Kaneka breaks ground on first biomass steam plant in Malaysia

Japanese petrochemical group Kaneka has started construction of its first biomass steam facility in Malaysia, in partnership with renewable energy developer BAC Renewable Energy (BACRE).
The ground-breaking took place yesterday (11 September) at Kaneka Malaysia’s site in the Gebeng Industrial Estate.
The RM 31 million (€6.9m) plant is due to begin operations in the third quarter of 2026.
It will generate up to 30 tonnes per hour of renewable steam, replacing natural gas and cutting around 30,000 tonnes of CO₂ equivalent annually.
The project supports Kaneka Malaysia’s net-zero target for 2050, including a 70% cut in greenhouse gas emissions by 2030.
Developed under a 20-year Steam Supply and Purchase Agreement, the facility will be owned and operated by BACRE’s subsidiary, BACRE Gebeng, with Kaneka Malaysia as offtaker and landowner.
The plant will use empty fruit bunches, palm kernel shells and woodchips, with advanced combustion systems, automated ash handling and strict emissions controls to meet regulatory standards.
Beyond direct CO₂ savings, methane avoidance from untreated palm residues is expected to deliver an additional 70,000 tonnes of reductions over ten years.
Hiroyuki Nishimoto, Managing Director of Kaneka Malaysia, said: “This green steam initiative reflects our commitment to sustainability and innovation. It is a breakthrough for Kaneka Corporation in having its first biomass steam plant here in Malaysia.”
BACRE Director Hasnoel Ramly added: “This project turns palm waste into reliable energy. It is not just about supplying steam to Kaneka, but about driving industrial decarbonisation in Malaysia.”
Delivery partners include Knight Frank Project Services (contractor), Boilermech Sdn Bhd (technology), and Bank Islam Malaysia Berhad (finance), with Emnes supporting sustainability integration.