73 SUSTAINABILITY REPORT 2018/2019 04 S E C T I O N Bio-compressed natural gas (bio-CNG) Bio-CNG is a viable and sustainable alternative to fossil-derived natural gas that has potential, in both the local and export markets, as a substitute for diesel in vehicles and in the manufacturing industry. Not only does this contribute to our efforts to reduce emissions from the production of palm oil, but it also supports the Malaysian government’s focus on expanding its renewable energy portfolio. Since 2017, our world’s-first commercial-scale palm-based bio-CNG plant in Selangor has been producing bio-CNG for customers based in Serendah and Tanjung Malim. A collaboration between FGV Palm Industries Sdn. Bhd. (FGVPI), the Malaysia Palm Oil Board (MPOB) and Sime Darby, the plant produced 31,000 MMBTU of bio-CNG in 2018 and 16,800 MMBTU in 2019. To develop this initiative further, FGV Palm Industries Sdn. Bhd. (FGVPI), Sime Darby Energy Solutions Sdn. Bhd. (SDES) and Biotek Dinamik Sdn. Bhd. (BDSB) signed an MOU in July 2019 to potentially develop 35 brownfield and greenfield sites owned by FGVPI. Once the project is fully rolled out, FGV will have the most bio-CNG sites in the world for a plantation company. Under the collaboration, all three companies will leverage each other’s areas of expertise: FGVPI will provide the mill sites, biogas and/or POME supplies, and assist in project coordination. SDES will provide design and construction services for the proposed project as well as ongoing maintenance support. BDSB will be the project developer, owner and operator of the bio-CNG and/or biogas plants. The project will be undertaken on a build, operate and own basis. ENVIRONMENTAL STEWARDSHIP Emissions Reduction through Renewable Energy Biogas is the main source of our emissions from palm oil milling process and we continue to focus our efforts on capturing biogas to mitigate and reduce our overall GHG emissions. We also look for new ways to generate renewable energy to replace our traditional sources of energy. As such, FGV has heavily invested in a number of initiatives to move towards a future where renewable energy becomes the main source of power generation. We currently have 30 biogas plants and two biomass plants in operation, with another seven facilities planned for the near future. Biogas (Methane) Capture in Palm Oil Mills FGV currently generates biogas from 30 mill sites, as a by-product of the anaerobic digestion of palm oil mill effluent (POME). We continue to build new biogas capture plants at our mills and now have the most biogas plants in the world for a single plantation company. With 30 biogas capture plants in operation, the amount of emissions that our mills discharge into the environment has reduced significantly. Almost all biogas (mostly methane) is now captured during the milling process or converted to carbon dioxide during flaring, which significantly reduces its global warming potential. We also installed anaerobic digesters in all our biogas plants to further improve effluent quality and reduce GHG emissions by treating the POME and reducing its chemical oxygen demand by 85-95%. Biogas plant function Number of plants Flaring gas 16 Supplying electricity to grid 11 Supplying electricity to rural communities 3 Producing bio-CNG 1 A key benefit of our biogas plants has been the ability to generate and supply electricity to the local communities in Umas, Baiduri Ayu and APL. This has directly helped to improve their livelihoods and further contributed to a reduction in GHG emissions as residents previously depended on diesel-generated power. The table below shows the reduction of CO2 emissions in FGV’s plants: Year No. of biogas plants monitored Energy generated (MWh) Reduction of CO2 emissions (MT) 2017 18 9,763 116,750 2018 15 18,059 97,620 2019 12 10,757 79,415 * Emission reductions only include our biogas and bio-CNG plants. Biomass for Electricity Our biomass power plants in Lahad Datu, Sabah and Jengka, Pahang continue to generate electricity using 100% treated empty fruit bunches (EFB). Both these plants supply electricity to the national grid as well as regional townships and industries.
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