BUILDING VALUE AT OUR CORE SEC 5 56 Overview The Renewable Energy segment is central to the Group’s wasteto-wealth initiatives, utilising gas, solid, and liquid biomass from palm oil mills to generate biogas fuel for national and rural grid connections, as well as bio-compressed natural gas (Bio-CNG). Our commitment to renewable energy initiatives has positioned us as the only palm plantation company worldwide with 28 biogas power plants. Moreover, we are the first company to develop a commercial-scale palm-based Bio-CNG plant, in collaboration with the Malaysian Palm Oil Board (MPOB). In 2023, the Keratong 9 plant achieved a Commercial Operation Date (COD) and is now operational. With this completion, we will inject approximately 22 to 24 million kWh of electricity into the National Grid through our Feed-in-Tariff(FiT) programme from five FiT plants annually. FGV’s Palm Kernel Shell (PKS) operations have been certified the Green Gold Label Certification, while our sludge palm oil has achieved certifications from the National Italian Scheme and the International Sustainability and Carbon Certification. These accomplishments highlight our commitment to renewable energy initiatives and our ongoing efforts to minimise the environmental impact from our operations. Outlook The business is poised for growth in 2024, driven by demand in industries such as automotive and healthcare sectors. Despite this positive outlook, we remain cognisant of potential headwinds including geopolitical tensions from the ongoing Russia-Ukraine conflict and unrest in the Middle East. In 2024, we aim to increase our sales volume and margin spread, strengthening our market position despite the anticipated challenges. To mitigate risks, we are focusing on operational excellence, cost control, risk management, and market expansion. This strategy is key to strengthening our overall performance and securing a stronger position in the market, ensuring our resilience and sustainable growth. In terms of new initiatives, we are currently undertaking the establishment of a Fine Compost Plant facility in Maokil, Johor, aimed at serving as the primary source of organic raw material for the production of Fortified Organic Fertiliser. The facility is anticipated to commence operations in 2024. As part of our waste-to-wealth efforts, we are actively evaluating proposals for the supply of shredded Empty Fruit Bunches (EFB), targeting diverse applications such as EFB pellets and addressing challenges encountered by power plants dealing with crop volume inconsistencies. Additionally, we are also exploring the increasing demand for Decanter Cake as an alternative for animal feed products. Received Grand Award for Loji Janakuasa Biomass Sahabat during the 41st MSOSH OSH Award 2023 Outlook For 2024, our focus is on harnessing the potential of renewable energy. We will be exploring the establishment of a separate entity focused on the renewable energy business. This move is part of our Renewable Energy Blueprint, currently under development. Our strategy includes directly supplying PKS to end-users, producing high-quality and premium PKS to fulfil buyers’ specifications, and managing stockpiles for Free on Board (FOB) shipments. Currently, our Bio-CNG plant is undergoing major maintenance and is expected to be commissioned by 2024. Once operational, this facility will significantly enhance our renewable energy capabilities. We are actively engaged in collaborations with several partners to explore the development and offtake of biomethane from greenfield mills. This approach is crucial as utilising bioresources for energy is not only sustainable but also instrumental in reducing the Group’s carbon emissions. GROUP BUSINESS REVIEW More information on Renewable Energy and Energy Management can be found in the Sustainability Report 2022/2023. RENEWABLE ENERGY
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