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Sime Darby Plantation Berhad : On Track to 40% Carbon Emission Reduction by 2030 with Biogas Plants Initiative

Petaling Jaya, 21 October 2021 – Sime Darby Plantation Renewable Energy Sdn Bhd (SDPRE), plans to develop two new biogas power plants with the largest grid-connected Palm Oil Mill Effluent (POME) biogas developer in Malaysia, Cenergi RE Sdn Bhd (Cenergi), a wholly-owned subsidiary of Cenergi SEA Berhad. SDPRE, a subsidiary of Sime Darby Plantation Berhad (SDP), signed a Term Sheet with Cenergi on 9 October 2021 to co-develop the plants in SDP’s Malaysia operations at the Sungai Dingin estate in Kedah and Kok Foh estate in Negeri Sembilan. To date, Cenergi has developed three biogas power plants for SDP’s palm oil mills which are currently operational, while two others are under construction with targeted completion in November 2021 and mid-2022.

SDP’s Group Managing Director, Mohamad Helmy Othman Basha, said: “Sime Darby Plantation has been energetically pursuing renewable energy solutions in order to meet our emission reduction targets. This latest partnership will accelerate our progress and we are well on track to reach our reduction target of 40% by 2030.”

To add further, Cenergi SEA Berhad’s Group Chief Executive Officer, Hairol Azizi Tajudin highlighted that: “To date, Cenergi has exported a total of 280 GWh of renewable energy to the national grid, equivalent to 217,000 homes’ electricity consumption for a year, and avoided carbon emission of over 1.4 million tonnes of CO2 equivalent, which is comparable to carbon emission of 260,000 passenger vehicles on the road for a year. Moving forward, Cenergi plans to realise these two projects that both parties are co-developing and to also collaborate on other renewable energy initiatives, that would contribute towards SDP’s Greenhouse Gas (GHG) reduction target”.

Besides the two new plants, SDP has 11 biogas plants across its operations in Malaysia, Indonesia and Papua New Guinea, and another nine are scheduled to be up and running in 2022. By 2030, SDP aims to have a total of 31 biogas plants. “To date, we have already achieved a relative carbon emission reduction of 18% through biogas initiatives alone. With the current biogas plan we are putting in place, we are expecting to achieve an estimated total of 28% reduction by the end of 2022,” said Mohamad Helmy.

The Biogas plants will capture methane, a high-impact GHG which is a by-product of POME stored in anaerobic wastewater treatment ponds in palm oil operations. Methane released from POME is the single largest emission source in palm oil operations, contributing to 69% of total emissions.

In Malaysia, SDP has five operational biogas power plants connected to the national grid, with a combined capacity of 7.3MWe. SDP has also developed two captive-power biogas power plants in its Merotai and Sandakan Bay estates in Sabah, each with 1MW capacity, generating electricity for its internal use, and to further reduce secondary emissions from diesel consumption.

Apart from biogas, SDP is also pursuing solar, biomass and water recycling solutions through various partnerships as well as investing in nature-based solutions to increase its carbon sink as part of its carbon management strategy. One of its nature-based solutions is the planting of trees on a large scale. Over the last 12 years, SDP has planted over 1.5 million trees and plans to double this number over the next five years.