AMITA Group to Expand Material Circulation Business and Support for Low-Carbon Energy Transition in Malaysia: Partnering with a Malaysian company to assess and develop a business model for converting unused biomass materials into biofuels

AMITA CIRCULAR DESIGN SDN. BHD. (ACD, AMITA Group's Malaysia-based regional headquarters for Asia-Pacific) signed a memorandum of understanding on September 2, 2024, for strategic business alliance with Cenergi SEA Berhad (Cenergi). Cenergi is part of the UEM Lestra Berhad--which is owned by the Malaysian government--and is engaged in the renewable energy business in Malaysia.
Under the partnership, ACD and Cenergi are to conduct a joint commercial feasibility study on converting unused biomass materials into biofuels and develop a business model around it. More specifically, the two companies will develop a business case for converting empty fruit bunches (EFBs), which are residual fibers obtained after extracting the fresh palm fruit in a palm oil production process, into alternative biofuels and supplying them to corporate customers in Malaysia and Japan. The proposed business model is expected to help AMITA BERJAYA SDN. BHD., a joint venture established by ACD and the Malaysia-based NAZA Group, in expanding its closed-loop resource-recycling business in Malaysia, and to serve as a steppingstone for ACD to assist corporate clients in achieving low-carbon operations by switching energy sources from coal and other fossil fuels to biofuels.

MOU signing ceremony between ACD and Cenergi on September 2, 2024

1. Overview of the MOU

ACD has signed an MOU for a joint commercial feasibility study with Cenergi, a Malaysia-based company in the renewable energy business. Cenergi works with palm oil manufacturers to collect methane gas from liquid waste produced by palm oil mills and uses it to generate electricity. The company is Malaysia's largest generator of electricity from palm waste, commanding a 12.8% share of the market.
The initial phase of the partnership between ACD and Cenergi includes conducting a joint commercial feasibility study on converting EFBs into alternative biofuels and developing a business model around it. Global demand for biofuels is expected to surge to 176 billion USD in 2024 and 244 billion USD in 2030, bolstered by sharply increasing needs for renewable energy. ACD intends to assist corporate clients in diverse industries in achieving low-carbon business operations by switching energy sources from coal and other fossil fuels to biofuels.

<Projects agreed in the MOU>

・Joint feasibility study on the commercial use of EFBs and other unused biomass materials
・Joint study on investing in a commercial plant to manufacture EFB briquettes

<About Cenergi>

2. Background

The Malaysian government is committed to achieving net-zero carbon emissions by 2050, and its 12th Malaysia Plan--announced in 2021 for 2021 through 2025--has set the goal of reducing the country's GHG emissions by 45% from the 2005 level by 2030. The National Energy Transition Roadmap, unveiled by the government in 2023, defines bioenergy as one of six energy transition levers for the country and sets the goal of increasing national biofuel production capacity to 3.5 billion liters and bioenergy power generation to 1.4 gigawatts by 2050. In the neighboring region, Singapore introduced a carbon tax policy in 2019, and Thailand is scheduled to follow suit in 2025. Malaysia is expected to introduce one by 2030. For many Malaysian businesses, transitioning to low-carbon operations has become an increasingly pressing issue.
Malaysia is the world's second-largest palm oil producer after Indonesia and produces 19 million metric tons of EFBs in the process annually, most of which are left unused or underused in oil palm plantations due to their tough nature and chemical composition.
In light of the growing need to switch to low-carbon operations and biofuels among businesses in Malaysia, as well as the enormous amount of hard-to-disintegrate EFBs produced annually as byproducts at palm oil mills in the country, ACD intends to step up its effort to assess and develop a business case for converting EFBs and other unused biomass materials into biofuels.

3. Next steps

ACD plans to start making commercial use of unused biomass materials in Malaysia within the next few years. The company is also considering applying the findings and insights to be gained from the commercial feasibility study and business development in Malaysia to Indonesia, which is facing similar challenges to those in Malaysia. Furthermore, the AMITA Group will accelerate the pace of expanding beyond Japan its Social Systems Design Business, which aims to assist businesses and municipalities in achieving greater corporate and community sustainability and includes Cyano Project, originally developed and offered in Japan by the Group to assist in developing low-carbon, circular business models.

4. About ACD

ACD started recycling industrial waste into cement alternative materials and fuels and supplying them to the cement industry in Malaysia in 2017. Since June 2024, the company--in collaboration with a local university--has been conducting a proof-of-concept field test in Malaysia of MEGURU STATION^®, a mutually supportive community resource collection site originally developed and deployed in Japan by the AMITA Group.

5. Click the links below to see AMITA HOLDINGS press releases on related topics:

February 8, 2024
AMITA HOLDINGS renames its Malaysian subsidiary AMITA CIRCULAR DESIGN SDN. BHD., which serves as its regional headquarters for Asia-Pacific

June 10, 2024
AMITA Group initiates the first PoC field test of MEGURU STATION® outside Japan, in Malaysia

August 13, 2024
AMITA Group to start closed-loop resource recycling in Indonesia

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