Japanese petrochemical company Kaneka has started building its first biomass steam plant in Malaysia, in partnership with renewable energy developer BAC Renewable Energy (BACRE), reports Bioenergy Insight.
The ground-breaking ceremony was held on 11 September at Kaneka Malaysia’s site in the Gebeng Industrial Estate. The RM 31 million (€6.9 million) project is expected to begin operations in the third quarter of 2026.
The facility will produce up to 30 tonnes of renewable steam per hour, replacing natural gas and cutting around 30,000 tonnes of CO₂ emissions each year. The project is part of Kaneka Malaysia’s plan to reach net-zero emissions by 2050, with a 70% reduction in greenhouse gases targeted by 2030.
Developed under a 20-year supply agreement, the plant will be owned and operated by BACRE’s subsidiary, BACRE Gebeng, with Kaneka Malaysia as the buyer and land provider. It will run on palm kernel shells, empty fruit bunches, and woodchips, using advanced combustion technology, automated ash handling, and strict emission controls.
In addition to direct CO₂ savings, the use of palm residues is expected to avoid methane emissions equal to 70,000 tonnes of CO₂ over the next decade.
Kaneka Malaysia Managing Director Hiroyuki Nishimoto said the initiative shows the company’s focus on sustainability and innovation. “This is a major step forward, marking Kaneka’s first biomass steam project here in Malaysia,” he said.
BACRE Director Hasnoel Ramly said the facility demonstrates how agricultural waste can be turned into clean energy. “It is not just about meeting Kaneka’s needs, but about helping Malaysia’s industries cut carbon,” he said.
The project’s delivery partners include Knight Frank Project Services (contractor), Boilermech Sdn Bhd (technology), and Bank Islam Malaysia Berhad (finance), with Emnes providing sustainability support.
