BAC Renewable Energy, KANEKA launched biomass steam plant in Gebeng. (Photo: BAC Renewable Energy)
Japan’s petrochemical major Kaneka broke ground on its first biomass steam plant in Malaysia on Sept. 11, in partnership with local renewable developer BAC Renewable Energy (BACRE).
The facility is scheduled to begin operations in the third quarter of 2026 and is expected to cut 30,000 tons of CO₂ equivalent annually, supporting Kaneka (Malaysia) Sdn Bhd’s progress toward its 2050 net-zero target.
Biofuels replace natural gas, delivering low-carbon steam
This RM31 million (about USD 7.36 million) Biomass Steam Plant is located within Kaneka Malaysia’s chemical industrial complex in the Gebeng Industrial Estate. Developed under a 20-year Steam Supply and Purchase Agreement (SSPA), the plant will supply Kaneka Malaysia with up to 30 tonnes per hour (TPH) of green steam, replacing conventional natural gas-based steam generation.
Hiroyuki Nishimoto, MD of Kaneka Malaysia commented “This green steam initiative reflects our commitment to sustainability and innovation. Working with BACRE’s Biomass Steam Plant allows us to significantly reduce our carbon footprint. This is also a breakthrough for Kaneka Corporation, Japan by having its first biomass steam plant here in Kaneka Malaysia”
Kaneka Malaysia has set an ambitious target to reduce its greenhouse gas (GHG) emissions by 70% by 2030, as part of its broader commitment to achieving Net Zero by 2050.
Hasnoel Ramly, Director of BACRE Sdn Bhd, remarked, “This project reflects BACRE’s mission to turn palm waste into a reliable and sustainable energy resource. We are building and operating this facility with a vision to set a benchmark for industrial decarbonisation in Malaysia. It is not only about supplying steam to Kaneka; it is about driving change in how industries source their energy.”
The project is made possible through a strategic collaboration involving Kaneka Malaysia as the offtaker and landowner, and BACRE’s subsidiary BACRE Gebeng Sdn Bhd as the project developer, owner, and operator.
Knight Frank Project Services will be the turnkey contractor responsible for end-to-end project delivery. Boilermech Sdn Bhd is the boiler technology and system integration provider. Bank Islam Malaysia Berhad serves as the project financier. While Emnes contributing as a strategic partner to facilitate cross-sector coordination and sustainability integration.
Biomass steam plant cuts 30,000 tons of emissions annually
The plant is expected to avoid 24,240 tonnes of CO₂ emissions annually, with an additional 70,032 tCO₂ reduction over 10 years from methane avoidance — by preventing the uncontrolled decomposition of EFB, which releases potent greenhouse gases such as methane (CH₄) and nitrous oxide (N₂O).
Key technological features include:
• Fuel flexibility – Utilising empty fruit bunches (EFB), palm kernel shells, and woodchips to strengthen local biomass supply chains
• High thermal efficiency – Advanced combustion and heat recovery systems to maximise energy output
• Automated ash handling – Enhancing workplace safety and operational efficiency
• Stringent emission controls – Ensuring full compliance with Department of Environment (DOE) regulations
The groundbreaking ceremony was attended by representatives from all partners, highlighting the importance of cross-sector collaboration in advancing Malaysia’s Renewable Energy Roadmap (MyRER) and the National Energy Transition Roadmap (NETR).
This initiative complements BACRE’s broader strategy to develop a regional biofuel ecosystem.
Earlier this year, BACRE signed a memorandum of agreement with TLP Terminal, operator of Tanjung Langsat Port, to establish the BACRE ASEAN BioLNG Storage and Exporting Hub in Johor — a project aimed at leveraging palm oil waste to support maritime and power sector decarbonisation across Southeast Asia.
.jpg)
