Economics of sustainable lignocellulose biomass and biofuel logistics in Malaysia

Abstract

Lignocellulose biomass is an inedible and renewable resource that can be used to produce biofuels sustainably and thus help to mitigate climate change while helping to ensure energy security. Tropical countries like Malaysia are assumed to have abundant biomass resources, but the fragmented farming landscapes common in Southeast Asia raise challenges for biofuel production, which largely stem from logistics operations and have an adverse impact on economies of scale and the viability of biorefineries. This thesis seeks to understand the costs and supplies associated with biomass transport, assess the impacts of landscape fragmentation on biorefineries, and identify optimum biorefinery locations. Ten sources of biomass (agroforestry residues from fields, sawmills, and processing plants) were considered, taking into account various logistical factors, supply scenarios, and impacts of landscape fragmentation. The study began with a simulation of biomass transport across Peninsular Malaysia, using GRASS GIS software to estimate costs and supplies. Eighty-nine points within each district were designated as potential locations. Biomass transport was recorded as a major cost component in operational expenditures. The capital expenditures for various conversion pathways and biorefinery operations were estimated across relevant orders of magnitude, with the biofuel supplies also being simulated. The study identified four optimum locations for various types of biomass, presenting detailed cost and supply structures. The two most competitive biomass types are rice straw and pressed palm fibre (PPF). Costs ranged a) from 130.6 to 206.3 USD/tonne, yielding 0.47 to 0.97 million tonnes of PPF fermented biofuel per year, and b) 123.2 to 207.8 USD/tonne for rice straw, yielding 0.49 to 0.56 million tonnes of fermented biofuel per year. In tonnes of oil equivalent (toe), both together amounted to 5–7% of Malaysia’s annual petroleum consumption. Surprisingly, the findings suggest that an abundance of biomass does not necessarily result in lower biofuel costs, because factors such as spatial fragmentation and moisture content amplify transport costs. Our analysis emphasises the need for strategic planning, including the use of larger trucks, early moisture removal, and the establishment of local consolidation centres to manage biomass effectively. It highlights the need for a more holistic and strategic approach in order to understand supply zone specifics with a view to unlocking Malaysia’s potential for sustainable biofuel production.