Report on Biogas Capture at 

Palm Oil Mills

Prepared by

MALAYSIAN PALM OIL BOARD

MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES, MALAYSIA
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Introduction

One of the biggest factors that has currently handicapped the palm oil industry in meeting 

stringent sustainability requirements is the emission of methane, a greenhouse gas (GHG) 

from anaerobic digestion of palm oil mill effluent (POME). Biogas contains about 65% 

methane which has 21 times the global warming potential of carbon dioxide. The free 

emission of biogas into the atmosphere without an effective biogas capture mechanism is not 

only wasting the energy potential that biogas can generate, but also causes global warming.

Countries importing palm oil products, particularly palm biofuels are concerned about the 

sustainability of palm products. A few countries, e.g. the EU and USA are in the process of 

imposing sustainability standards which includes minimum GHG emission savings 

requirements for biofuels. Without harnessing of biogas from POME, palm oil products 

become unfavourable for the export market. Without meeting the GHG threshold, palm oil 

products may not be eligible for the incentives provided. In this case, the marketability and 

prosperity of palm oil will be adversely affected. With the proper technical configuration, 

biogas generated from POME can be utilized for thermal and electricity applications. The 

excess electricity generated can also be supplied to the national grid. Under Entry Point 

Project No. 5 of the National Key Economic Areas (NKEA), all palm oil mills are 

encouraged to install biogas trapping facilities by 2020.

Status of MPOB Census on Biogas Captured and Utilization at Palm Oil Mills 

The survey form on POME and biogas for renewable energy application in palm oil mills has 

been sent out to all mills on 29 November 2010 with the enforcement circular for mandatory 

response. The contents of the survey form include oil extraction rate (OER) of palm oil mills, 

POME treatment and biogas trapping facilities. In February 2011, 422 mills have responded 

and submitted the survey forms. After the survey, the status of mills with biogas trapping 

facilities is now updated from 28 to 38 mills. The number of mills with biogas plants under 

construction is 34. On the other hand, 47 mills are planning to have biogas trapping facilities 

at various stage from 2012 – 2020. The summaries of current status of the biogas 

implementation at palm oil mills are given in Table 1. Currently, Felda has completed 10 

biogas plants and 15 more plants are still under construction. Felda is expected to have 59

biogas plants implemented throughout the country by 2020 and some of these biogas plants

will have connection to the national grid.
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Table 1: Status of Biogas Capture Facility at Palm Oil Mills

State

Number of Palm Oil Mills

Completed Biogas Facility Under Construction Under Planning

Johor 9 1 9

Selangor 2 3 1

N. Sembilan 4 1 1

Sarawak 2 2 3

Sabah 5 16 15

Pahang 4 1 8

Perak 7 5 4

Kedah 2 1 1

Terengganu 2 1 3

Kelantan 1 1 1

Melaka 0 1 1

Penang 0 1 0

Total 38 34 47

Biogas Capture Technology

The present treatment of POME in open lagoon ponding systems includes the cooling pond, 

anaerobic pond, facultative pond and aerobic pond. Poor management of the ponds will result 

in failure to comply with local discharge standards. Without complete anaerobic digestion 

systems, the quantity of biogas emitted is not economical for capture. POME treatment in the 

mills is either by the open ponding anaerobic digestion system or the closed reactor type. 

The types of technologies used to trap and utilize biogas in palm oil mills include covered 

lagoon and digester tank. From MPOB survey (2011), 24 out of 38 biogas implementing 

mills use digester tank technologies (Figure 1). 
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Figure 1: Type of Technology Used to Trap Biogas in Palm Oil Mills.

Biogas Utilization in Palm Oil Mills

There are various approaches in utilizing biogas trapped in palm oil mills. With proper 

technical configuration and system, biogas generated from POME can be directly converted 

into useful energy either as thermal energy, electricity or both. Basically, setting up biogas 

plants in palm oil mills would be beneficial to millers that require additional energy for the 

downstream activities such as empty fruit bunches (EFB) fibre processing plant or kernel 

crushing plant, as well as for grid connection purpose under the Small Renewable Energy 

Power (SREP) Programme. The captured biogas can also be upgraded and stored like natural 

gas for transportation or vehicles used in palm oil mills. Current types of biogas utilization in 

palm oil mills are given in Figure 2. 
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Figure 2: Biogas Utilization in Palm Oil Mills

Policy on Biogas Capture

In line with the country’s commitment to intensify the development of renewable energy 

(RE), the Ministry of Energy, Green Technology and Water has been actively looking into 

and has initiated the drafting of the National Policy on RE. Some strategies to encourage RE 

may be incorporated under this new policy, e.g. the RE fund, Feed-in Tariff (FiT) agreement, 

incentives, R&D, institutions and legal framework. The policy will also incorporate the 

much-awaited FIT already in force in some developing countries. This allows anyone 

wanting to produce power to supply such power to the grid, and get paid for it. Every mill 

with a biogas capture system installed can generate biogas and become a power producer.

Other government policies and programme that promote and encourage the utilization of 

biogas include the National Fifth Fuel Policy which include Renewable Energy as one of the 

country’s fuel mix, the SREP Programme for grid connected purpose and the National Green 

Technology Policy.

Currently, all government policies are not to mandate palm oil mills to capture biogas 

generates from POME. These criteria to make millers are eligible for Clean Development 

Mechanism (CDM) application.
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Clean Development Mechanism (CDM) for Biogas Capture

The Clean Development Mechanism (CDM) is a scheme under the Kyoto Protocol, United 

Nations Framework Convention on Climate Change (UNFCCC) which helps developing 

countries achieve sustainable development through the sale of certified emission reductions 

(CER), or carbon credits, to developed and industrialized countries. The palm oil industry can 

benefit from the scheme by capturing biogas to earn CERs. The scheme helps developed 

countries meet their emission reduction targets under the Kyoto Protocol and at the same time 

helps the palm oil industry meet increasingly stringent sustainability requirements.

Although biogas from POME has great potential as RE, the capture of biogas is not actively 

adopted by the industry due to several issues related to costs, benefits, risk, poor logistics 

associated with national grid-connection, FiT, technology maturity and a lack of interest from 

mills which are operating in a comfort zone. However, the business-as-usual attitude in the 

industry is beginning to change.

The biogas projects in reducing GHG emissions can earn CERs that can then be traded to

cover the capital expenditure. Through the CDM, the viability of these projects can be 

enhanced and investment costs can be recovered within a shorter period by trading of CERs. 

At this moment, the biogas projects from oil palm sector have not yet generated CERs.

However, there are a few biogas projects from palm oil mills elsewhere in the world that have 

been issued with CERs. According a technology supplier, Biotec International, there are three 

biogas projects in palm oil mills located in South America have been granted with CER with 

total 282535 tonnes CO2 equivalent in 3 years. These palm oil mills are Eecopalsa POM 

(Honduras) which is the first biogas plant granted with CER in 2006, El Espino POM (Peru) 

and Agrotor POM in Honduras. 

Incentives for Renewable Energy (RE)

Commercial and industrial business entities which are involved in energy business using 

renewable energy resources (e.g. biogas from palm oil mills) for generation of electric power 

or sell to local utilities provider distribution grid system are eligible to apply for fiscal 

incentives.
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Life Cycle Assessment of Palm Biodiesel

Figure 3: Palm Biodiesel Production, Transport, Distribution and Combustion Pathway 

Oil Palm Plantations

Crude Palm Oil Production

Crude Palm Oil Transportation

Refining of Crude Palm Oil 

Refined Palm Oil Transportation

Biodiesel Production

Biodiesel Combustion

Biodiesel Transportation and Distribution

Fresh Fruit Bunches Transportation
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Reduction of Greenhouse Gas (GHG) Emissions

Life cycle assessment on the production of biodiesel from palm oil has shown that GHG 

emission savings exceeding 50% (no biogas trapping) and almost 80% (with biogas trapping) 

can be obtained.

Palm Biodiesel Production Pathway

Table 1: Total emission for the production of palm biodiesel

Emission (g CO2 eq / MJ)

Oil palm plantations 6.69

Processing 

(1) Without methane capture 29.66

(2) With methane capture 7.95

Transport & Distribution 4.66

Total

(1) Without methane capture 41.01

(2) With methane capture 19.30

Table 2: Breakdown emission for the production of palm biodiesel

Oil palm plantations Emission (g CO2 eq / MJ)

N fertilizer 1.37

P2O5 fertilizer 0.17

K2O fertilizer 0.23

Pesticides 0.78

Diesel 0.90

Emission from field 3.24

Processing Emission (g CO2 eq / MJ)

Production of crude palm oil

(1) Without methane capture 21.71

(2) With methane capture 0.00

Refining of crude palm oil 0.63

Transesterification 7.32

Transportation Emission (g CO2 eq / MJ)

Fresh fruit bunches transportation 0.11

Crude palm oil transportation 0.38

Refined palm oil transportation 0.38

Biodiesel transportation 3.03

Biodiesel distribution 0.76
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Table 3: GHG emission saving for the production of palm biodiesel

Production pathway GHG Emission Saving (%)*

(1) Without methane capture 55.9

(2) With methane capture 79.2

*Note: The diesel fuel comparator used is 93g CO2e/MJ

Assumptions:

1) Two scenarios are taken into consideration for the production of palm biodiesel in 

Malaysia, viz (1) production of biodiesel without methane capture at the palm oil 

mills and (2) production of biodiesel with methane capture at the palm oil mills.

2) Fertilizers input used for the calculation of emission from oil palm plantations (Table 

4) is based on average values (based on hectarage) obtained from 102 plantations in 

Malaysia.

Table 4: Fertilizers, pesticides and diesel usage for 105 plantations

Input I/O Unit Amount

N fertilizer Input kg/tFFB 3.49

P2O5 fertilizer Input kg/tFFB 2.8

K2O fertilizer Input kg/tFFB 11.5

Pesticides Input kg/tFFB 0.126

Diesel Input litre/tFFB 2.37

Yield Output tFFB/ha.a 20.5

3) Transportation of fresh fruit bunches, crude palm oil and refined palm oil are based on 

diesel consumption and trucks available in Malaysia.

4) Biodiesel produced is transported via ship over a distance of 5,500 nautical miles 

(10,189 km) for distribution (exports).

5) Allocation of co-products such as palm kernel and glycerine are carried out based on 

energy allocation.