Oil Palm Industry Economic Journal Vol. 13 (1) March 2013 p. 14-21

Economic Feasibility Study on Establishing an Oil Palm Biogas Plant in Malaysia

Roslan Abas*; Ramli Abdullah and Yahaya Hawari
Received:    Accepted:    Available Online:


The processing of oil palm fresh fruit bunch (FFB) primarily for palm oil results in the production of large amount of wastes, particularly in the form of palm oil mill effluent (POME). Production of POME can be estimated at almost three times the quantity of crude palm oil (CPO) produced. It can pollute the environment through the production of biogas which can be captured through a biogas-capturing system in a biogas plant. After capturing, the biogas can be utilised either for fueling the mill boiler, electricity generation, flaring or as cooking gas. This current study was carried out with the objective of assessing the economics of establishing an oil palm biogas plant based on the four different utilisation methods of the biogas. The results indicate that utilising biogas for the boiler gives higher economic returns compared with the other three options, given certain conditions. This study finally concludes with some issues that have an impact on any interested investor in a biogas project.

About Post Author


* Malaysian Palm Oil Board,
6 Persiaran Institusi,
Bandar Baru Bangi,
43000 Kajang, Selangor, Malaysia.
E-mail: roslan@mpob.gov.my