Kaneka Malaysia Sdn Bhd and BAC Renewable Energy Sdn Bhd (BACRE) have joined forces to build a biomass steam plant in Gebeng worth MYR 30 million (around $7.13 million). This project will help Malaysia move forward with renewable energy and its plans for a cleaner energy future.
According to a statement on Friday, the plant is located within Kaneka Malaysia’s chemical industrial complex in the Gebeng Industrial Estate.
The biomass steam plant project is led by BAC Renewable Energy (BACRE) through its subsidiary, BACRE Gebeng Sdn Bhd, and is a key step in Malaysia’s renewable energy journey and efforts to reduce industrial carbon emissions.
Under a 20-year steam supply agreement, the plant will provide Kaneka Malaysia with up to 30 tons per hour of green steam, replacing traditional steam made from natural gas. This makes the plant a long-term contributor to Kaneka’s sustainability goals.
Kaneka Malaysia aims to cut its greenhouse gas emissions by 70% by 2030 and achieve net zero emissions by 2050.
The project is a collaboration: Kaneka Malaysia provides the land and receives the steam, while BACRE Gebeng develops, owns, and operates the plant. Knight Frank Project Services handles the full project delivery, and Boilermech Sdn Bhd supplies the boiler technology.
Bank Islam Malaysia Berhad supports the project financially, and Emnes Metal Sdn Bhd helps coordinate between different sectors to ensure sustainability.
This project highlights 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.
The biomass steam plant, built on 3.4 acres, is designed to show how industries can be more sustainable.
When finished, it will provide renewable steam directly to Kaneka Malaysia, replacing fossil fuels and reducing greenhouse gas emissions.
Key features of the plant include:
Fuel flexibility – it can use empty fruit bunches (EFB), palm kernel shells, and woodchips, supporting local biomass supply.
High energy efficiency – advanced systems recover and use heat effectively.
Automated ash handling – makes operations safer and easier.
Strict emission controls – fully meets 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).
The biomass steam plant is expected to start operating by the third quarter of 2026. The project supports Malaysia’s national plans under MyRER and NETR by turning agricultural waste into clean energy, helping to reduce industrial carbon emissions. It will also create local jobs, promote a circular economy, and strengthen Malaysia’s global competitiveness in industries that focus on environmental, social, and governance (ESG) practices.
According to the statement, this initiative complements BACRE’s broader strategy to develop a regional biofuel ecosystem.
Earlier this year, BACRE signed an agreement with TLP Terminal, the operator of Tanjung Langsat Port, to set up the BACRE ASEAN BioLNG Storage and Export Hub in Johor. The project will use palm oil waste to produce clean energy, helping to reduce carbon emissions in the maritime and power sectors 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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