A RM31 million biomass steam plant has broken ground at Kaneka Malaysia’s chemical complex in Gebeng Industrial Estate, marking a step forward in Malaysia’s renewable energy roadmap and industrial decarbonisation efforts.
Developed under a 20-year Steam Supply and Purchase Agreement, the facility will supply Kaneka Malaysia with up to 30 tonnes per hour of green steam, replacing conventional natural gas-based generation. The project is expected to help the company reduce carbon emissions by 30,000 tonnes of CO₂ annually, supporting its target of a 70% reduction by 2030 and Net Zero by 2050.
Led by BAC Renewable Energy Sdn Bhd through subsidiary BACRE Gebeng Sdn Bhd, the plant will be developed in partnership with Kaneka Malaysia as the offtaker and landowner. Knight Frank Project Services has been appointed turnkey contractor, while Boilermech Sdn Bhd provides boiler technology and system integration. Bank Islam Malaysia Berhad is financing the initiative, with Emnes Metal Sdn Bhd as a strategic partner.
BACRE director Hasnoel Ramly said the project aimed to set a benchmark for industrial decarbonisation in Malaysia, highlighting its role in converting palm waste into renewable energy. Kaneka Malaysia managing director Hiroyuki Nishimoto added that the initiative marked the company’s first biomass steam facility globally and would cut reliance on fossil fuels while improving operational efficiency.
The 3.4-acre plant will utilise empty fruit bunches, palm kernel shells, and woodchips, with advanced combustion, heat recovery systems, and stringent emission controls to comply with Department of Environment regulations. It is scheduled to begin operations in the third quarter of 2026 and will also reduce methane emissions from untreated palm waste, avoiding a further 70,032 tonnes of CO₂ equivalent over 10 years.
The project supports Malaysia’s Renewable Energy Roadmap and National Energy Transition Roadmap, with aims to strengthen local biomass supply chains, create jobs, and reinforce circular economy principles.
