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Overview of the key risks in the pioneering stage of the Malaysian biomass industry

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Abstract

Renewable energy sources have increasingly become important in recent decades not only as ways for improving energy security and mitigating climate change, but they also help contribute to economic growth and job creation. As the second-largest producer of crude palm oil, Malaysia has abundance of biomass residues from palm oil industries and other renewable organic matters which can be converted to bio-energy and bio-chemicals. Recognizing the roles of biomass for sustainability and wealth creation, the government has stepped up efforts to promote the growth of the industry. However, despite institutional arrangements, policy frameworks, funding mechanisms and incentives to support the growth of the biomass industry, the industry has not been able to create value along the industry’s value chain. While there are many attractive reasons to venture into the biomass industry, there are also potential risks. Lack of understanding of risks associated with the biomass industry is often cited as one of the reasons for the industry’s slow growth. An industry evolves through life cycle stages and at each stage presents risk factors. This paper identifies several key risks associated with early stage of the biomass industry in Malaysia. The overview of risks associated with the biomass industry not only will provide a perspective from which an industry’s viability can be evaluated but also will help industry participants to better understand key risks and improve their risk assessment methods as well as plan their risk management and mitigation strategies more effectively.

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Fig. 1

Source: National Biomass Strategy 2020: New wealth creation for Malaysia’s biomass industry (version 2.0, 2013)

Fig. 2

Source: “Biomass Industry Action Plan 2020: Driving SMEs toward Sustainable Future,” Malaysian Industry-Government Group for High-Technology (MIGHT), 2013

Fig. 3

Source: Hill and Jones (2008, p. 57)

Fig. 4

Source: Authors

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Acknowledgements

This paper derives from a research project “Social and Socio-Economic Impacts along the Value Chain of the Malaysian Biomass Industry,” funded under the Long-term Research Grant Scheme (LRGS) (LRGS/2013/UKM–UKM/PT/06), Ministry of Higher Education (MOHE), Malaysia. The financial supports of both MOHE and Universiti Kebangsaan Malaysia are gratefully acknowledged. We would like to thank participants of the 19th Conference on Process Integration, Modelling and Optimization for Energy Saving and Pollution Reduction (PRES2016) for their valuable comments and suggestions.

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Authors and Affiliations

  1. UKM-Graduate School of Business (UKM-GSB), Universiti Kebangsaan Malaysia, 43600, Bangi, Selangor, Malaysia

    Puan Yatim

  2. Centre of Excellence for Green Technology, Faculty of Engineering, University of Nottingham Malaysia Campus, Jalan Broga, 43500, Semenyih, Selangor Darul Ehsan, Malaysia

    Ngan Sue Lin & Hon Loong Lam

  3. School of Social, Development and Environmental Studies, Faculty of Social Sciences and Humanities, Universiti Kebangsaan Malaysia, 43600 UKM, Bangi, Selangor, Malaysia

    Er Ah Choy

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  1. Puan Yatim
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Correspondence to Puan Yatim.

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Yatim, P., Lin, N.S., Lam, H.L. et al. Overview of the key risks in the pioneering stage of the Malaysian biomass industry. Clean Techn Environ Policy 19, 1825–1839 (2017). https://doi.org/10.1007/s10098-017-1369-2

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