The Nexus between Energy Consumption and Carbon Emission: The Case of Malaysian Palm Oil Industry

Article history:
Received: 3 Oktober 2019
Accepted: 15 May 2020

Available online: 29 September 2020

Page number: 16-21

Author: Umi Zakiah Norazman**; M Yusof Saari*; Muhammad Daaniyall Abd Rahman**; Chakrin Utit** and Anitha Rosland**

The increase in palm oil production for food and products has raised major concerns on greenhouse gas (GHG) emission. Studies have shown that agricultural and plantation acreage are one of the biggest contributors to the total global GHG emission, accounting for 17%. This is alarming for Malaysia’s reputation as the second largest palm oil producer, which currently contributes 39% of world palm oil production and 44% of world exports. While most studies have focused on the GHG emission from palm oil mill effluent (POME) and GHG emission from oil palm peat, little attention is given to GHG emission arising from operation during oil palm planting production activities. Hence, this paper aims to measure the impact of energy use on GHG emission of these two palm oil-related activities. In this study, we develop an extended Input-Output Table by introducing two vectors: (i) sectoral energy consumption in unit of energy (ktoe) and (ii) sectoral carbon emissions that are estimated separately. From a policy perspective, this paper will provide answers to critical and policy-relevant questions such as climate change mitigation action through the reduction of GHG emissions for sustainable palm oil production.

Keywords: energy consumption, carbon emissions, palm oil industry, input-output.

* Institute of Agricultural and Food Policy
Studies, Universiti Putra Malaysia,
Putra Infoport, Jalan Kajang-Puchong,
43400 UPM Serdang, Selangor,

** Department of Economics,
Faculty of Economics and Management,
Universiti Putra Malaysia,
43400 UPM Serdang, Selangor,