This article first appeared in Forum, The Edge Malaysia Weekly on May 1, 2023 - May 7, 2023

Prime Minister Datuk Seri Anwar Ibrahim declared at Invest Malaysia 2023 that his government was committing to a RM10 million seed fund to act as an assured demand for Malaysian-generated carbon credits in support of the national journey to achieving net-zero emissions. Although Malaysia’s commitment to becoming a carbon-neutral nation by as early as 2050 is highly appreciated, it is also time to reflect where it stands today.

In 2021, Malaysia’s carbon emissions per capita was 7.63 tonnes, according to Our World in Data, based on the Global Carbon Project (2022). Neighbouring countries such as Indonesia (2.26 tonnes), Singapore (5.47 tonnes) and Thailand (3.89 tonnes) with lower carbon emissions have been progressing by leaps and bounds and appear to be ahead of Malaysia.

Electricity and heat generation and road transport together contribute close to half of the country’s greenhouse gas (GHG) emissions. This explains why Anwar has emphasised the need to enhance our focus on investment in green growth areas including hydrogen technology, bioenergy and electric mobility.

This is a great move since the government’s support for biofuels has so far targeted only biodiesel. The government launched the National Biofuel Policy in 2006 to promote the commercialisation, use, export and research of biodiesel derived from palm oil.

Unlike its neighbours such as Thailand, the Philippines and Vietnam, which have been successful in stimulating demand for ethanol fuel, Malaysia has no policy support for ethanol, hence it is neither produced nor consumed.

According to Statista, gasoline fuel usage in Malaysia has increased from 14 billion litres in 2012 to approximately 17 billion litres in 2022 (see Figure 1). As transport will become much more electrified, only electrical vehicles will dominate light vehicle fleets and enter markets with well-developed power grids. Long-haul transport is unlikely to be fully electrified anytime soon due to the higher energy density it requires. Hence, ethanol is still an important alternative to fossil fuels, complementing the enhanced role of electrification and other urban measures.

Ethanol is a fuel that extracts sugars to create alcohol. Sources of sugars for the production of ethanol enable us to differentiate between first- and second-generation ethanol. Sugar sources for first-generation ethanol are molasses or starch, whereas second-generation ethanol is produced from sugars extracted from cellulose and hemicellulose. These are found in feedstocks such as wheat straw, corn stover, wood and agricultural residues.

Currently, first-generation ethanol is used mostly in transport. Large increases in second-generation ethanol are expected soon because it reduces the strain on the use of land for food production. Furthermore, because it is produced from agricultural waste or biomass, second-generation ethanol can reduce GHG emissions by over 80% as compared with gasoline (see Figure 2).

The palm oil industry is one of the primary biomass producers. Oil palm biomass, including oil palm fronds, empty fruit bunches, palm kernel cakes and pressed fibre are all sources of biomass. They are typically composed of lignin and a number of chemically bonded carbohydrate polymers. Being the world’s second-largest palm oil producing and exporting country, Malaysia produced approximately 13 million tonnes (dry weight) of biomass in 2022. So, can the abundance of biomass resources be utilised?

A biological solution to this is that a combination of customised enzymes and yeast can upgrade this biomass to ethanol. Pre-treatment is an important aspect of the production of second-generation ethanol. It helps to alter the size, structure and chemical composition of biomass, which enhances the hydrolysis process to produce high quantities of fermentable sugars. There are several types of pre-treatment methods. These include steam explosion, acid treatment, alkaline treatment, organic solvents or a combination of these methods.

Historically, enzymes were significantly affected by feedback inhibition resulting from glucose production, which led to ineffective conversion. A later generation of cellulolytic and xylanolytic thermostable enzymes was developed to eliminate this effect on the enzyme complex. These enzymes can efficiently hydrolyse cellulose and the hemicellulose complex and convert pre-treated lignocellulosic materials to fermentable sugars. While the optimal conditions may vary with specific pre-treated substrates and process conditions, operation of the enzyme hydrolysis process at a temperature range of 50°C to 55°C and a pH of 4.74 to 5.25 is preferred.

The ethanol yield was low earlier because of the inability to ferment C5 sugars; that is, cellulosic sugars that can be used as renewable resources. Nonetheless, the hurdle of optimising the ethanol yield has been overcome, especially by using an advanced yeast strain that can tolerate high levels of inhibitory compounds commonly found in cellulosic hydrolysate. A specially developed yeast enables co-fermentation of both C5 and C6 sugars with quick xylose utilisation and high ethanol yield. Just like the first-generation ethanol production, second-generation ethanol is recovered from the fermentation broth through the distillation process, while thin stillage and lignin cakes are collected and sold as co-products.

Although it seems like fiction, Brazil’s Raízen proves that it is technically and commercially viable to produce second-generation ethanol. The global leader in the production of first- and second-generation ethanol has already sold one billion litres of second-generation ethanol. In addition, St1, a Finland-based company, and Versalis, an Italy-based company, have also demonstrated that it is possible to utilise biomass such as softwood and hardwood in ethanol production.

While certain kinds of oil palm biomass are used for different purposes such as solid fuels for steam boilers and mulch for oil palms, many of them have still not been explored for their uses. Furthermore, it is also not a surprise to see several types of biomass disposed of at the oil palm plantations without a controlled method in place for the same during high cropping months.

So, if we can upgrade the remaining oil palm biomass to second-generation ethanol, it could help contribute to emission climate neutrality. Assuming half of the palm oil biomass produced by Malaysia had been used for second-generation ethanol production, it would have produced around 1,000 million litres of ethanol. This is around 6% of the gasoline fuel usage in the country in 2021. Although this cannot completely address the needs, it is definitely a great start for a second-generation ethanol journey.

When we replace fossil fuels with the thus-produced second-generation ethanol, it could potentially save carbon emissions equivalent to 1.9 million tonnes of carbon dioxide, which corresponds to taking 429,000 vehicles off the road every year.

It is possible to valorise oil palm biomass with biological solutions, rendering Malaysia more sustainable and environmentally sound in a climate action world. But such a transformation cannot happen without an ecosystem approach involving three key enablers.

When asked why no one would take a lead in converting palm oil biomass into value-added products, it is not uncommon to hear the concern voiced on supply chain security. This is relevant especially because most of the palm oil mills are located in the middle of nowhere. So, it is important for the government to set a holistic direction to capitalise on Malaysian biomass by channelling it into higher-value downstream uses. State-owned companies can be the role model for what a circular bioeconomy business looks like for the country.

The development and adoption of biological solutions requires substantial investments. So, incentives and funding options must be made available to the operators to encourage them to adopt new technologies and processes and invest in research and development. Of course, to ensure progress and its impact, the incentives should be linked to specific outcomes or milestones.

Emerging technologies such as biotechnology are likely to fundamentally reshape the jobs landscape and will foster significant changes in how employees perform their jobs. Hence, there is an urgent need to create a skilled and diverse workforce, both by upskilling the existing labour pool, and by attracting and developing future talent in the country.

Hong Wai Onn is a chartered chemical engineer and a fellow of the Institution of Chemical Engineers and the Royal Society of Chemistry. He is the author of A Chemical Engineer in the Palm Oil Milling Industry.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's AppStore and Androids' Google Play.