Feasibility Study on Efficient Methane Recovery and Heat Generation in Palm Oil Mill in Malaysia

Global Environment Centre Foundation(GEC)

Reports of CDM/JI Feasibility Studies


Title of the researchFeasibility Study on Efficient Methane Recovery and Heat Generation in Palm Oil Mill in Malaysia
FYFY 2005
Main research orgnisationSanwa Engineering Co. Ltd
Research partner(s)Bell Palm Industries Sdn Bhd
Location of the projectMalaysia (Johor)
Summary of the research report (PDF) Summary
Description of the projectThe study targeted Bell Palm Industry owned by the Bell Group Company in Johor, Malaysia is a crude palm oil mill plant with capacity of 40t-FFB/h. The BPI obtains energy from steam boilers and backpressure steam generator utilized fiber and shell disposed of CPO production process. Meanwhile, palm oil mill effluent (POME) discharged from the CPO production process currently undergoes anaerobic and aerobic lagoon treatment to comply with the effluent standard in Malaysia, however, this treatment releases a large quantity of methane gas into the atmosphere, which has 21 times of effects compared with CO2 as GHGs.
This project aims to collect methane gas generated in the POME treatment process, and to utilize it as a boiler fuel. The fuel of the surplus (part of the shell), which was substituted with recovered methane, is planned to sell to a Cement Company located nearby the BPI.
Sector of the projectBiomass Utilisation
Duration of the project activity/ crediting periodDuration of the project activity will start in 2007./ 2008 - 2028
Baseline methodology/additionalityThe methodology applied to the project is AM0013/Version 02 “Forced methane extraction from organic waste-water treatment plants for grid­connected electricity supply and/or heat production”(May 13th,2005). It is justified to apply the methodology AM0013/version 02 in utilizing the recovered methane for the heat production (the boiler fuel). This methodology is based on the baseline approach by the paragraph 48 in the Form and the Procedure of CDM, “Existing actual or historical emissions as applicable”.
BPI uses shell and fiber from palm oil mill waste as a fuel for the steam boilers, and supplies steam and electricity required by the mill process, so BPI does not use the fossil fuel and grid electricity.
Almost all mills in Malaysia is utilizing the waste shell and fiber for the boilers fuel, so we hope this CDM FS will be a model case for palm oil mill in Malaysia and nearby countries.
Estimation of GHG emissionsThe emission reduction of GHGs (ER) is due to the formulae as follows:
ER [t CO2eq/yr] =
Baseline emissions [t CO2eq/yr] - Project emissions [t CO2eq/yr]
Expected annual emission reductions amount 24,172 t CO2-eq/yr.
Expected baseline emissions and project emissions are as follows;
Expected baseline emissions 30,219 t CO2-eq/yr
Expected project emissions 6,047 t CO2-eq/yr
Monitoring methodologyThe monitoring methodology applied to the project is AM0013/Version 02 “Forced methane extraction from organic waste-water treatment plants for grid-­connected electricity supply and/or heat production”(May 13th,2005).
Environmental impactAccording to the Malaysian environmental laws and regulations, specifically the Environmental Quality Act 1974 and the Environmental Quality (Prescribed Activities) (Environmental Impact Assessment), no environment impact assessment is required for the proposed project activity.
The project must comply with the environmental laws and regulations and the project proponent must obtain the necessary approvals before project implementation.
The project involves an upgrading of the existing POME treatment system at the palm oil mill. Significant environmental improvements and benefits can be realized through the implementation of the proposed project activity involving the installation of an advanced anaerobic digester system based on the CSTR technology for methane recovery, in place of the existing open lagoon system for POME treatment.
Issues and tasks for project implementationOutline of the project implementation plan and the profitability are as follows;
Four closed tank digesters capacity of 3,000m3 are installed and steam boilers are improved to utilize the recovered methane for fuel.
The investment of the project is estimated over $920,000 (3,200,000
IRR and the investment recovery years are shown in the table below;

CER price
Credit period 7 years
- 0.1%
Investment recovery years
The cost does not be satisfied to commercialize the project, so the effort to reduce the cost from now on.
This FS is excepting the validation, so there should be required more effort to complete the PDD and validation.
Sanwa Engineering Co. and The Bell group Company are not adequate in scale for receives the public or national fund such as JBIC and World Bank.