of Ministry of International Trade and Industry (MITI) of Malaysia offered wonderful insights into TPPA, as Lead Negotiator for the Market Access Chapter. 20% of Malaysia palm products go to TPPA countries and a focus was on Canada and Mexico on duty removals, Malaysia's ability to carve out export duties (bounded basis), and the need to comply to international standards will be a cost to Malaysia industry and government but it is the way forward.

In our panel discussion, we fielded a question on EFSA's 3MCPDE issue - the greater volume concern would arise if it also affects China dairy sector demand. As for biodiesel prospects, these are quite limited to Southeast Asia. Moreover sludge oil has been removed from double-counting and is unlikely to come back soon. From the floor, we heard from MR Chandran on the problem of definitions of by-products versus waste products, and that freedom of association for labour will be an issue especially since 30-35% of production cost is labour (Sanya mentioned PWC's report finding that one week stoppage could impact 2% of revenue). On my question about a pathway for palm to USA biofuels (beyond a handful of grandfathered facilities), Joe said that GHG emissions reductions is an official problem and Syahril clarified that USA biofuels access negotiation was tried but remains on the table without a solution via TPPA. To MR Chandran's added question on USA (California) market potential (this being a growth market versus EU not being seen as having much potential), I highlighted the change in the US Customs Border and Protection (CBP) rule against forced-labour imports in force since March 2016 and that it has already disrupted cargoes of tea and sweeteners; and  it is notable that California leads in lawsuits on child labour allegedly in the cocoa supply-chain of large brand name companies. Sanya notes that the US CBP rule reinforces TPPA requirements and that complaints can be made against products and producers.

In conclusion, we covered the development and prospects for important fast-growing end-uses for vegetable oils and focussed on issues for Malaysia palm oil. Palm oil has a complex processing chain and a big range of applications. It has tremendous technical proficiency and price advantage in food uses, but if needs policy support in biofuel applications. Success in market share penetration is mediated by trade policy and new breed trade agreements (require upgrade to international standards in production and more). This affects relative price-cost and some non-price/non-tariff issues may also affect price-cost.

Saturday, October 1, 2016

Biogas - Indonesia plantations need fiscal incentives to invest in the biogas power

4 October 2016: Indonesia plantations need fiscal incentives to invest in the biogas power 


View Point: Concept of subsidies for renewable energy misunderstood by Vincent Lingga October 1 2016 -- Several pilot projects built by plantations companies show that 10,000 to 15,000 hectares of oil palm estates can produce biogas to generate one MW for 1,000 households. The potential is quite huge as Indonesia is the world’s largest palm oil producer with a total area of 10 million ha. But plantation companies need fiscal incentives to invest in the biogas power station.
http://www.thejakartapost.com/news/2016/10/01/view-point-concept-subsidies-renewable-energy-misunderstood.html

RI'€™s biogas capacity to reach 14.8 megawatts: Ministry by Fedina S. Sundaryani, The Jakarta Post, Jakarta | Thu, March 24 2016 -- the current installed capacity of biogas power plants had reached 3.6 MW, ... €œThe expected capacity will increase significantly because there are currently 25 companies that have applied for permits...Although the ministry has not announced the new feed-in tariff, Indonesian Biogas Association secretary-general Trio Chadys said that he heard the new prices would be listed in dollars. ... '€œThe last we heard, the prices would be set in dollars. The previous price was Rp 1,050, [and it is rumored] the new price will be $11.75 for biogas. If it is true, it will probably be more economically feasible for investors,'€ he said. http://www.thejakartapost.com/news/2016/03/24/ri-s-biogas-capacity-reach-148-megawatts-ministry.html

Editorial: Harnessing palm oil waste by The Jakarta Post, January 27 2016 -- The government launched the first pilot project late last month for large-scale solar power generation to supply rural areas in Kupang, East Nusa Tenggara. Now it is palm oil-based biogas that is poised to become a major source of electricity in rural areas that are far from the national grid of the state electricity firm (PLN).... Only a small amount of this methane is currently being captured, but several palm oil businesses have started to realize the commercial use of the liquid waste if the methane can be captured and burned to generate power. So far these small plants (usually with a one-megawatt capacity) are operated mostly to power households around the mills.  ..... It is encouraging, however, that the government has just issued a regulation that sets the feed-in tariffs for excess power from plants fired by POME-based biogas. This means that PLN is required to buy excess power from POME-based biogas-fired power plants. ... Mulyana said at the opening on Saturday of the fifth such plant in Riau, which is owned by the Asian Agri palm oil group, that biogas from the liquid waste of the 850 palm oil mills across the country could generate 1,100 megawatts. 
.... http://www.thejakartapost.com/news/2016/01/27/editorial-harnessing-palm-oil-waste.html

Capturing methane for electricity generation by Ade Cahyat, The Jakarta Post, September 19 2013 -- Due to the lack of willingness from palm oil companies and the absent of support facilities, the application of POME-to-energy is just about 10 percent of the total mills nationwide. The combination of effective government support and innovative private sector behavior can unleash the potential... http://www.thejakartapost.com/news/2013/09/19/capturing-methane-electricity-generation.html


Malaysia news:


Malaysia’s Green Energy Path, Posted by Saleem Ali of University of Queensland (Australia) on September 16, 2016 -- Malaysia was a leading negotiator for the group of developing nations at the 21st session of the Conference of the Parties to the UN Framework Convention on Climate Change (COP 21) in Paris.  Seven years ago at the COP 15  meeting in Copenhagen Malaysia had agreed to reduce its “carbon intensity” (CO2eq emissions to GDP) by 40% from its 2005 value by 2020. Its commitment was enhanced to 45% carbon intensity reduction by 2030 at the COP 21 in Paris, France in 2015, subject to conditions regarding financing assistance and transfer of technology. http://voices.nationalgeographic.com/2016/09/16/malaysias-green-energy-path/

Green & Smart Kahang plant completed on schedule, 7 September 2016 -- StockMarketWire.com - Green & Smart Holdings - a renewable energy company generating power from biogas captured through the treatment of palm oil mill effluent in Malaysia says the the first plant, the 2.0 megawatt Kahang Biogas plant located in the state of Johor, has been completed on schedule.
... Green & Smart also confirmed that construction of the 2.0 megawatt Malpom Plant in Nibong Tebal, Penang is on track for completion by end of October 2016. The biogas system has been completed with commissioning work under way. http://www.stockmarketwire.com/article/5410489/Green-Smart-Kahang-plant-completed-on-schedule.html

Kim Loong outshines its peers BY HANIM ADNAN  11 June 2016 -- Another potential revenue from the downstream segment is biogas. Kim Loong has commissioned three biogas plants in Johor. Gooi says: “Kim Loong is in the process of installing the machinery and equipment to connect its gas engine system ​in Kota Tinggi mill in Johor ​to ​supply 1.8MW to Tenaga Nasional Bhd’s grid.  “We expect to commission the plant by year-end.” In Sabah, the group has received approval from Seda (Sustainable Energy Development Authority) to supply 1.0MW to the Sabah electricity grid. “We also hope to obtain approval for another 1.0MW in Sabah in the near future,” adds Gooi. http://www.thestar.com.my/business/business-news/2016/06/11/kim-loong-outshines-its-peers/

Sarawak wants delay on biogas plant rule 6 February 2016 -- “We understand the Government has committed to reducing gas emission. (However) It costs not less than RM15mil for each palm oil mill to install biogas trapping facilities,” said Sabat who urged the ministry to provide incentives in terms of cost to install such facilities. There are currently more than 65 palm oil mills in Sarawak. Sabat said SOPPOA disagreed with the imposition of RM1mil a year in bonding for any palm oil mill which delayed installation of a biogas plant. http://www.thestar.com.my/business/business-news/2016/02/06/sarawak-wants-delay-on-biogas-plant-rule/

Addressing palm oil concerns  8 September 2014 -- “At the same time, we have over 200 mills looking into methane gas removal, which will supply electricity to the national grid by 2020. Most greenhouse gas emissions happen at the mills, thus lowering them will improve palm oil’s sustainability,” said Yusof. (As of March this year, biogas facilities at 63 mills have already been completed, facilities at 14 more mills are under construction and there are plans for biogas plants at a further 150 mills.) http://www.thestar.com.my/news/environment/2014/09/08/addressing-palm-oil-concerns/

31 October 2015: Malaysia - 113 palm oil mills with the potential to generate electricity from palm oil biogas


113 palm oil mills identified to generate electricity from biogas October 29, 2015; KUALA KUBU BARU: The government has identified 113 palm oil mills with the potential to generate electricity from palm oil biogas for the national grid Fit-in-Tariff programme.  Minister of Plantation Industries and Commodities Datuk Amar Douglas Uggah Embas said the palm oil mills were situated near electricity power sub-stations and can absorb the electricity generated.  "There is already 12 palm oil mills that are already connected to the power grid network while 79 others are in the process of being connected," he told reporters here after opening the first Bio-Compressed Natural Gas (Bio-CNG) commercial production plant using palm-based biogas. The Bio-CNG plant, located at FELDA Sg Tengi palm-oil mill in Selangor, is the first commercial Bio-CNG plant project based on palm oil mill effluent in the world undertaken by a joint venture between the Malaysian Palm Oil Board, Felda Palm Industries Sdn Bhd and Sime Darby Offshore Engineering Sdn Bhd....Malaysia: "All palm oil mills that planned to increase the supply of their fresh fruit bunch were required to install biogas trapping facilities since January 2014.  http://www.dailyexpress.com.my/news.cfm?NewsID=104175

18 September 2015: Biogas projects at REA and Musim Mas. Indonesia new regulations.

The palm oil plantations powering communities and tackling climate change - Palm oil mills are generating electricity using waste methane to the benefit of local communities and company profits Sponsored by: RSPO  By Oliver Milman Tuesday 15 September 2015 14.15 BST; The rapid expansion of palm oil cultivation has resulted in the creation of vast wastewater lagoons beside plantations in countries such as Indonesia and Malaysia, the world’s two dominant producers. These murky ponds, containing the brown-hued detritus from processed palm oil fruit, release a huge amount of methane into the atmosphere – a gas so potent it traps around 34 times as much heat as carbon dioxide....A typical lagoon emits the equivalent of 22,000 cars’ worth of greenhouse gases every year, according to a University of Colorado study published last year. Methane emitted from these lagoons accounts for more than a third of the greenhouse gas emissions created by the production of palm oil....Given the remote nature of most palm oil mills, it’s hard for businesses to sell this energy to the electricity grid, but REA Holdings has struck an agreement with Indonesia’s state-owned grid to power a nearby community. The joint venture began in April this year and will supply more than 8,500 households with methane-generated electricity.“We’ve experienced conflict with some local villages in the past over land compensation, so this is a good way of creating mutual interest,” says Sophie Persey, head of sustainability at REA Holdings. “[It] helps show the community the benefits of our operations, to improve their standard of living. We want to be there for 25, 50, 75 years, so we want to have good relationships and for everyone to benefit.” There is a financial upside for REA, of course – the company hopes the electricity sold will bring in $230,000 (£149,000) in the first year. What’s more, having slashed its diesel use from 2.8m litres a year to fewer than 500,000 litres, REA is better protected from fluctuations in the global oil price....... Other firms are seeing the potential, too. Indonesian company PT Musim Mas, headquartered in Singapore, is installing methane capture in its eight mills in Kalimantan and Sumatra, with an initial outlay of between $3-4m....The main hurdle – aside from upfront costs – has been a perceived lack of government backing. But Persey believes this is changing in Indonesia, with new regulations stipulating that the government must buy any renewable energy produced by palm oil mills. A further rule on mandatory methane capture may follow..... http://www.theguardian.com/sustainable-business/2015/sep/15/palm-oil-plantations-climate-change-electricity-generation-methane-capture


19 May 2015: Asian Agri completes two biogas plants soon, to build another 15 with total 30MW capacity within 10 years

Economy in brief: Palm oil mill effluent used to generate power The Jakarta Post, Jakarta | Business | Tue, May 19 2015, 8:56 AM; The Asian Agri plantation group will soon inaugurate the operations of two power generation plants fired by biogas from palm oil mill effluent (POME) which has mostly been emitted into the atmosphere, thereby contributing to greenhouse gas (GHG) emissions and global warming.“We have been building five POME-based biogas power generation stations in North Sumatra, Jambi and Riau, each with an installed capacity of two megawatts, and two of them are scheduled to start up operations later this month or early June,” Asian Agri managing director Kelvin Tio told The Jakarta Post.Tio said green activists had attacked the conversion of land into oil palm estates and POME as among the biggest emitters of GHG.“But by processing POME into biogas to generate electricity, we cut GHG emissions and at the same time develop a new source of renewable energy which is suitable for rural electrification.” Asian Agri, Tio said, conducts GHG calculations for all of its mills and estates annually to enable them to identify crucial areas in their production chain and thereby provide guidance on emission reduction. Auditors verify the GHG calculations for international sustainability and carbon certification (ISCC) and Roundtable on Sustainable Palm Oil (RSPO) certifications. Assuming households in rural areas each use 900 watts for 24-hour supply, each of the five biogas power plants can meet the electricity needs of 2,000 houses, he added. According to Tio, a palm oil mill with an hourly capacity of 60 tons that requires fresh-fruit bunches from 15,000 hectares of oil palm trees can supply enough biogas to generate two MW of power. “Asian Agri, which manages 160,000 ha of oil palm plantations, of which 60,000 ha are owned by smallholders, plan to build 15 more biogas power stations each with a 2-MW capacity within the next 10 years,” Tio added. - See more at: http://www.thejakartapost.com/news/2015/05/19/economy-brief-palm-oil-mill-effluent-used-generate-power.html#sthash.ZklUCQkO.dpuf


1 May 2015: Gas Malaysia in biogas tie-up with Sime Darby Offshore

Gas Malaysia partners Sime Darby unit in BioCNG distribution venture Published: 28 April 2015 3:03 PM Gas Malaysia Bhd has teamed up with Sime Darby Offshore Engineering Sdn Bhd (SDOE), a wholly-owned subsidiary of Sime Darby Bhd, to undertake biogas compressed natural gas (BioCNG) distribution business extracted from the palm oil mill effluent. In a filing with Bursa Malaysia, Gas Malaysia (fundamental: 2.1; valuation: 1.1) said it today signed a joint venture (JV) agreement with SDOE for the purpose. Under the deal, the two companies will form a JV company, in which SDOE will hold a 51% stake and Gas Malaysia the remaining 49%.........Gas Malaysia. It added that the JV will serve as a platform for the group to supply natural gas to new customers currently not serve by its existing pipeline. “The parties seek to optimise the combined strengths of each partner in their respective fields....SDOE is primarily involved in systems integration and marketing of products and services in the oil and gas/petrochemical industry. - See more at: http://www.themalaysianinsider.com/business/article/gas-malaysia-partners-sime-darby-unit-in-biocng-distribution-venture#sthash.AuLhMa2T.dpuf

Gas Malaysia in biogas tie-up with Sime Darby Offshore Wednesday, 29 April 2015; PETALING JAYA: Gas Malaysia Bhd has partnered with Sime Darby Offshore Engineering Sdn Bhd (SDOE) to distribute biogas compressed natural gas (BioCNG) extracted from palm oil mill effluent (Pome).
Pome is the voluminous liquid waste that comes from the sterilisation and clarification processes in milling oil palm. In its filing with Bursa Malaysia, Gas Malaysia said the rationale for the joint venture (JV) was to optimise the combined strengths of both parties in their respective fields. “The JV will serve as a platform for Gas Malaysia to supply natural gas to new customers currently not served by the company’s existing pipeline,” it said in a statement yesterday. The parties would form a JV company and have an eventual issued and paid-up capital of RM5mil divided into five million ordinary shares of RM1 each, with SDOE as the major shareholder with a 51% stake and Gas Malaysia, 49%. The JV company would be engaged in the provision of sale, supply and transportation of BioCNG as well as carrying out design, construction, installation and commissioning works, among others....... http://www.thestar.com.my/Business/Business-News/2015/04/29/Gas-Malaysia-in-biogas-tieup-with-Sime-Darby-Offshore/?style=biz

17 November 2014: I hear that the 2020 target is not being implemented. Only (a) new mills and (b) mills requesting licence for higher capacity must have methane capture.

Also note our recent posting: Wednesday, November 5, 2014, Sarawak biogas concerns
http://khorreports-palmoil.blogspot.com/2014/11/sarawak-biogas-concerns.html

5 Nov 2014: Sarawak biogas concerns

Palm oil mills’ biogas capture implementation in Sarawak a major challenge — Soppoa
Posted on November 5, 2014, Wednesday; "KUCHING: One of the progressive initiatives of the palm oil industry is the target to get all palm oil mills installed with biogas capture facilities for utilisation to eliminate methane gas released into the atmosphere.... The industry has been regulated by Malaysian Palm Oil Board (MPOB), which is imposing the mandatory installation of biogas trapping or methane avoidance facilities in palm oil mills as a condition for any new mill construction or existing mills applying for throughput expansion in the country.... “However, Soppoa would like to draw attention that the existing conditions in Sarawak is very different from that of Peninsula Malaysia in terms of infrastructure developments, legal implications as well as tariff considerations.”
Foremost, it said gridlines in Sarawak are still lacking which includes infrastructure for feed-in capability into the power grid for utilisation of power supply generated from palm oil mills in the State,as well as infrastructure for electricity supply to rural areas.... “Also, a significant number of mills are located in remote locations, which are quite a distance away from the main grid. Therefore, this could result in high implementation costs,” Soppoa underscored.... Secondly, the supply of electricity in Sarawak comes under the purview of Sarawak Energy Bhd (SEB) which oversees all power generation for domestic and industrial utilization. The cost of power generation by SEB in Sarawak is low, probably significantly below cost of production from palm oil mills.... Therefore, the industry will have to negotiate for a mutually acceptable feed-in-tariff rate with SEB.
To date, the palm oil industry had invested substantially in 67 palm oil mills in Sarawak..." http://www.theborneopost.com/2014/11/05/palm-oil-mills-biogas-capture-implementation-in-sarawak-a-major-challenge-soppoa/#ixzz3ICoIBqbz

1 April 2014: Malaysia regulations requires palm oil mills to install biogas facilities by 2020 and MPOB had proposed that from 1 Jan 2014, all new palm oil mills and existing ones should install full biogas capture or methane avoidance facilities.

So far, 60 out of 430 Malaysia palm oil mills have installed biogas production and only 4 are selling renewable energy to the grid. The problems at end 2013 included: a) high cost: At RM 9 million per MW, newer biogas plants can be set up for RM18 million– still a relatively high figure. FIT was non-competitive for some time: a 60 MT/hr palm oil mill installing a biogas power plant of about 1.8-2.0 MW capacity will gain about RM 3.34 million in revenue, RM 1.84 million net profit and a payback period of 9-10 years[1]; b) Low CER price: a 60 MT/hr palm oil mill will generate an estimate of 30,000-40,000 tonnes of CO2eq; with the current market price of EUR 0.60/tCo2e, the revenue generated for such a mill would be approximately RM 90,500 per year – not enough to cover the consultant fees! [2] Various less than favourable renewable energy policies should also be reviewed. (source: Green energy from palm-based biogas, BELL Group’s Experience On Biogas Capture by Liana Low, PIPOC, 19–21 Nov 2013 –  also refer to data updates and slides below).

BELL Group also points out that "energy from palm oil mill effluent / POME is a waste management issue and NOT just for ‘Power Generation Plants’. Methane could be upgraded to biomethane as a vehicle fuel. This could significantly reduce NGO criticisms & actually show governments in developed countries what renewable energy can achieve."  (source: ibid).

Data updates: [1] A 2.0 MW plant would have earned revenue of RM5.5mil a year on the old rate of 33.83 sen/kWh (2000 x 365 x 24 x 93% uptime x $0.3383/kWh). The new rate is 39.7 sen/kWh basic, plus potential bonuses of 1.99 sen (engine efficiency above 40%) and 5 sen (local engine). So 2MW plant will earn revenue of RM6.5mil, with potential to rise to RM7.6mil a year. [2] CER price now only EUR 16 cents (June settlement), see https://www.theice.com/emissions.jhtml.


On palm biogas for power generation, we were alerted by Gan Tee Jin to Malaysia’s Sustainable Energy Development Authority / SEDA's (http://seda.gov.my/) just announced (on 21 March 2014) substantial increase in feed-in tariff for biogas power.
  • Bonus tariff of 7.86 sen available for Biogas (Landfill/Sewage) has been opened to all sources of biogas by changing the definition to "use of landfill, sewage gas or agricultural waste including animal waste as fuel source".
  • Bonus tariff for "locally manufactured or assembled gas engine" was raised from 1 sen to 5 sen. Caterpillar is presently the only local assembler.
  • Bonus tariff for engines with at least 40% efficiency remains at 1.99 sen.
  • Degression rate changed from 0.5% to zero, meaning that projects implemented in later years enjoy the same tariff as this year.
A review and calculation prepared by Mr Gan Tee Jin and shared with Khor Reports finds: With the new tariff structure, 50km distance from the grid is likely viable for a 2MW biogas power plant (typical 60 tph mill with 300,000 tpy crop intake can do 2MW, with gas to spare for the boiler, provided good biodigester technology is used). Economies of scale do not favour smaller mills/power plants, but I suspect a 1MW plant will be viable if connection distance is within 10km. However, there are two potential bottlenecks - network capacity and feed-in quota - so the system may not be able to accommodate everyone. My reasoning is as follows: several projects have already been developed based on old FiT rate of around 34 sen/kWh, so I assume the bonus rates of 7.86 sen (landfill biogas) and 5 sen (local engine) go entirely to pay for longer connection distance. Extra revenue is 2000kW x (365 x 24) hrs x 93% uptlime x $0.1286 = $2.095 mil/year. Further assuming 7 year payback, the extra revenue justifies a capex of up to $2.095 x 7 = $14.6 mil or 58km of cabling @ $0.25mil/km. As a rough guide, I understand from Tenaga Nasional that the cost of installing overhead 11kV cables to be $0.25 mil/km.

Khor Report's comment: The Malaysia palm oil industry seeks to boost it sustainability efforts and this policy would help on GHG emission reduction measures[3]. It is notable that in developed countries, large corporations are promising to buy renewable-energy credits, to reduce their carbon footprints by going "100% green energy" [4]. The idea of clean energy is therefore gaining much attention and having a palm-based renewable energy sector is possible for Malaysia. However, two potential bottlenecks remain: network capacity and feed-in quota. How far will Malaysia power generation accommodate everyone in the palm oil sector? Assuming a 2MW biogas plant per mill, might 800MW from palm biogas be reached? Any technology uncertainties also have to be ironed out. Certainly from a business political front, we must take note of the current over capacity in power generation and the clout of the independent power producers or IPPs which also benefit from subsidised gas from PETRONAS, the Malaysia state-owned oil & gas producer. The rise of Malaysia palm biogas may not be straightforward, but the improved feed in tariff is promising . Undoubtedly, the palm oil sector will hope this will be supported by sufficient quota availability. So, watch this sector for constrained development within the context of Tenaga Nasional's monopoly. Other countries might consider an approach to liberalize power generation and permit oil palm mills to generate electricity via new local microgrids to serve new areas or to compete [5].

[3] Controversial new default values created by the European Commission point to why Europe is going cold on crop biofuels, but also highlights the benefits of methane capture; http://news.mongabay.com/2012/0130-biofuels_eu.html  

[4] How much progress have corporations made on their 100% clean power goals? theguardian.com, Tuesday 25 March 2014;  http://www.theguardian.com/sustainable-business/gallery/sap-renewable-clean-energy-goal-intel-microsoft-kohls-walmart; Software giant SAP on Monday said it plans buy enough renewable-energy credits to figuratively power 100% of its worldwide operations with clean energy. The company joins a growing number of businesses gunning for 100% green energy. Which corporations have made the most progress so far?

[5] Khor Reports' Palm Oil e-newsletter Nov/Dec 2013, "Time for New Strategies?": Reconsider the role of palm oil in local energy use. Malaysia’s biogas directive is a good starting point. Set for 2014 launch, it requires every mill to set up a biogas facility for methane capture; presumably to improve the greenhouse gas (GHG) profile for Malaysian palm oil. Aside from implementation and technological risks, there are obvious suggestions to improve Malaysia’s feed-in tariff for biogas power and allow easier grid connection. Khor Reports suggests a feasibility study on microgrids for remote areas. In the semi-urban zone this might challenge an incumbent power utility and it would work less well in countries with subsidized power. However, could this help firmly establish the localized use of palm biogas, biomass and biodiesel in new places? Many developing countries sorely need power in certain rural areas. They could encourage mills siting next to a mining facility or another energy hungry user. Economists might plan for processing clusters that could aid rural development.