In the heart of Malaysia’s palm oil belt, Johor Plantations Group Berhad (JPG) is converting challenges into profit, setting new benchmarks in the palm oil plantations industry by transforming palm oil mill effluents (POME) into biomethane, also known as renewable natural gas.
Through its pioneering venture into commercial biomethane production, JPG is championing a cleaner, more sustainable approach to the palm oil industry by developing new income streams from green practices that can generate more than RM60 million in revenue over a five-year period from 2024 to 2028.
Challenging The Industry Status
POME is wastewater generated by palm oil extraction and purification activities that may become a major environmental pollutant if left untreated. Industry players are required to capture biogas from POME at their palm oil mills by installing mechanisms to trap the biogas in wastewater facilities, in line with the Malaysia Palm Oil Board (MPOB)’s mandatory requirements to manage oil palm waste sustainably
In Malaysia, this process is regulated by several bodies, including the aforementioned MPOB, as well as the Department of Environment under the Environment Quality Act (1974) to ensure that biogas’ adverse impact on the environment is effectively mitigated.
JPG is setting new benchmarks in the industry by not only capturing biogas from POME, but advancing further to convert the biogas into biomethane. This is significant because biomethane is cleaner, more efficient and more importantly, has commercial applications as it can be used interchangeably with natural gas systems.
Biomethane releases much less carbon dioxide (CO₂) than coal or petroleum, as well as produces fewer air pollutants like sulphur dioxide and nitrogen oxide. This helps lessen its impact on climate change. It is also an effective transitional “bridge fuel” supporting the shift to renewable energy by providing an alternative to natural gas produced by the oil and gas industry.
Capturing New Opportunities in Sustainability
In addition to using biogas to power its mills, JPG is also able to produce biomethane commercially by leveraging it as a form of secure green energy from domestic sources. A pivotal step in this journey was the establishment of JPG Greenergy Ventures (JPGGV), a joint venture between JPG and MTC Orec Sdn Bhd as the technical provider. This collaboration brought together JPG’s palm oil operations with MTC Orec’s renewable energy expertise to successfully produce biomethane from POME at JPG’s Sedenak palm oil mill.
Building on this success, JPGGV signed a significant purchase agreement with Gas Malaysia Berhad’s (GMB) subsidiary, Gas Malaysia Green Ventures Sdn Bhd (GMGV) in 2019. This RM25 million project marked a major milestone as JPG committed to injecting a minimum of 250,000 MMBtu of biomethane gas into the Natural Gas Distribution System over 15 years. JPG’s relationship with GMGV was further enhanced with another gas purchase agreement between JPG’s subsidiary, JPG Greenergy, to supply a minimum of 350,000 MMBtu of compressed biomethane for 15 years. This biomethane will be sourced from two new plants currently under construction at Tereh and Sindora.
JPG’s pioneering efforts in sustainability have been recognised with the prestigious BioNexus Status awarded by the Malaysian Bioeconomy Development Corporation (under the Ministry of Science, Technology & Innovation) to JPGGV. This status acknowledges JPGGV’s commitment to biotechnology research and enables access to valuable incentives, funding, and opportunities for collaboration with local academic institutions.
With these opportunities on the horizon, JPG’s new bioenergy pillar is expected to produce a capacity of up to 676,000 MMBtu and generate a gross profit margin of 40% to 50% per year over a five-year period from 2024 to 2028.
Responsibility to the Future
The capture of biogas and its conversion into biomethane for commercial use at scale in the palm oil industry is crucial in supporting global efforts to combat climate change. This is because raw methane released into the atmosphere is a greenhouse gas (GHG) capable of trapping 80 times more heat than carbon dioxide over a 20-year period.
Malaysia’s National Energy Transition Roadmap aims for renewable energy, which includes biomethane, to comprise 70% of the total installed energy capacity by 2050. This will continue to fuel the increasing global demand from governments, corporations, and other organisations for clean and sustainably produced energy.
JPG is ready to be at the forefront to shift the industry towards meeting the demand for clean energy, whether it be locally or internationally. By being among the pioneers in commercialising biomethane production from POME, JPG is taking significant steps towards normalising sustainable efforts in reducing GHG and promoting a cleaner energy landscape. This initiative, which is expected to avoid approximately 217,543 metric tonnes of CO2 equivalent GHG emissions, underscores the transformative impact of its waste management solutions within the palm oil mill industry. It also reflects JPG's alignment with Malaysia’s renewable energy ambitions and environmental sustainability goals.
JPG as a Next Generation Palm Oil Company
This strategic approach to converting waste into wealth enables JPG to enhance energy efficiency while establishing itself as a leader in sustainable agricultural practices. This is in line with its massive transformation purpose, which is to produce sustainable essentials for mankind, with the aim of harmonising economic growth with environmental care and social responsibility.
JPG’s bioenergy pillar will also fuel the Group’s ambitions to become the globally preferred producer of premium sustainable and traceable oils and fats. Through its commitment to innovation, resource efficiency and market differentiation, JPG will be able to achieve long-term growth and success that will create positive impacts on the environment and society.
By continuing to explore innovative solutions and leveraging its expertise in the palm oil industry, JPG remains committed to being the next generation of palm oil companies that build a sustainable future for the environment and generations to come.
