Environmental ramifications and economic viability of bioethanol production in Malaysia

Abstract

This paper employs a partial equilibrium model to investigate the economic and environmental impact of commercial bioethanol production from biomass on the Malaysian agricultural markets. The results show that the palm oil mills can produce bioethanol commercially as the mills utilize the waste biomass created onsite and thus avoid the feedstock and hauling costs. Furthermore, by consuming biomass that recycles carbon dioxide from the atmosphere, a large bioethanol industry would help Malaysia reduce its GHG emissions and meet its GHG commitments in the Paris Agreement. With a potential to lead to greater forestation as landowners clear rainforests to enlarge oil palm plantations, such an industry could also be expected to expand the agricultural industry, reduce the agricultural prices, and raise agricultural employment.