Malaysia targets 99.43 million tonnes of palm biomass for higher-value uses

Malaysia seeks value beyond crude palm oil

Malaysia is stepping up efforts to turn residues from its palm oil industry into commercial inputs for energy, agriculture and manufacturing. Plantation and Commodities Minister Datuk Seri Dr. Noraini Ahmad said palm biomass should be treated as a strategic resource supporting a circular bioeconomy rather than merely as an industry by-product, according to Utusan Malaysia.

The potential resource base is substantial. Malaysia had about 5.70 million hectares planted with oil palm and 452 operating palm oil mills in 2025. The country processed more than 102 million tonnes of fresh fruit bunches during the year and produced 20.28 million tonnes of crude palm oil.

Residue stream reaches 99.43 million tonnes

The Malaysian Palm Oil Board estimated that the industry generated 99.43 million tonnes of palm biomass on a dry-weight basis in 2025. The total includes oil palm fronds and trunks, empty fruit bunches, mesocarp fibre, palm kernel shells and palm oil mill effluent. These materials can be processed or recovered for uses beyond the industry's principal output of palm oil.

The National Biomass Action Plan 2023–2030 is intended to provide policy direction for wider biomass use in renewable energy, bio-agriculture and sustainable materials. In higher-value manufacturing, the government sees opportunities to convert palm residues into biochemicals, nanocellulose, biocomposites, engineered palm wood, pulp and paper products.

Commercial scale remains the central challenge

Industry interest is also increasing in oil derived from empty fruit bunches as a feedstock for sustainable aviation fuel and second-generation biofuels. This could create an additional market for mill residues while linking Malaysia's palm sector to demand for lower-carbon transport fuels. However, Utusan Malaysia reported that Noraini identified practical constraints involving biomass collection, transportation, continuity of supply and production costs. Suitable technology will be required to manage these issues and produce consistent material at scale.

Moving from technical potential to commercial production will also require coordination across the value chain and viable financing from financial institutions. For mills, plantations and smallholders, successful projects could create revenue from materials that currently have limited commercial value. The environmental case depends on efficient recovery and processing, while the business case will rest on dependable supply, competitive costs and committed buyers. Noraini said the aim is to translate years of discussion into sustainable commercial activity that benefits smallholders and local communities as well as the wider industry.