Kaneka Malaysia Sdn Bhd and BAC Renewable Energy Sdn Bhd (BACRE) have teamed up to launch MYR 30 million ($7.13 million) biomass steam plant in Gebeng, advancing Malaysia’s renewable energy and energy transition roadmaps.

According to a statement on Friday, the plant is located within Kaneka Kaneka Malaysia chemical industrial complex in the Gebeng Industrial Estate.

The project, led by BACRE through its subsidiary BACRE Gebeng Sdn Bhd, marks a major milestone in Malaysia’s renewable energy journey and industrial decarbonization efforts.

Developed under a 20-year steam supply and purchase agreement (SSPA), the plant will supply Kaneka Malaysia with up to 30 tons per hour (TPH) of green steam, replacing conventional natural gas-based steam generation, positioning the facility as a long-term contributor to Kaneka’s sustainability goals.

Kaneka Malaysia has set an ambitious target to reduce its greenhouse gas (GHG) emissions by 70 percent by 2030, as part of its broader commitment to achieving net zero by 2050.

The project is made possible through a strategic collaboration involving Kaneka Malaysia as the offtaker and landowner, and led by BACRE Gebeng as the project developer, owner, and operator.

Knight Frank Project Services Sdn Bhd (under Knight Frank Malaysia) serves as the turnkey contractor responsible for end-to-end project delivery, while Boilermech Sdn Bhd provides the boiler technology and system integration.

The initiative is financially supported by Bank Islam Malaysia Berhad, with Emnes Metal Sdn Bhd contributing as a strategic partner to facilitate cross-sector coordination and sustainability integration.

The launch is highlighting the importance of cross-sector collaboration in advancing Malaysia’s Renewable Energy Roadmap (MyRER) and the National Energy Transition Roadmap (NETR).

“At Knight Frank Malaysia, we are committed to supporting projects that drive sustainable development and responsible industrial growth,

“This biomass steam plant exemplifies how innovative project management and strategic partnerships can deliver tangible environmental benefits while supporting Malaysia’s renewable energy goals,” said Teh Young Khean, Senior Executive Director of Knight Frank Malaysia.

Hiroyuki Nishimoto, Managing Director of Kaneka Malaysia commented that this green steam initiative reflects their commitment to sustainability and innovation.

“Working with BACRE and its consortium of partners allows us to significantly reduce our carbon footprint by about 30,000 tCO2e per year while enhancing operational efficiency,

“This is also a breakthrough for Kaneka Corporation, Japan by having its first biomass steam plant here in Kaneka Malaysia,” he added.

Situated on 3.4 acres, the biomass steam plant is designed as a showcase of industrial sustainability.

Once completed, it will deliver renewable steam directly to Kaneka Malaysia’s operations, displacing fossil fuels and reducing greenhouse gas emissions.

Its key technological features include fuel flexibility (utilizing 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 maximize energy output); automated ash handling (enhancing workplace safety and operational efficiency); stringent emission controls (ensuring full compliance with Department of Environment [DOE] regulations).

“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 decarbonization in Malaysia,

“It is not only about supplying steam to Kaneka; it is about driving change in how industries source their energy,” said Hasnoel Ramly, Director of BACRE Sdn Bhd.

The plant is expected to avoid 24,240 tonnes of carbon dioxide (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).

Scheduled to be operational by the third quarter of 2026, the biomass steam plant directly supports the national agenda of MyRER and NETR by converting agricultural waste into clean energy, reducing industrial carbon emissions, creating local employment opportunities, reinforcing circular economy principles, enhancing Malaysia’s global competitiveness in environmental, social, and governance (ESG)-led industries.

According to the statement, 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 decarbonization across Southeast Asia.

Together, these efforts demonstrate BACRE’s commitment to unlocking new opportunities in renewable energy and building a resilient, low-carbon future for Malaysia and the region, said the statement.

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