In Malaysia, a industry roundtable convened by The Edge and the Malaysian Palm Oil Council (MPOC), alongside executives from SD Guthrie Bhd, FGV Holdings Bhd, the Malaysia BiomassBiomass is a complex biological organic or non-organic solid product derived from living or recently living organism and available naturally. Various types of wastes such as animal manure, waste paper, sludge and many industrial wastes are also treated as biomass because like natural biomass these More Industries Confederation (MBIC), and the National Association of Smallholders Malaysia (NASH), evaluated strategies to transition palm oil biomass into renewable energy, sustainable aviation fuel, and high-value biocharBiochar is a carbon-rich material created from biomass decomposition in low-oxygen conditions. It has important applications in environmental remediation, soil improvement, agriculture, carbon sequestration, energy storage, and sustainable materials, promoting efficiency and reducing waste in various contexts while addressing climate change challenges. More. While Malaysia generates approximately 94.7 million tonnes of palm biomass annually, stakeholders emphasized that feedstockFeedstock refers to the raw organic material used to produce biochar. This can include a wide range of materials, such as wood chips, agricultural residues, and animal manure. More availability is constrained by internal operational uses, high logistics costs, and the need to preserve soil agronomy.

The primary challenge facing the Malaysian palm oil sector lies in balancing internal mill self-consumption with the commercial extraction of biomass for external bioenergy and carbon removal markets. Large planters currently return empty fruit bunches to the field as nutrient-rich mulch and combust palm kernel shells and mesocarp fibre for internal process heat, leaving limited accessible surplus. Additionally, high logistical expenditures, weak rural grid access, and a lack of domestic credit buyers willing to pay international biochar carbon removal prices (averaging US$120 to US$200 per credit) hinder scalable offsite conversion.

To address these supply and economic barriers, industry leaders proposed targeted operational and technological frameworks. MBIC recommended upgrading existing palm oil mills into localized, grid-connected biomass or biogas plants to minimize transportation costs, while also proposing that data center developers pair cheap grid access with commitments to purchase palm-based biochar credits. NASH advocated for government-supported shared biochar facilities and farm-level cooperatives, enabling smallholders to aggregate post-replanting trunk and harvest frond residues into secondary income streams via carbon offsets and soil amendments.

The proposed integration pathways aim to optimize biomass utilization while safeguarding long-term agricultural yields. Establishing localized processing facilities and structured carbon credit mechanisms allows smallholders and large plantation operators to monetize agricultural residues without depleting soil organic matter. Concurrently, strategic biomass retention ensures fields maintain necessary nutrient cycling, aligning national energy transition targets with plantation agronomy and commercial viability.