State-owned POIC Sabah Sdn Bhd, the developer of Lahad Datu Palm Oil Industrial Cluster (POIC Lahad Datu), signed a memorandum of understanding with Evolution Energy LLC of the United States, here, Monday, that could translate into a RM500 million investment to produce gasoline, diesel, aviation fuel and clean burning coal from oil palm fronds and trunks by late 2015.
At the signing ceremony, Evolution Energy was represented by its Chairman cum Chief Executive Officer (CEO) Dr Eugene Conti and President Joseph Davis, while POIC Sabah was represented by its CEO Datuk Dr Pang Teck Wai, according to a statement issued by POIC Sabah.
If all goes according to plan, it said Evolution Energy was expected to acquire some 50 hectares of land at POIC Lahad Datu for five plants - three for the production of liquid biofuels and two for manufacturing the environment-friendly Nucoal, a solid biofuel.
These plants are estimated to require up to one million tonnes of biomass, mainly fronds and trunks, annually, POIC Sabah said.
Though fronds and trunks are targeted as the main raw materials, it said the facilities were designed to also process empty fruit bunches (EFB - from palm oil mills) and wood wastes from the State's timber industry.
Evolution Energy's entry into Sabah came in the wake of the launch last June of the Biomass Joint-Venture (JV) Cluster concept of aggregating EFB from most of the 130 palm oil mills across Sabah.
The JV cluster approach is the result of a joint initiative by Sabah's Ministry of Industrial Development, Lahad Datu oil palm mills, POIC Sabah and Malaysian Innovation Agency (AIM).
It is being seen as the key that can unlock the potential for generating the targeted RM30 billion additional revenue from biomass as envisaged in Malaysia's National Biomass Strategy 2020, developed by AIM and part of the Malaysia's Economic Transformation Programme.
From its 1.4 million hectares of oil palm plantations, Sabah produces about 26 million tonnes of oil palm biomass comprising fronds, trunks, EFB, palm kernel shells and mesocarp fibres.
Failure in earlier attempts at securing long-term biomass supply had kept investors at bay.
The JV Cluster approach circumvents issues of pricing and supply tenure by bringing in the biomass owners whose capital injections into the proposed downstream JV companies will be in the form of biomass.
Evolution Energy is based in North Carolina, US. According to its official handout, 'it pioneers new and innovative energy technologies that address the growing global demand for green power producing facilities'.
One of its businesses is the manufacturing of Nucoal, a coal substitute made from biomass that does not threaten the environment.