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Tuesday December 4, 2012
Commodities Talk- by Hanim Adnan
THE development of green energy plantations in Malaysia may sound a bit far-fetched at one point but current initiatives by the Government, with the support from investors, to transform it into a big commercial venture is progressing well.
Therefore, many believe that Government-identified energy plants such as jatropha (scientifically known as jotropha curcas), kenaf (hibiscus cannabinus), forest mangrove (acacia mangium) and the latest, petai belalang (leucaena leucocephala) would soon form part of the country's landscape similar to oil palm, rubber or cocoa plantations here.
Jatropha and kenaf are widely used in the production of biodiesel. Kenaf biomass can also be used in the making of many agricultural and industrial applications such as paper pulp, thermoplastic, composite, non-woven and geotextile while petai belalang in the production of industrial sugar, furniture and animal feed.
In fact, jatropha, kenaf and petai belalang have been singled out as the green renewable energy feedstocks to support the growth of the local biofuel and biotechnology sub-sectors which in turn are poised to be the contributors to Malaysia's new bio-economy sector.
What is most encouraging is investors' interest in energy plantations involving investments worth billions of ringgit for the past two years.
Bionas Group, for example, has successfully developed jatropha planting with an available plantation land bank of about 1.4 million ha of plantable area that has been contracted with thousands of land owners, mostly smallholders.
Another major investment is the setting up of an RM2bil biorefinery in Terengganu between South Korea-based CJ CheilJedang Corp and France-based Arkema SA as announced in October.
A biorefinery takes advantage of the various components in biomass, such as the acacia mangium and petai belalang, and their intermediates, to maximise the value derived from the biomass feedstocks.
A Government official was reported as saying that the interest to set up the biorefinery plant was due to the petai belalang factor. The Terengganu state government, in fact, has allocated some 30,000ha for the cultivation of petai belalang that will stand to benefit farmers and other related industries.
It is envisaged that about 10.5 million tonnes of wood chips could be produced annually from the petai belalang plantations to supply to the biorefinery plant.
Another plus factor is that petai belalang and kenaf have also been identified as the alternative cash crop, especially for tobacco growers in Terengganu and Kelantan.
The move by the Government to terminate subsidies on tobacco farming to comply with the Asean Free Trade Area and World Trade Organisation regulations since 2010 had made it difficult for local tobacco farmers to stay viable and become uncompetitive compared with their low-cost peers from Thailand, Indonesia, Vietnam and the Philippines.
Hence, one question to pose here is whether the green energy plantations will be able to rival the oil palm or even rubber plantations?
While it holds promising prospects, an industry expert said that as a commodity-based feedstock, it will be subject to market forces and volatile nature of the commodity market.
However, making available alternative new cash crop to local smallholders or farmers will certainly help to boost their existing income from the traditional crops such as palm oil, rubber, cocoa and tobacco.
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