COMPARATIVE ANALYSIS OF CURRENT BIOMASS UTILISATION BY PALM OIL MILLS IN PENINSULAR MALAYSIA

Abstract

Oil palm biomass, which includes empty fruit bunches (EFB), mesocarp fibres (MF), palm kernel shells (PKS), and palm oil mill effluent (POME), are no longer seen as low-value residue, but as valuable economic resources that may contribute positively to national wealth. These oil palm biomasses can be converted into high value-added products, which can in turn generate additional revenue for the country. This study aims to identify the current biomass utilisation by palm oil mills in Peninsular Malaysia and examine the economic viability of biomass products generated by these mills across different categories. This study uses primary data obtained through a census of all 242 Malaysian Palm Oil Board-licensed palm oil mills in Peninsular Malaysia. The data were analysed using descriptive analysis and independent samples t-test. The study found that incineration is the most profitable approach for EFB, followed by selling EFB to other parties. However, due to environmental regulation and the lack of market for EFB, most of the resources (62.4%) were either returned to plantations or sent to landfills. In addition, 92.4% of MF generated were utilised for electricity generation through in-house boilers and this alternative has been proven to provide maximum profit to palm oil mills. The study also found that although selling PKS to other parties was proven to provide better profits to the palm oil mills, the PKS were mostly utilised for electricity generation through in-house boilers. Lastly, for the sludge from POME, there was no significant difference in the utilisation of the sludge, either if it was used for plantations or sold to other parties.