TIOS Group : Exclusive Interview with Premium Renewable Energy

Can you give me an idea of the times of your different projects?
We target to begin construction of the two bio oil production plants in the next twelve months and we plan to roll-out thirteen plants within the next five years.

What has been the capital raising experience so far for this project?
The banks have shown positive feedbacks for our projects, we don’t see it as a problem in terms of financing the project. We have noticed that there is a strong appetite for this type of project, both from local and international banks. We like to look at what type of value proposition can be brought in from initial investors as we see our investors more as partners than pure financiers or investors with just money.

What is your perspective of the downstream side of the business in terms of the palm oil industry?
Beyond Malaysia, there is interest for the use of bio oil or pyrolysis oil, in Europe for green power generation. There are other interesting opportunities for example the extraction of fine chemicals from bio oil and other examples like that in China where bio oil can be used to make disposable food containers. The most interesting opportunity will come when the upgrade technology for bio oil to green diesel, green gasoline and green jet fuel becomes available in the next few years.

Where do you see the market moving towards more value addition use of the plantation biomass?
We think that there is going to be a creation of a market led supply demand dynamic for oil palm empty fruit bunches which is the key available biomass from the plantation sector. We can also say the same for other plantation biomass. Biomass will be commoditized. Obviously there are competing uses for this biomass from the plantation but ultimately two things will drive it, namely the value or market price of the end product derived from that biomass and the current cost to produce it. For our joint ventures with plantation companies there is significant value-creation for them because not only will they realise value from bio oil sales from the joint venture as equity participants, they can also sell their biomass on a long term basis to the joint venture and realise value on that front

Talking about Malaysia, how important is it to develop that more value-added downstream space?
I think it is a very exciting proposition to focus more on downstream products, for example you must realize for empty fruit bunches, that twenty years ago, for palm oil plantation owners their biggest problem was getting rid of the empty fruit bunches. There was no value then. With advances in technology, now empty fruit bunches can be used to produce a biofuel namely bio oil with has a multitude of uses. Also, there is no food-or-fuel dilemma for bio oil and that makes it highly interesting. This option adds to the portfolio of downstream products that the oil palm business can generate in addition to downstream products from the palm oil itself.

What is your sector outlook for green energy in Malaysia?
I see significant growth potential for the sector in Malaysia albeit I think that green energy will always be supplementary to Malaysia’s energy needs and will not replace the conventional methods for power generation. But it must certainly begin to play a more important and significant part in Malaysia’s energy mix in the future. I think at the moment we are already seeing a renewed global focus on green energy and Malaysia will be no
different.

What is the general perception of your technology and new value-added solutions for biomass?
I think where the anxiety lies if any is in the supply of biomass; whether there would be sufficient biomass feedstock available which is why we are focused on establishing joint ventures with strong and reputable plantation companies who are owners of that biomass. Malaysia as you know is blessed with about 60-70million tonnes of oil palm biomass and about 20 million tonnes of it being empty fruit bunches. We will also offer a very interesting value added opportunity for the biomass that is to upgrade the bio oil produced from it and refine it further into green transportable fuels. I call it the Holy Grail. It is still a work in progress as far as the process at the pilot stage, but once that process has been refined and ready for commercial deployment in the next few years, it will be basically a totally green fuel comparable to fossil based fuels. It will offer a green alternative to fossil based transport fuels using conventional fuel delivery infrastructure like the traditional gasoline pump and in vehicles designed for fossil based fuels without any modifications required. With all this the perception so far has been very good and many people want to see a solution and value proposition like this take off immediately for Malaysia.

 

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