The Terengganu State Palm Oil Mill Biogas Upgrading Project has taken centre stage in Malaysia’s renewable energy (RE) ambitions after the latter formalised cooperation with South Korea through a letter of intent to develop Bio-Compressed Natural Gas (Bio-CNG) from palm oil waste.
The initiative brings together South Korean RE firms Polaris Bio Co Ltd and Sudokwon Landfill Site Management Corporation, alongside Malaysian technology partner MTC Orec Sdn Bhd, under the facilitation of the Malaysian Bioeconomy Development Corporation.
The project will upgrade biogas derived from palm oil mill effluent into Bio-CNG for industrial, transport and power applications.
Planned in Terengganu, the facility is expected to be among the earliest implementations under a broader RM700 million pipeline targeting more than 20 biogas upgrading plants nationwide. It also builds on earlier feasibility work between Bioeconomy Corporation and Polaris Bio, signalling a shift from planning to execution in Malaysia’s palm oil waste-to-energy strategy.
The project is projected to cut up to 384,000 tonnes of CO2 equivalent emissions annually under full-scale deployment, reinforcing Malaysia’s energy transition goals while strengthening energy security through reduced reliance on fossil fuels.
Commercial rollout of the Terengganu facility is targeted for 2029, with preliminary development expected to begin in 2027. Industry stakeholders said the project is expected to serve as a reference model for future Bio-CNG developments across Malaysia’s palm oil sector.
Beyond its energy impact, the initiative is expected to deepen bilateral technology transfer between Malaysia and South Korea and support the development of a more integrated regional bioeconomy ecosystem. It has also received formal recognition under Article 6.2 of the Paris Agreement, marking a first for a Malaysia-Korea carbon reduction collaboration.
Bioeconomy Corporation said the project underscores Malaysia’s growing attractiveness as a bioeconomy investment destination, while demonstrating the commercial viability of converting agricultural waste into scalable RE solutions.
