Biogas released from Palm Oil Mill Effluent (POME) is the single largest emission source of SDP’s oil palm milling operations. Biogas plants capture methane emitted from anaerobic wastewater treatment ponds that would otherwise be released into the atmosphere. Methane is a high-impact Greenhouse Gas (GHG) and is created when POME is stored in retention ponds. At our biogas facilities, POME from CPO production undergoes retention for a certain amount of time it before it is discharged into streams. Biogas produced during the degradation of POME is then used to generate power that is fed into the grid, or flared, ensuring that methane is not released into the atmosphere. This helps meet SDP’s goal of reducing the carbon footprint by 40%.

SDP has embarked on a series of partnerships with established biogas players, as part of our asset-light strategy to reduce carbon emissions. At present, we have secured seven Feed-in Tariff renewable energy quotas for our mills. As at the end of 2020, two of these plants were already in operation. We expect more biogas projects to materialise by FY2021.   

As of 2020, nine of our mills have been installed with biogas plants to capture methane, a high-impact GHG that is more potent than carbon dioxide and created when palm oil mill effluent (POME) is stored in retention ponds. This represents 10% of our mills with another nine in the pipeline. At current projections, when 50% of our current mills group-wide have biogas plants, we will be on track to achieve our target of 40% reduction in total operational emissions by 2030.

SDP has adopted 3 business models including one in partnership with TNB Energy Services Sdn Bhd through Sime Darby TNB Renewable Energy (SDPTRE), of which SDP owns 51%. SDPTRE supplies green electricity to the Malaysian power grid through the Sustainable Energy Development Authority Feed-in Tariff (FIT) program. Under SDPTRE, 1 new biogas plant is currently under construction which is Kempas Biogas Plant and 2 biogas plants are already in operation: 
  • Flemington Biogas
  • Hadapan Biogas

Flemington Biogas Plant


The second business model is through a more unique asset-light business model that is business model on a Build-Own-Operate-Transfer (BOOT) basis. Through this asset light business model, SDP will only lease the estate land and sell POME for biogas production to the appointed contractor. The investment and operational cost will be borne by the contractor.  Below is the list of new biogas plants that SDP has undertaken via BOOT; West Biogas Plant, Chersonese Biogas Plant, Sua Betung Biogas Plant, Diamond Jubilee Biogas Plant, Sri Intan Biogas Plant, and Pagoh Biogas Plant. 

Chersonese Biogas Plant

The third business model is the Captive model which electricity generated by the biogas plant will be utilised for our own consumption i.e. by the mill and nearby communities.


Below is the list of the biogas plants that SDP has undertaken via the Captive model: 
  • Merotai Biogas Plant 
  • Pemantang Biogas Plant 
  • Rantau Biogas Plant
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