green - Roundtable on Sustainable Palm Oil

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Contents
PURCHASING
ASIA
From the 5
managing editor’s desk
Buy into a <strong>green</strong> future 6
OPPORTUNITIES 8
China firm on rail 8
expansion despite
funding hiccup
Rail on the road to a 9
more prominent future
“Global
demand for
transport
appears
unlikely to
decrease in
the foreseeable
future.”
Sim Boon Kiat,
president, ABB
Malaysia
Smart grids seen as 11
super engines for
China’s growth
Lobby for smart grid 12
roadmap in Malaysia
“Malaysia
should adopt
smart grid
as part of its
sustainable
development
agenda.”
Halim Osman,
secretary, CIRED
Malaysia
The palm oil
business V2.0
(See pages 14–27)
Tribes of the roundtable 16
“We pride
ourselves in
asking the
hard questions,
which
will lead us
to finding
the hard
solutions.”
Darrel Webber,
secretarygeneral
RSPO
The tough route to 20
<strong>green</strong> palm oil
Cargill: Helping brands 25
<strong>green</strong> supply chains
“Sustainability
is
a critical
factor to
many of the
brands we
supply.”
Bruce Blakeman,
vice-president
for corporate
affairs, Cargill
Asia Pacific
Fibrous kenaf could 28
be Malaysia’s third
big crop
Fronds of a dilemma 22
ASEAN’s biggest eco trade 32
show kicks off
•

The windmills of Bangui
(See page 34)
EDITORIAL 46
The many faces of 46
biodegradability
More push for Taiwan’s 47
<strong>green</strong> building material
industry
Algae for biofuels: 48
A promise in waiting
Building with two gauges 49
Easy money-saving tips 50
for business
CASE STUDIES 33
India to build world’s 33
largest solar power plant
Energy from bumpy rides 33
The windmills of Bangui 34
Vast opportunities for 35
wind in the Philippines,
including typhoon power
First dual-certified 36
dedicated office tower
in KL
PEOPLE 40
Expanding 40
ecomaginatively in
South-east Asia
“We want to
make money
but we want
to be <strong>green</strong> as
well, and not
at a cost to the
business.”
Azli Mohamed, GE
Malaysia’s market
development
director
Singapore’s <strong>green</strong> 42
innovator of the year
“I envision a
future where
nothing will
go to waste.”
Ho Nyok Yong,
technical director,
Samwoh
Corporation
Managing agro-wastes 44
with micro-organisms
“Innovation
involves activities
that facilitate the
flow of business.”
Suhaimi Masduki,
CEO, BioFusion
Sdn Bhd
INFORMATION 51
New global language 51
of <strong>green</strong>
Nuclear-renewable 52
debate heats up in India
Australia carbon tax 54
unlikely to drive up
renewables
China halves EV 55
production, faces major
challenges
ASEAN goes for regional 56
certification
Malaysia’s feed-in tariff 57
scheme delayed to
December
All hail the big <strong>green</strong> 58
spender
News briefs 60
Homework 64
•

The team
Editorial
Editor: Lim Siang Jin
Managing editor: David Lee Boon Siew
Assistant editor: Siaw Mei Li
Contributing editors: Ann Teoh, Jason Tan
Contributing writers: Eleanor Chen, G Danapal,
Mallika Naguran, Stephen Ng, Ngam Su May,
Nidhi Bhardwaj, Suvarna Beesetti, Tan Su-Yin,
VK Shashikumar, Tejas Patel
Columnists: Goh Ban Lee, Shel Horowitz, Khoo
Hock Aun, Ning Yu, Prasad Modak
Marketing & sales
Manager: Yong Wang Ching +6012 205 7928
Sam Thong (Malaysia) +6012 361 0617
Lim Wan Tsau (Singapore) +65 9068 0184
Creative & design
Khoo Kay Hong, Faye Phua Szeu Hwui
Production & advertising traffic
Eddy Yap
Subscription & circulation
Yap Eng Jin
Finance & operations
Kym Chong
Corporate
Managing director: Lim Siang Jin
Publisher
Briomedia Green Sdn Bhd (924679-H)
3-3 Jalan Solaris 2, Solaris Mont Kiara
50480 Kuala Lumpur, Malaysia
Tel: +603 6203 7681 (Malaysia)
Tel: +65 9068 0184 (Singapore)
Fax: +603 6211 2681
Email: editor@<strong>green</strong>purchasingasia.com
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Tel: +603 5541 3695 Fax: +603 5541 3712
© 2011: Briomedia Green Sdn Bhd
Letters and articles are welcome, and
should be addressed to:
The Editor at Green Purchasing Asia
3-3 Jalan Solaris 2, Solaris Mont Kiara
50480 Kuala Lumpur, Malaysia
Email: letters@<strong>green</strong>purchasingasia.com
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From the managing editor’s desk
Of all the commercially-planted oil
crops, palm oil is king. It’s versatile,
cost competitive and enjoys high
yields. Indonesia and Malaysia lead as
the biggest producers of the oil in the
world. Unfortunately, they are also the
target of some of the most aggressive
lobbies against a commercial crop,
based on a range of issues that include
health, land use, orangutans and native
rights.
The answer, it would seem,
lies in producing <strong>green</strong> palm oil,
a trendy word for a sustainablyproduced
product that is acceptable
to the detractors, with all interest
groups being represented to present
arguments based on facts, not
emotions. This was the premise on
which the 656-member <strong>Roundtable</strong>
on Sustainable Palm Oil (RSPO) was
formed in 2004.
Has it done the trick? Is the RSPO
the answer to all the problems? Not
really, as critics are still vociferous.
And the RSPO-certified palm oil is not
enjoying the level of consumer uptake
anticipated by producing nations.
Worse, growers are unhappy with the
price premium despite being burdened
with CSPO-inflated costs. And to top
it all, Indonesia has set up its own
certification body, with Malaysia now
putting in motion plans to do the same.
This issue of Green Purchasing
Asia engages the RSPO and talks to
four of its stakeholders, including
an NGO, on their concerns and their
commitment to the grouping that
is now preparing for its 9th Annual
<strong>Roundtable</strong> Meeting on Sustainable
Palm Oil taking place November
22nd–24th in Kota Kinabalu in Sabah,
Malaysia. The 8th General Assembly
will be held simultaneously. The
deliberations will be, to put it mildly,
interesting.
David Lee Boon Siew
boonsiew@
<strong>green</strong>purchasingasia.com
The September issue admittedly
looks “agricultural”, as we have also
featured kenaf, a hardy crop cultivated
for its fibre and woody core that has
many industrial applications, including
for making jeans in China! There’s
huge potential in this crop, and the
challenge is to scale it up to bring
costs down.
A lot is happening this month in
the <strong>green</strong> conference market. There
are at least four in Kuala Lumpur and
three in Singapore. The largest will
be the second edition of IGEM 2011,
billed as the region’s biggest <strong>green</strong>tech
show. Green Purchasing Asia is a media
partner for this event. Look out for our
coverage of this event next issue.
Coincidentally, GE, the company
we engaged for our interview in the
People section, is taking part in IGEM.
We spoke to Azli Mohamed, its market
development director for Malaysia, on
the company’s ecomagination business
and discovered that the man’s also a
multi-instrumentalist who’s played at a
jazz festival!
We also interviewed Singapore
Building & Construction Authority
(BCA)’s Green Innovator of the Year
Dr Ho Nyok Yong of Samwoh
Corporation who pioneered the use of
recycled concrete aggregate (RCA) in
new buildings.
For Case Studies, we bring you
the Windmills of Bangui in the Philippines
(along with the opportunities in a
land where typhoons are a part of life)
and the iconic Menara Binjai project in
Kuala Lumpur that is going for <strong>green</strong>
certification.
Happy reading!
Coming up next: Seven billion and counting
The world’s population hits 7 billion in October, a growth rate exceeded only by
the speed of urbanisation, especially in Asia. We discuss the impact of a dense
planet, and the opportunities in the building of sustainable cities.
•

PURCHASING
ASIA
Buy into a <strong>green</strong> future
Green Purchasing Asia’s main purpose
is to provide a well-structured
avenue of immediately-useful
information to buyers and sellers
of <strong>green</strong> products and services in
major sectors, especially in Asia,
and to buttress the development
of a business community around it.
The magazine will cover the
following sectors, which have seen
the greatest technological innovations
and increasing economies
of scale:
• Renewable energy, including
solar energy, wind power, geothermal
and mobile applications
• Biofuels from food and non-food
sources, including palm oil,
sugarcane corn and jatropha
• Biomass from various organic,
inorganic and mixed sources
like oil palm, wood, sugar cane,
corn and household waste
• Green buildings and eco-cities
covering, among others, <strong>green</strong>
building certification programmes,
environmentally sound
building design and materials,
retrofits, and resource-saving
technology
• Transportation, including plugin
electric vehicles (EV), hybrid
electric vehicles (HEV) and automobile
alternatives like rail
• Smart grids, which turn consumers
into producers of energy,
smart meters to track consumption
and manage electrical flow
and new interconnect standards
• Water and waste management,
focusing on desalination technology,
reverse osmosis and
wastewater and solid waste
management
• Energy efficiency, whereby
technologies, processes, materials
and design work together
to maximise quality of life and
industry output at minimal
energy cost
• Green finance, viz, venture
capital and bank loans, grant programmes
(NGOs and government)
and government incentives.
To help readers navigate the magazine
easily, we have divided it into
five broad areas, each assigned a
weightage to ensure consistent and
adequate editorial space allocation.
• Opportunities: These include
project announcements, tenders
and new eco products and
services. This will be a section
heavy on actionable information.
Weightage: 30%
• Case studies: We focus on
projects that use <strong>green</strong> technolo-
gy, like eco-cities, solar farms and
waste recovery projects in large
plantations. In these articles,
we will list out the names
and contacts of developers, suppliers
and contractors involved
in those projects for networking.
Weightage: 30%
• People: This section focuses on
interviews with thought leaders
and captains of industry in <strong>green</strong>
businesses. We will also cover
small and medium enterprises
involved in trailblazing projects.
Weightage: 15%
• Editorials: Opinion pieces,
columns and feature stories
on climate change, sustainable
development and other relevant
subject matters are the meat
of this section. It is designed to
provoke debate, so that by talking
about issues, we think of new
ways and approaches to solving
problems. Weightage: 15%
• Information: This includes news
digest, events calendar, letters,
reviews of books and reports on
climate change, <strong>green</strong> technology
or related topics, market entry
conditions and new country regulations,
policies and incentives.
Weightage: 10%
Target readership
The government’s role is not only
to set the policy environment to
drive the <strong>green</strong> agenda. It is also a
massive market player in the economy,
accounting for up to 30% of
purchases. Any decision by governments
to procure <strong>green</strong> will have a
major influence on the market.
It is this dual role that makes
governments important customers,
which is why we are targeting 40%
of our print and online circulation
at senior government servants.
The remaining 60% will be aimed
at the business community, international
agencies and non-government
organisations.
•

•

opportunities
China firm on rail expansion
despite funding hiccup
Long-term benefits outweigh short-term setbacks including 3.8 billion yuan loss in Q1
To cut losses and boost occupancy on high-speed trains, regular train services stopped
To cut costs, China will start running its high speed trains at lower speeds. Maximum speeds will drop to
300 km/h for the sake of safety and energy efficiency
China’s Ministry of Railways has
confirmed that its total investment
this year will reach 745 billion yuan
(US$115 billion), with 600 billion yuan
going towards infrastructure construction,
according to ministry spokesperson
Wang Yongping. The official
statement follows media reports saying
the ministry could scale back investments
by more than 200 billion yuan
this year as the rapid expansion of the
country’s high-speed railways had led
to debt concerns.
The ministry however says what
was actually cut was investment in
infrastructure construction, knocked
down by 100 billion yuan from the
700 billion yuan announced at the
beginning of this year. Wang says
the changes made sense as it reflects
the continued commitment to railway
construction, and meets the capital demands
of projects under construction.
He says that during the country’s 12th
Five-Year Plan Period spanning 2011
to 2015, the ministry will proceed with
railway construction as it is needed to
support the country’s economic and
social development and to meet public
demand, adding that investments during
the period will hit 2.8 trillion yuan
(US$435 billion), an increase of 41.5%
from the previous five-year period
(2006-2010).
China rail updates
• On July 23rd, 40 people were
killed and about 200 injured when
two high-speed trains collided in
Wenzhou, Zhejiang in eastern China;
the first train had stalled on the
tracks following a lightning strike
when another rear-ended it, sending
two of its carriages off a bridge
• Signalling failure was identified as
the cause of the accident
• On August 11th, China CNR Corp, the
nation’s second-biggest trainmaker,
recalled 54 high-speed trains
operating between Beijing and
Shanghai over safety concerns
• Rail stocks in China have taken a
huge dip; as of August 21st, China
CNR was down by 29% in Shanghai
trading since the crash
Sources: Bloomberg, BBC
Nevertheless, investment financing
remains an issue, as the railways
ministry disclosed earlier that it suffered
a 3.8 billion yuan loss in the first
quarter, which, according to analysts,
was caused by surging operational
costs. China’s tightened controls on
bank lending are expected to further
squeeze the ministry’s cash position.
At the end of March, the ministry had
piled on 1.98 trillion yuan of debt,
while total assets amounted to 3.4 trillion
yuan. Additionally, the funding of
railways construction is evenly shared
between the central government and
governments at the local level, meaning
that aside from the ministry’s
roughly 2 trillion yuan debt, local
government account for an additional
2 trillion yuan of debt, adding up to
4 trillion yuan for China’s railways,
equivalent to one tenth of the country’s
gross domestic product (GDP).
To cut losses and raise occupancy
rates on the high-speed trains, the ministry
has halted the operation of a number
of regular-speed trains, leading to
complaints from the general public,
as they are forced to pay more for the
faster trains. Many analysts believe the
infrastructure expansion in China was
too aggressive and that tickets are too
expensive for most people, potentially
leading to under-utilisation of the
service. As a result, it remains unclear
whether the ministry can generate
enough revenue to service and repay
its debt.
Although there has yet been
cutbacks in investment, concerns over
debt levels and train safety within the
ministry have driven some of the more
recent developments. Former railway
minister, Liu Zhijun, removed in
February on allegations of corruption,
was known for spearheading fast-track
development in railways infrastructure
projects.
Liu’s successor, Sheng Guangzu,
took over the ministry in February,
suggesting a cut in ticket prices and
addressing concerns about the cost of
running trains at high speeds. He says
high-speed trains will begin operating
at lower speeds. Maximum speeds
on many of the country’s high-speed
railways will drop to 300 km/h from
the current 350 in a move to maximise
operational safety and energy efficiency.
Some luxury cars on the trains will
be re-fitted with more densely packed
seating arrangements, allowing for the
introduction of economy class ticketing
at a lower price point.
China intends to stick to the plan
of steadily expanding its high-speed
rail network despite the setbacks, as
the long-term economic benefits of the
expansion far outweigh the current,
yet short-term, losses, according to
the Ministry of Railways. One of the
•

world’s longest single stretches of
high-speed railway, linking Beijing and
Shanghai, China’s two largest cities,
went into official operation recently.
One-way tickets for the 1,318-km trip
range from 410 to 1,750 yuan (US$63
to US$271), with most of the seats on
the 300 km/h trains costing 555 yuan,
half the price of an economy-class
plane ticket. Fierce competition on
timetable, price and service quality is
in the offing between the high-speed
trains and the airlines.
China’s high-speed rail network
had reached 8,358 km in length as at
the end of 2010 and is expected to
exceed 13,000 km by 2012 and 16,000
km by 2020. Meanwhile, the railway
across the country overall will grow to
120,000 km. Over the next five years,
30,000 km of new railway lines will
come into operation, 87.5% more than
for the 2006–2010 period. – Nanjing
Shanglong Communications
Rail on the road to a
more prominent future
Peninsular Malaysia’s 960-km double-tracking railway line by 2016
Tender for final stretch, the 197-km Gemas–Johor Baru line, before end 2011
By Stephen Ng
Despite huge investments in road
infrastructure in its long-term
development plans, Malaysia continues
to grapple with the problem of
traffic congestion. The Automobile
Association of Malaysia reported that
from 2000 to 2010, the number of
private and commercial vehicles nearly
doubled from 343,173 to 605,156 (see
chart next page).
This fact is not lost on the
planners. Selvarajoo Manikam, deputy
director of the Infrastructure and
Utilities Section in the Economic
Planning Unit of the Malaysian Prime
Minister’s Department, acknowledges
that huge allocations to construct roads
and highways had failed to solve the
worsening traffic congestion in major
cities. “Under the Tenth Malaysia Plan,
more allocation has been given for rail
construction than road construction,”
he says, indicating that the government
is giving more attention to rail
networks.
President and country manager of
ABB Malaysia Sdn Bhd Sim Boon Kiat
says the International Energy Agency
(IEA) “Report on CO ² Emissions from
Fuel Combustion 2010” indicated that
the transport sector represented 22%
of global CO ² emissions in 2008.
“This is mainly attributed to road
vehicles. Global demand for transport
appears unlikely to decrease in the
foreseeable future with the World
Energy Outlook 2009 projecting that
the sector will grow by 45% by 2030,”
he says. “Against this scenario, the
impact on future generations could be
catastrophic unless firm actions are
taken today to invest in new mobility
strategies and policies.”
Double-tracking hopes
Malaysia’s Minister of Transport
Datuk Seri Kong Cho Ha says the rail
sector will emerge as a catalyst in the
country’s public transportation system.
He places his hopes on the 960-km
double-tracking railway line traversing
the whole length of the Malaysian
peninsula that will be completed by
2016.
“The tender for the final stretch
of the 197-km Gemas–Johor Baru line
will be done before year end, and
completed by 2016,” he says.
By then, Keretapi Tanah
Melayu Berhad (KTMB) president
Dr Aminuddin Adnan says, the entire
railway line will run on electricity.
These trains will go up to 160 km/h,
and will cut travel time and carbon
emissions.
In the cargo division, KTMB
has issued tenders for another 40
locomotives in line with its <strong>green</strong>
campaign to buy electric trains. It is
“The rail sector will
emerge as a catalyst
in the country’s public
transportation system.”
Transport minister Datuk Seri Kong Cho Ha
“The entire railway line
will run on electricity,
cutting travelling time
and carbon emissions.”
KTMB president Dr Aminuddin Adnan
“Global demand for
transport appears unlikely
to decrease in the
foreseeable future.”
ABB’s Sim Boon Kiat
•

also looking at buying another six train
sets to cater to the increase in inter-city
passengers. For the increasing number
of intra-city commuters, the company
will be commissioning its six-car trains
in early 2012 to carry up to 200,000
commuters a day.
To encourage use of rail transport
for daily commutes in the Klang Valley,
Kong says more multi-storey parking
complexes will be built, adding 7,000
more parking lots to promote the parkn-ride
concept.
As for the Light Rail Transit
service in the Klang Valley, both the
Kelana Jaya Line and Ampang Line,
which have reached their capacity
of 440,000 commuters daily, will be
lengthened by another 34 km, with
30 extra stations. According to Norlia
Noah, general manager of Infrastructure
Development, Prasarana Berhad,
the government-linked company which
manages the LRT, the extension project
costing RM674 million (US$225 million)
is part of efforts to improve public
transportation efficiency in Greater
Kuala Lumpur.
The new Mass Rapid Transit line
running from Sungai Buloh to Kajang
will serve 1.2 million people. Once
completed, it will cover a distance of 51
km (of which 9.5 km is underground)
and substantially reduce travelling time
into the city. Travelling from Sungai
Buloh to Kajang, cutting through the
Kuala Lumpur city centre, will take
about 88 minutes, including stops.
Efficient technology
Globally, in the rail transport sector,
says Sim, there is a fundamental shift
towards using energy resources more
efficiently in the safe movement of
people and goods. ABB, he says, has
expertise in consultancy, electrification,
Flexible AC Transmission System
(FACT), traction transformers, converters
and motors as well as surge arresters,
semiconductors, medium-voltage
and low-voltage components for
renowned rail vehicle manufacturers
worldwide. “We hope to work hand-inhand
with our partners to power the
rails into the future,” he says.
Tapping energy from train’s frequent stops
Trains perform multiple stops to pick up or drop off
passengers and that’s where a lot of energy is wasted.
But it need not be so, as there is a way to tap this energy
through regenerative braking.
Laurent Maillefer, ABB’s regional sales director –
power electronics, says the energy recovered by one
train slowing down can be re-used by another train on
the same line.
Alternatively, it can also be transferred back to the
power grid, provided that DC substations are equipped
with bi-directional power converters. With the latest
developments, the energy recovered while the train is
braking can be stored in batteries or super-capacitors
installed on-board. The stored energy can then be reused
directly in the next acceleration phase.
While manufacturers are striving to minimise losses when designing a system,
ABB’s regional sales director
Laurent Maillefer
each step requiring a power conversion comes with some loss. As such, the fewer
steps one takes following the flow of energy from its source to the place it is used,
the better.
ABB has designed compact converter solutions where all elements are
integrated close together so as to store and re-use the energy, literally in the same
place. Using this method, up to 30% of energy savings can be achieved compared to
more traditional designs.
Klang Valley’s
LRT service will
be lengthened
by another
34 km with an
extra 30 stations
at a cost of
US$225 million
Passenger and commercial vehicles registered in Malaysia, 2000 to 2010
600,000
500,000
400,000
300,000
200,000
100,000
61,070
135,624
124,030
44,291
50,656 50,563
61,562
NOTE: The people quoted in this article
took part in the recent ABB-sponsored
forum themed “Powering the Rails in
Malaysia”, held in Kuala Lumpur.
0
282,103 416,492 366,788 442,885 497,459 486,342 543,594
2000 2005 2006 2007 2008 2009 2010
Passenger cars
Commercial & 4x4 vehicles
•

opportunities
Smart grids seen as super
engines for China’s growth
State Grid Corp to invest US$46 bil a year on smart grid over next 10 years
Smart grid investments to add at least 1% to China’s GDP annually
In the Chinese government’s working
report for 2011, State Council Premier
Wen Jiabao put forward a plan to develop
a country-wide network of smart
grids, widely considered by insiders to
be part of a national energy strategy.
Haier U-Home intelligent home appliance system
Media
entertainment
system
Environment
detection
system
Security and
alarm system
Remote
monitor system
The country’s largest power supplier,
the State Grid Corporation of
China, plans to enable the operational
areas directly under its administration
to achieve a power information
collection coverage rate of up to 100%
by 2015. A company executive reveals
that the power supplier is on track to
invest 3.45 trillion yuan (about US$533
billion) in the smart grid effort.
A co-worker says in an interview
that the company is forecast to invest
about 300 billion yuan (about US$46.4
billion) annually over the next ten
years. Insiders believe the investment
will eventually stimulate the capitalisation
of larger projects that might
amount to ten or even 100 times the
size of current investment.
Smart grids are being looked
upon as the super engine that will
drive the country’s economic growth
over the next five to ten years, and
the investment in them is expected to
Home gateway
Lighting and
curtain system
Video door
phone system
Failure
feedback system
Home appliances
control system
The market for Chinese intelligent home appliance systems, such as the “Haier U-Home”, is
expected to hit 124 billion yuan by 2015
line of a four-year plan at the beginning
of May this year to develop its
smart grid sector, setting investment
goals of 20 billion yuan annually and
output value goals of up to 150 billion
yuan and 300 billion yuan by 2012
and by 2015, respectively. Provincial
officials, in concert with 16 companies
and organisations who acted as
co-sponsors, formed the Smart Grid
Industry Association in September
last year.
The first meeting was attended
by over 50 companies. The association
now includes as members virtually every
leading company across the smart
grid industry chain in the province.
Many other provinces and cities across
the country, with the city of Shanghai
and Shandong province taking the
lead, are now also keen to develop the
sector.
The country’s many electronics
and high-tech firms are optimistic
add at least one percentage point to
the country’s gross domestic product
(GDP) annually, Wu Jiandong, chief
energy expert of Chinese Academy of
Sciences (CAS), says in an interview.
Jiangsu province issued the outabout
the potential development of
the smart grid industry over the next
decade and are aggressively jumping
on board as they expect the new
industry to promote a revolution in the
country’s consumer electronics and
home appliances sectors. Qiu Gang,
chief researcher at Samsung Economic
Research Institute, believes the
deployment of smart grids will accelerate
the integration of telecom, TV and
radio networks, and the integration will
transform how businesses are conducted
and how new products are developed
across a wide range of sectors.
Access to the smart grids will
pave the way for the development of
the full potential of intelligent home
appliances. The Chinese intelligent
home appliance market is expected
to take off over the next three to five
years, according to Zhu Xun, planning
manager at Haier Intelligent Home
Appliances Technology. The country’s
home appliance manufacturers,
including Haier and Hisense, started
developing intelligent home appliances
ten years ago. However, sales
of these appliances remain limited to
the earliest of the early adopters. As an
example, Haier’s 520 million yuan in
sales of intelligent home appliances in
2009 accounted for a mere 0.5% of the
manufacturer’s total sales of 124 billion
yuan for that year.
A report reveals that the Chinese
intelligent home market is expected to
achieve 124 billion yuan by 2015. As
home appliance makers of all stripes
stake out their slice of the intelligent
home appliance field, it is not difficult
to foresee the market expanding
five- or six-fold over the next three to
five years, surmises Chen Gang, vice
secretary-general of China Household
Electrical Appliances Association.
China’s smart grid market is
expected to deliver a total output value
of up to 40 trillion yuan (US$6.18
billion) in 30 years, said Xiao Liye,
director of the Institute of Electrical
Engineering, a research arm of CAS.
He believes the establishment of smart
grids will be a strategic opportunity for
China to drive the transformation of its
domestic demand system, promoting
the innovative development of a wide
swath of upstream and downstream
sectors. – Nanjing Shanglong Communications
•

opportunities
Lobby for smart grid
roadmap in Malaysia
Country needs demo projects large enough to engage stakeholders
Government recognition sought for smart grid deployment in sustainability agenda
With its national power utility
company having embarked on a small
demonstration project on smart grid,
Malaysia is now being lobbied to
develop a roadmap and institutional
framework to ensure coordinated
efforts for the long-term. A recent
national workshop on smart grid held
in Kuala Lumpur recently has yielded a
report that was sent to the Ministry of
Energy, Green Technology and Water,
and it is learnt, this will be followed up
on by industry representatives.
Although smart grid technology
has been embraced in many countries,
in tandem with developments in
renewable energy and energyefficiency
initiatives, industry circles
lament that the Malaysian government
has yet to come up with a policy
covering this <strong>green</strong> technology to
guide and support its growth in the
years to come.
Tenaga Nasional Berhad (TNB),
Malaysia’s state-owned utility, is in the
midst of implementing a demonstration
project that will involve 5,000
consumers at three locations. This is
among initiatives being taken as the
Halim Osman, secretary for the Malaysian chapter
of CIRED wants smart grid to be incorporated into
Malaysia’s national sustainability development
agenda
country heads towards total withdrawal
of subsidy for electricity generation in
four years.
Halim Osman, secretary for
the Malaysian chapter of CIRED (a
French acronym for an international
organisation dedicated to the
advance of knowledge in electricity
distribution), says Malaysia should
adopt smart grid as part of its
sustainable development agenda.
Halim was the chair of the
technical committee for the national
workshop, which saw presentations
that covered policy areas, envisioning
and road-mapping, smart grid
deployment experiences, enabling
capabilities and technologies and R&D
efforts in Malaysia. [The workshop
ended with a panel discussion on
the possible issues and solutions for
Malaysia to move forward in smart grid
deployment. See box story below.]
“Limited funding and
lack of incentives for
investment in smart grid
will result in limited pilot
projects on a smallish
scale, which have less
impact on sustainability
goals.”
Each country is differently
motivated when promoting the
smart grid. Countries like China and
India need to keep pace with their
high economic growth and rapid
urbanisation, while for the United
Kingdom, Germany and Australia,
the emphasis is more on pursuing a
low-carbon agenda. In Korea, Japan,
Singapore and the US, it is a part of
an overall plan to integrate with other
initiatives such as intelligent cities and
electric vehicles.
Studies by US-based Electric
Power Research Institute (EPRI)
National workshop on smart grid 2011: Recommendations for Malaysian policymakers
• Recognition by the government: The
government has to recognise smart
grid deployment as part of its sustainability
programme. Clear linkages need
to be established with the National
Renewable Energy and National Energy
Efficiency Master Plans.
• Smart grid vision, policies & strategic
deployment roadmap: The government
must ensure efforts are wellcoordinated,
and government agencies
and the utilities do not duplicate
efforts in R&D, and pilot and demonstration
projects.
• Government funding: The country
needs demonstration projects large
enough to convince stakeholders on
the tangible benefits of smart grid.
Such projects can be co-funded, but
the government should bear most of
the cost.
• Government intervention: Some
issues for the successful implementation
of the smart grid are beyond
utility companies. They include issues
like dynamic pricing and a regulatory
framework that incentivises
investment in smart grid technologies.
The government needs to help
utility companies overcome these
challenges; these include changes to
grid capabilities towards more active
management and optimisation, market
and regulatory development and
most importantly, customers’ role in
managing efficiency.
•

show that a slight dip from 1% to
less than 0.7% in annual growth of
electricity consumption may mean
savings of US$2 trillion for the US,
over the 2010-2030 period, compared
to the smart grid set-up costs of some
US$476 billion. “Without smart grid (in
the US), the average electricity bill will
probably rise by 400% over the next
20 years; with smart grid, the increase
will only be around 50%,” Halim says.
He says Malaysia has yet to
adopt smart grid as part of its national
sustainable development agenda
despite having ambitious goals of
reducing its carbon emission by 40%
from 2005 level, and jacking up its
renewable energy mix to 2,080 MW by
2020 and 4,000 MW by 2030.
“Transmission and distribution
(T&D) network operators or utilities are
doing their part in migrating to smarter
grid but investments are driven mainly
by other drivers, like capacity building,
security and reliability and operational
efficiency,” he says. “Limited funding
and lack of incentives for investment in
smart grid will result in limited pilot
projects on a smallish scale, which
have less impact on sustainability
goals.”
Malaysia’s progress
TNB chief engineer (system planning
& development) Charanjit Singh Gill
says TNB is testing the smart grid in
Penang, Kuala Lumpur and Johor Baru
and has ordered 1,000 meters for a
start. In June, it completed Phase 1
of its smart grid development, that is
improving the operational efficiency of
the designated distribution system.
“We are now at Phase 2 (until
2013); our emphasis is on improving
network and energy efficiency as well
as enabling and encouraging customer
participation (in controlling energy
usage),” he says.
Concurrently, Phase 3 (2011-
2015) will focus on reducing CO ²
emission and enable the integration
of renewable energy (RE) onto the
grid and the introduction of electric
vehicles. TNB will look into issues
that may arise related to the feed-in
of RE (mainly solar photovoltaic) into
the distribution system, the feasibility
of distributed energy storage and
developing a business model to
support electric vehicle charging.
Factors that drive the TNB smart grid plan
• Electricity demand growth needs large
resources: Demand will double in the
next 20 years (from 15 GW to 30 GW)
• Energy security is constrained by costs:
Government’s plan to restructure
subsidy for energy sector by 2015
poses severe challenge to utilities
• Implementation of feed-in tariff (FiT)
will generate growth of RE: Specific
technologies is required to stabilise RE
connections
1 billion smart meters globally by 2020
Pike Research forecasts that the world
market for smart meters will peak at
just over 100 million units in 2015,
followed by a gradual decline in annual
unit shipments. It says industry growth
will be characterised by regional waves
of adoption, starting with the North
American market, which will peak in
2012, followed by a peak in Asia Pacific
in 2015, in Europe in 2017, and more
gradual long-term growth in Latin
America, the Middle East, and Africa.
By 2020, the global installed
base is expected to reach 963
million smart meters, a penetration
rate of 59% among all installed
electric meters. Advanced metering
infrastructure (AMI), which uses
two-way communications networks
and integrated intelligence enable
transparency and management of
electricity usage. It is envisioned by
many utilities to be the foundation for
a broad array of new energy efficiency
and management services.
• Introduction of incentive-based tariff:
Experience and know-how gained in
the past may no longer be applicable
in facing the future
• Supporting government commitment
to reduce emission by 40% by year
2020
Source: Charanjit Singh Gill, chief engineer
(system planning & development) of TNB
Recent smart grid projects in South-east Asia
Vietnam: Radio frequency (RF) electronic
meter programme – around 300,000
more meters and 500 more Global
system for mobile communications/GSM/
GPRS multi-tariff meters to be deployed
in 2010/11
Thailand: AMR phase II – install 50,000
meters for large customers and 5.52
Tbyte data storage
Singapore: Intelligent energy system
pilot project, electricity vending system
pilot project and experimental power
grid centre
Source: Frost & Sullivan Asia-Pacific smart grids
project tracker March 2011
•

The
palm oil
business
v2.0
The cultivation and global trade of
agricultural commodities come with
well-documented costs and benefits for
people, planet and profit, but palm oil
cops the most flak.
•

As the publicity against it threatens
to become perennial, the <strong>Roundtable</strong>
on Sustainable Palm Oil (RSPO) attempts
to engage diverse stakeholder groups –
some warring – for a just and
sustainable solution.
The success of the RSPO depends on
the credibility and recognition of its
processes, and its ability to ensure
compliance with its principles,
of which two are key:
consensus, and free, prior and informed
consent – a signal failure
of lobbyists and governments.
Four RSPO members share their
views on driving the industry
and saving the planet.
•

cover
Tribes of the roundtable
Global certified sustainable palm oil (CSPO) production constitutes 9% of all
palm oil production, but only has 52% uptake
Communications campaign to whip up demand for products with CSPO label
By Su-May Tan
The <strong>Roundtable</strong> on Sustainable Palm Oil will work because it has the free,
prior and informed consent of its formerly warring members, says RSPO
secretary-general Darrel Webber
Big oil gets a bad rap, but it’s not the
black stuff we’re talking about. Palm oil
is a ubiquitous ingredient in everything
from cosmetics and ice-cream to animal
feed and pharmaceuticals, and it
has muscled out its rivals and sparked
a decades-old trade war, beginning
when the American Heart Association
bought newspaper advertisements to
say tropical oils caused heart disease.
Now, growers whisper conspiracy
theories about the hidden hand of
well-oiled lobbyists in everything from
World Bank policies and well-funded
<strong>green</strong> NGOs to business programmes
on the BBC and CNBC bought by the
Malaysian government. More recently,
the government of Malaysia, one of
the two largest country producers of
palm oil in the world, engaged with
Australian lawmakers who want to
push through a Bill that compels food
producers to understand palm oil as an
ingredient on food labels.
It’s complicated: as an agricultural
commodity cultivated in the tropics,
palm oil inevitably competes for land
with the rainforest, local communities
and indigenous peoples. The clearing
of land for plantations by open burning
in Indonesia – the cheapest way to do
it – caused a “trans-boundary haze” for
decades, some of it originating from oil
palm plantations. Add to the list labour
and native land rights, and brand boycotts
begin to snowball.
Against this backdrop of shifting
consumer sentiment, the RSPO
emerged in 2004 to proffer a solution
to diverse issues facing the palm oil
sector, depending on which seat of the
roundtable you are on. Ultimately, says
its secretary-general Darrel Webber, the
question the RSPO seeks to answer is:
can palm oil be produced sustainably?
Palm oil leaves a large footprint
in South-east Asia, with four million
hectares in Malaysia and seven million
in Indonesia. This places a big responsibility
on industry players as the equatorial
belt is high in biodiversity and
inhabited by many poor communities
whose ways of life are not necessarily
served by the global marketplace.
However, the palm oil industry is
also a big provider of jobs that no nation
can afford to ignore. Webber cites
statistics of one employee for every
five to seven hectares. Thus Indonesian
plantations could provide jobs for up
to a million people. “The RSPO is an
attempt to say there are good things
happening in this area,” says Webber.
And to do that, the RSPO has to
prove that you can produce palm oil
without destroying valuable habitats and
forests. In this belief, the RSPO and the
multinational globalisation agenda are
in congruence, which complicates the
criticism that the RSPO is led by environmentalists.
For the record, Webber once
worked for the World Wildlife Fund,
Supply and sales of certified
sustainable palm oil
Growth of RSPO members
MT/month
400.000
Number of
members approved
656
300.000
200.000
100.000
Jan 2009
Supply
Sales
Jan 2010
Jan 2011
600
300
0
Total
Ordinary
498
95
63
2004
2005 2006 2007 2008 2009 2010 2011
•

“We pride ourselves
in asking the hard
questions, which will
lead us to finding
the hard solutions.”
– Darrel Webber
The
circle of
influence
As a roundtable, the RSPO has
to be led through consensus.
It creates policies via:
• technical working groups,
• the executive board, and
• the general assembly.
The working group level has
representatives from all the RSPO
stakeholder categories of:
1 Plantation owners/producers
2 Consumer goods manufacturers
3 Processors and traders
4 Banks and investors
5 Retail
6 Social NGOs
7 Environmental NGOs
The working group operates not by
majority vote but by consensus. Every
representative in a working group
agrees 100% to a policy. Everyone in
a working group has a veto right. The
executive board operates similarly.
Because consensus entails robust
discussion and 100% agreement,
the policies that emerge out of this
approach tend to be strong. No
stakeholder has an advantage because
of greater numbers in any of the working
groups or the executive board.
The general assembly operates
on the basis of one man, one vote. A
proposal to change a policy can be
put up and voted on in the general
assembly. Malaysia and Indonesia
make up the largest membership at the
general assembly level; Malaysia has
the most members in the RSPO. The
RSPO assumes consensus is reached in
the absence of serious and sustained
objections. If no one objects, it is taken
that consensus is reached. If there is an
objection, negotiations are restarted.
which together with several multinationals,
such as Unilever, were the prime
movers of the RSPO.
Yanking the supplier chain
The RSPO comprises seven stakeholders
all along the supply chain, from
plantation owners and manufacturers
to purchasers and NGOs (see accompanying
story). Without the presence of
government or multi-lateral agencies,
critics question the effectiveness of
such an organisation. Webber, however,
explains that self-regulating initiatives
such as the RSPO often do not
need the involvement of government.
Industry-led organisations move
faster. The RSPO is voluntary; you
opt-in rather than being co-opted. It
is market-led – the consumer will determine
the behaviour of the supplier
chain. Webber asserts that the RSPO is
a multi-stakeholder agency, as opposed
to multi-lateral. “We pride ourselves in
asking the hard questions, which will
lead us to finding the hard solutions.”
The RSPO is guided by global
standards which it developed and
endorsed in 2005.
These standards are based on the
RSPO shorthand known as the 3Ps:
people, profit and planet, in a virtuous
free-market-like cycle, which the RSPO
believes is possible. The policy-making
process is what makes the RSPO tick
(see “The circle of influence”, above).
Keeping the bunch good
The RSPO ensures compliance via
third-party audits and is guided by
agreed principles and criteria. In the
event of a breach, the guilty party will
be asked to leave the RSPO (in the
worst case scenario), though this has
not yet occurred.
In most cases to date, an agreed
resolution is achieved, which means
the said company must be seen to
Members by category
Members from top ten countries
Social or
development
organisations
Retailers
6%
Banks and
investors
31.5%
Consumer goods
manufacturers
Switzerland
Belgium
4.4%
Singapore 4.4%
United 5.1%
States
6.5%
15.4%
Malaysia
Palm oil
processors
and traders
38.6%
Environmental
of nature
2.6% conservation
organisations
(NGOs)
17.3%
Oil palm
growers
2% 2% Indonesia
France
Germany
8.7%
9.5%
10.1% 15.4%
Netherlands
16.8%
United
Kingdom
Source: All graphics from RSPO
•

What is CSPO?
Certified Sustainable
Palm Oil (CSPO) is
palm oil that has been
produced sustainably,
whereby its production
is traceable through the
supply chain and each
facility along the supply
chain is certified. The
RSPO, based in Zurich,
Switzerland, is the only
internationally-based
palm oil certification
body. Its secretariat is
based in Kuala Lumpur.
Breaching the million
tonnes mark
Achieving the
million-tonne mark
in less than three
years, Sime Darby
Plantation Sdn Bhd
is now expecting its
production of CSPO
to increase to three
million tonnes in
four years (2015).
(Source: Sime Darby,
press reports)
184,000
tonnes
421,000
tonnes
1.5 million
tonnes
3 million
tonnes
2009 2010 2011 2015
comply with the criteria. The RSPO
looks to see if the company has a roadmap
towards this end and resources
for that roadmap. In other cases, the
results are quite apparent. For
example, Unilever no longer
purchases from plantation
company PT Sinar Mas which
was found to have breached
sustainability criteria.
The RSPO certificate is
given for a five-year period
during which time annual audits
and ad hoc visits are conducted
along the supply chain to ensure the
palm oil certified as sustainable at the
end of the supply chain (for example,
with the retailer) is genuine.
Controversial cases are still under
investigation, however, such as the allegations
against Malaysia’s IOI Berhad,
one of the RSPO’s larger producers of
certified sustainable palm oil (CSPO).
No conclusive judgement has been assigned
to this case but Webber asserts
that membership has opened the way
for much more discussion and dialogue
to happen. The grievance panel is still
discussing the matter and the RSPO
meets with the company regularly.
Certified futures
Webber is careful about the RSPO
specifying the cost of CSPO versus
non-certified palm oil, as these are
business-to-business transactions and
would be in violation of competition
laws. However, considering the cost
of certification and the tangible and
intangible benefits companies will get
in return, he deems it a worthwhile
venture.
He claims that certification only
appears to cost a lot but says that when
divided over millions of hectares, it
becomes nominal – for large growers.
However, there are additional costs
to comply with the standards. For
example, building workers’ quarters
that comply with agreed standards. “In
terms of profit, it is commercially advantageous
to become members. It also
ensures longevity in the industry which
“We encourage
opposing views,
but come to the
table with facts.”
– Darrel Webber
is the whole basis of sustainability,”
says Webber.
Branded goods
With consumers demanding ever more
justification for the products they
buy, it is not uncommon for a single
product to carry a handful of labels. As
a proliferation of labels penetrates the
market, Webber says the ones of lasting
value are those that can prove their
credibility.
As to how much traction the RSPO
trademark has gained, Webber says:
“Not far enough.” But it is the fastest
growing certification trademark in
consumer goods manufacturing.
Malaysia is now the largest supplier
of CSPO, a testament to its increasing
popularity amongst both suppliers
and consumers. Its largest plantation
company, Sime Darby Plantation Sdn
Bhd, expects its production of CSPO to
increase to three million tonnes in four
Delegates to the 8th Annual
<strong>Roundtable</strong> Meeting on Sustainable
Palm Oil (RT8) held in Jakarta last
November. The RT is the world’s
largest meeting on sustainable
palm oil where stakeholders
in developed and developing
countries exchange views and
experiences; and to strengthen
their co-operation towards a
unified vision. This year’s event
will be held in Kota Kinabalu,
on the theme “RSPO Certified.
Transforming the Market. Together.”
•

years, after having breached the one
million tonnes mark recently.
Its managing director Franki
Anthony Dass told a press conference
that in 2009, the company produced
only 184,000 tonnes of CSPO, rising
markedly to 421,000 tonnes last year.
The company is also increasing efforts
to reduce its carbon footprint by implementing
various <strong>green</strong> technologies.
Webber believes palm oil is sustainable
as many existing estates can
improve their production efficiency and
sustainability methods. Palm oil is also
the world’s most efficient edible oil by a
factor of between four and ten, in terms
of landuse. “The RSPO does not force
people to stop palm oil production,” he
says. “(Instead) it would like sustainable
development to continue and
unsustainable development to stop.”
Counting on the consumer
While the RSPO has made good progress
in terms of producing CSPO, there
needs to be greater market acceptance
of this product. Global CSPO production
constitutes 9% of all palm oil production,
and only has a 52% uptake.
Webber believes the reason is due to
a lack of awareness and the RSPO is
tackling this matter via a communications
campaign, working with partners
in Hong Kong and India. The idea is to
leverage on the CSPO trademark and
for consumers to “pull it” through the
supply chain by demanding for such
certified products.
Worldwide, corporations are
beginning to value ethical production
methods and the demand for it, even in
China and India. Unilever, for example,
now tracks where all its raw material
comes from because the new consumer
demands verification of a product’s
<strong>green</strong> provenance.
Another concern for the RSPO is
in achieving more instances of consen-
sus from its stakeholders. A roundtable
is only as good as the members it attracts
and the RSPO does face a problem
of getting enough people to come
to the table due to various factors such
as funding and requisite experience
and expertise.
Webber believes in the power
of a multi-stakeholder panel. “We
encourage opposing views, but come
to the table with facts,” he notes of the
current lack. The roundtable is meant
to stimulate discussion, to mediate the
issues, and be where everyone has
veto power. Conflicting views lead to
a middle ground; at least, that is the
theory.
If Webber has a bee in his bonnet,
it is this: “We want to kill the notion
that it’s NGO-led (and hence too difficult
to subscribe to) or industry-led
(<strong>green</strong>wash).” To make it all work, he
says, “is like herding cats”. All stakeholders,
it seems, are in with a shout.
•

cover
The tough route to <strong>green</strong>
palm oil
Mandatory imposition of national standards will impose operational and
financial burden on growers, and create confusion
Companies that embark on journey of RSPO certification should be given
support as the process is onerous
By Jason Tan
In June this year, Malaysian
multinational palm oil company Kuala
Lumpur Kepong Berhad (KLK) made
world headlines when it was accused
by a London-based non-governmental
organisation of breaking a twoyear
ban on forest-clearing by the
Indonesian government – the day after
President Susilo Bambang Yudhoyono
had signed it into law.
In an emailed statement, KLK
group plantations director Roy Lim
told newswire Reuters: “Existing
concessions with valid licences are
exempted from the moratorium and be
allowed to continue.”
It was but one example of a
clash of fundamental virtues – of
business, and conservation – amidst
the realities of the global economy and
climate change, kissing cousins now
perched together on the precipice of
catastrophic failure.
In the event, 731 ha of highconservation
land, as defined by the
<strong>Roundtable</strong> on Sustainable Palm oil
(RSPO), was set aside by KLK, “and
remains untouched,” says Lim in
response to Green Purchasing Asia.
“We have briefed the RSPO secretariat
and the coordinator of the RSPO
grievance panel.”
In a separate but related
complaint, KLK responded by
terminating the contract of a supplier
that reportedly recruited workers into
abusive labour conditions. “The matter
was discussed in the presence of the
social NGO [concerned] together with
the aggrieved workers and amicably
resolved at the [RSPO’s] <strong>Roundtable</strong> 8
conference,” says Lim.
It would be inconceivable that
more cases like the above do not
exist (they do; see interview with
Sawit Watch). The surprise is that
multinationals see fit to subject their
operations to the scrutiny of NGOs,
and even agree to be regulated by
them under rules they both have had a
hand in making.
As the RSPO is a voluntary,
multi-stakeholder platform for selfregulation,
its legitimacy depends
on the effectiveness and continued
compliance with its comprehensive
Principles and Criteria, which are not
legally binding. Perhaps it should be
no surprise then that there has been
compliance, given the careful cost
and benefit analysis that goes into a
decision to opt in. It is also pertinent
to ask if governments, in cases of large
land disputes, manage to enforce the
law with as much care to due process
and social justice. A multinational
company frequently has the capacity
to monitor and ensure the compliance
of its suppliers that government
enforcement agencies may lack, and
is by comparison relatively more
transparent and easily held to account,
due to being publicly listed, and to its
visibility as a brand.
The RSPO’s effectiveness, Lim
implies, is because “it has so far
gained recognition in the international
community dealing with vegetable oils”
and thus the fact that membership may
be suspended or revoked in the event
of a serious breach hurts a company’s
reputation and, consequently, its
market access to sustainable palm oil.
As Lim’s frank answers to the
questions emailed to KLK, below, make
clear, an initiative such as the RSPO
does not convert multinationals into
born-again environmentalists (nor
NGOs into market fundamentalists).
It shows the need for a credible,
level platform that facilitates clear,
robust, transparent discussion by all
stakeholders that is not concealed by
national politics and lobbyists.
Recently, the Malaysian minister
for commodities Tan Sri Bernard
Dompok remarked that certification
of sustainable palm oil involves
significant additional costs,
especially for the numerous
smallholders of the government-run
Felda scheme, and that consumers
might be unwilling to pay for this
through higher prices of goods. How
does KLK view the competitiveness
of RSPO-certified palm oil?
The escalating cost of certification
and the issue of premiums for CSPO
have posed a great challenge to palm
oil producers. In the longer term
though, there will be market access as
consumers demand for CSPO produced
under [RSPO] sustainability standards.
•

The RSPO has been described by the
Malaysian government as moving the
goalposts, with new requirements
motivated by the NGO community.
What does KLK think about this?
We are of the view that RSPO should
get as many parties as possible on
board for the certification process
under a common platform and
parameters. The certification process
is onerous and difficult enough without
GHG (<strong>green</strong>house gas) issues, indirect
changes to land use criteria, etc; in
fact, it is more stringent than the ISO
certification process. Therefore, those
who embark on this journey should be
given support as, by doing so, more
companies would come on board and
the positive impact of this would be far
more significant.
What has been KLK's experience of
engaging with the NGOs, and other
stakeholders on the RSPO, and the
integrity and effectiveness of the
facilitation processes involved? Is a
level-playing field ensured for the
different stakeholders, for example?
We are ready to engage our
stakeholders if they require
explanations, clarification, testimony,
to the extent that we are ready to
arrange visits to our property so they
can see for themselves, if required.
On our part, we strive to do the right
things guided by the 3Ps: People,
Planet, then Profit, and in this respect
[our operations] will cover the wide
spectrum of our stakeholders.
What is KLK's policy on engaging
with NGOs on issues related to the
industry, both within and without the
RSPO?
We do not have a specific policy on
engaging the NGOs but recognising
the fact that we are not perfect,
we are open to accept positive and
constructive comments to improve our
operations.
Is the RSPO led by NGOs, as alleged
by some quarters?
The composition of the board, its
management and members reflect the
stakeholder representation. Leadership
should be neutral and strictly focus on
the promotion of production and use
of CSPO.
On the relevance of the RSPO to
smallholders, minister Bernard
Dompok has said: “Almost half of
the industry doesn't know how it
will benefit from RSPO certification.
There is no motivation for the
small farmers because none of
the premium would trickle down
to them.” How does KLK see the
RSPO benefitting smallholders,
and what is its incentive in helping
to ensure this, given that it has its
own plantations and mills over
which it has control, and which are
presumably more efficient?
Smallholders should be further
educated on the need for best
practices and this can best be done
by extension services provided by
the authorities or the bigger parties
who do business with them. In
Indonesia, we extend this further to
KKPA (a cooperative credit scheme
for smallholders) where we help the
local community to develop their land
by providing competitive financing
and management. Ultimately, they
will be able to benefit in terms of
market access if they can integrate
[their operations] with supply chain
certification.
What is KLK's policy on the RSPO's
Principles and Criteria, especially
on land rights, workers’ rights, and
a fair price for smallholders, and
how it can realistically put these into
effect while maintaining economic
efficiency and its competitiveness?
Our policy is to abide by the laws of
the country in which we operate.
KLK committed to full certification
A founding member of the RSPO,
KLK is Malaysia’s third largest listed
plantation company, with a plantation
land bank of more than 250,000
hectares in Malaysia (in the Peninsula
and Sabah) and Indonesia (Belitung,
Sumatra and Kalimantan). The
company is listed on the Main Board
of Bursa Malaysia (Malaysia’s stock
exchange) with a market capitalisation
of RM18 billion (as at September
30th, 2010). It is also involved in
manufacturing (oleochemicals and
derivatives), property development
and retail. It has over 25,000 employees
worldwide and plantations
A key component of RSPO Principles
and Criteria is transparency. In KLK's
estimation, how well does the RSPO
Supply Chain Certification System
allow for traceability, and what
can be done to improve business
and consumer confidence in the
provenance of palm oil supplies?
We have no experience in the RSPO
Supply Chain Certification System yet.
We are in the process of preparing
our refinery in Sabah for supply chain
certification. As not all suppliers are
RSPO-certified, this may require
stringent and tedious procedures
to segregate the oil for traceability
purposes.
“Whilst producers are
trying their very best
to meet the standards
set by the RSPO, further
mandatory imposition
of national standards
would impose a burden
both operationally
and financially.”
constitute 81% of its pre-tax profit.
KLK believes RSPO-certification
of oil palm growers will increase
public acceptance of palm oil in food,
fuel and feedstock, and help it to
penetrate the global commodities
market. To date, the company’s entire
Sabah operations (in Lahad Datu and
Tawau) has been RSPO-certified, and
produces 180,000 tonnes of CSPO
annually. Supply chain traceability
via its refinery in Sabah is now being
implemented. KLK is committed to
full certification of all its operating
centres in Malaysia by 2013, and in
Indonesia by 2014.
•

The governments of Malaysia
and Indonesia have expressed an
intention to set their own national
standards for certified sustainable
palm oil. Should the national
standards be lower than the RSPO
standard? Which does KLK follow?
The frustration of producers is that
whilst they are trying their very
best to meet the standards set by
the RSPO, which is currently the
only one with multi-stakeholder
acceptance internationally, further
mandatory imposition of national
standards would impose a burden
both operationally and financially. It
may also lead to confusion as some
producers may have to comply with
up to three separate systems if they
operate in Malaysia and Indonesia.
How does KLK see the RSPO and
governments working together?
What conditions might it take for
this to happen?
Governments will act in the national
interest and they have to take care
of smallholders who may not have the
resources to go for certification or if
conditions become too difficult for them
to do so. These are issues for the RSPO
to consider and conditions set must be
realistic, reasonable and achievable.
The Australian Food Standards
Amendment (Truth in Labelling –
Palm Oil) Bill 2010 is based on
the premise that palm oil is an
industrial commodity that results
in extensive deforestation. How
possible is it to sustain the growth of
the palm oil industry by cultivating
new plantations only on non- or
low-conservation value forests, as
currently defined by the RSPO?
Malaysia will be sending
representatives to Australia for a
committee hearing before the Bill is
debated in the Australian Parliament.
We believe the misconceptions of
Malaysia’s palm oil will be corrected.
This (labelling) is an issue involving
governments. Individual producers
are likely to make decisions [on new
plantations] based on economic
considerations.
How close is palm oil, as it is
currently produced, with its intensive
use of land, chemicals, energy
and especially water, to being a
“renewable resource”?
Is it not already a “renewable
resource”? Palm oil has a 37%
GHG saving compared to the fossil
fuel reference and this figure can
be improved with methane capture.
Asking producers to plant on degraded
and less fertile soil is not the best
business proposition. After all, being
the most productive oil compared to
its competitors, palm oil will need
much less land to produce the same
amount of oil. Also, being a perennial
plantation forest, its sequestration of
CO ² is just as efficient as the rainforest
if not better and this is for about 25
years until it is due for replanting.
cover
Fronds of a dilemma
25,000 farmers in schemed smallholdings in three countries achieved RSPO
certification last year
Future of smallholder farmers is in question, due to lack of access to financial
and other necessary services
By Jason Tan
The environmentalist’s dilemma,
restated: what do you do with all the
jobless people who once made a living
off unsustainable oil palm plantations?
The corporation’s dilemma,
restated: where to plant, when the
planet can no longer sustain consumer
demand and economic growth?
The point is this: while the palm
oil sector underpins the economies of
Indonesia and Malaysia, its industrialscale
cultivation comes with farreaching
social and environmental
consequences that are not yet fully
accounted for in its pricing.
Research by the Londonbased
Institute of International
Development and Environment
(2006) notes the significance of
smallholders in Indonesia and
Malaysia, who account for 35% to
40% of the total area of planted oil
palm, and as much as 35% of output
in Indonesia, according to the RSPO.
“I was doing research in a town
in Sumatra and I went to a local school
and nine of the 13 teachers had oil
palm plantations,” John McCarthy told
BBC Radio 4’s Food Fights programme
last year. An economist with the
Australian National University and an
industry expert, McCarthy thought that
oil palm cultivation might be creating
a new rural middle-class. As he went
deeper into the woods, he found that
villagers with four hectares or more
earned an average of US$12,000 a
year. Those with two hectares earned
much less, at US$2,000 a year, and
those below the poverty line had no oil
palm plantations.
But the link between oil palm
hectarage and poverty or affluence
is not straightforward. There are
state-supported smallholders, and
independent smallholders, and an
alphabet soup of schemes in between.
The former can have better yields, and
the latter better earnings. Apart from
fluctuating commodity prices, there
is the question of management; in
•

Malaysia, the government-run Federal
Land Development Authority (Felda)
smallholder scheme faces several
class-action lawsuits by smallholders
for undervaluation of yields.
There is the question of control
of nature. Because the fresh fruit
bunches (FFB) of oil palm must
be processed within 24 hours of
harvesting, expensive mills have to
be built within or near to plantation
holdings, which affects the lives of local
and indigenous communities around it
in various dimensions – the earnings
of smallholders, for one, depends on
their relationship with the mills, while
the industrial processing of palm oil
demands extensive pollution mitigation
measures if the local (and global)
quality of life is not to be affected.
The corporation’s dilemma is
represented by Sawit Watch, an
activist group set up in 1998, in the
wake of the Asian financial crisis.
It is part of a network of over 50
local organisations working with
communities in Sumatra, Kalimantan
and Sulawesi and has documented
over 500 conflicts, mostly rooted
in land disputes and compensation
over smallholding arrangements. It
points out that such conflicts might be
reduced, if not avoided, if governments
and corporations use the principle
of Free, Prior and Informed Consent,
which has been adopted by the RSPO,
and that its members commit to.
Sawit Watch says it seeks to
promote the best deal for those
communities that choose to live with
oil palm plantations, and for those
that choose otherwise, to secure their
land rights and sustain their traditional
community adat laws through conflict
resolution. Its actions include taking
land right cases to court, and the direct
occupation of lands.
A turning point in Indonesian
history illustrates how what plays out
between actors on the world stage
affects ordinary lives. As Sawit Watch
notes: “The Indonesian government
stopped new foreign investment in oil
palm plantation in early 1997, because
1.5 million hectares had already been
allocated for oil palm plantation to
Malaysian and other foreign investors.
The IMF/World Bank’s 50-point
programme for Indonesia to counter
the economic crisis of 1997 was
The link between oil
palm hectarage and
poverty or affluence is
not straightforward
conditional on the liberalisation of oil
palm plantation, but was not based on
any social or environmental studies
carried out by the World Bank.”
Following pressure from
NGOs, the World Bank Group this
year revised its engagement policy
with the palm oil sector to reflect
the triple-bottom line of people,
planet and profit. Couched in more
consultant-speak, the management
of the world’s forests has changed
hands: from local communities
to multinational companies; from
catering for local economies to the
global one; from mixed crops to
agricultural commodities. The search
for sustainability might entail a
change of strategy, from mergers and
acquisitions and joint ventures.
Norman Jiwan of Sawit Watch
responds to emailed questions from
Green Purchasing Asia below.
Why did Sawit Watch choose to
join the RSPO rather than use other
means to achieve its objectives?
The RSPO adopts, promotes and
encourages sustainability of the palm
oil sector that is consistent with one of
the social justice mandates (of Sawit
Watch) for smallholders farmers,
labourers, indigenous peoples and
local communities severely affected
by the palm oil sector. In 2004, Sawit
Watch voluntarily decided to join RSPO
as one of its strategies in promoting
responsible sustainable palm oil.
What has been the response of the
multinational companies in the
RSPO to the proposals of the NGO
members, in general, and to those of
Sawit Watch, in particular?
The responses of MNCs have been
varied, but they have largely been
reactive instead of proactive and
constructive to NGO proposals;
for example, on indicators for
<strong>green</strong>house gas emissions, new
planting procedures, and grievance
[mechanisms]. Sawit Watch has been
critical about human rights violations,
labour and social issues, but is seen as
•

Norman Jiwan of Sawit Watch believes the
RSPO needs to mobilise more smallholders for
certification and empowerment programmes
playing black and negative campaigns
against the palm oil industry.
What kind of relationship exists
between Sawit Watch and
multinationals that have, among
others, their own plantations?
With the private sector, Sawit Watch
takes an independent [stance] of
transparent and responsible critical
engagement, and open dialogue with
RSPO ordinary members in promoting
human rights and conflict resolution in
the palm oil sector. Sawit Watch provides
no consulting and professional services
to the private sector.
How many – and how well – are
smallholders represented on the
RSPO, versus the multinational
plantation owners and mills? What
have been the challenges?
Smallholder oil palm farmers are
represented under the grower category
of membership. The smallholder seat
is occupied by Felda, the national
agency for Malaysian smallholders.
An independent representative is
much needed in bringing the voices
and aspirations of independent
smallholder groups. In 2010, RSPO
grower members from Malaysia,
Indonesia and Papua New Guinea had
succeeded in bringing [some of] their
schemed smallholders to achieve RSPO
certification, which benefited 25,000
farmers. This is a breakthrough, but
the RSPO needs to mobilise more
smallholders for certification and
inclusive empowerment programmes.
In terms of economies of scale,
smallholders cannot compete on
price with large plantations. Is it
possible for smallholders of cash
crops to be paid a fair price for their
produce given this fact?
Yes, it is possible. Large plantations
and smallholders are both FFB (fresh
fruit-bunch) producers but it is not fair
for them to compete without dealing
with the political economy and how
it affects pricing; a fair price implies
not only economic consideration but
also a political commitment to change
the existing pricing mechanism which
discriminates against smallholders,
because it is largely [set by palm oil
producers rather than oil palm growers].
This includes government pricing
regulations that are made unilaterally.
Sawit Watch seeks to secure “land
rights and sustain traditional
community (adat) laws through
conflict resolution and lobbying
government at the national and local
level for land reform and community
sovereignty over natural resource
management.” How is it possible
to initiate land reform through the
RSPO, which essentially relies on
non-legally binding self-regulation?
RSPO standards, if consistently
implemented, will lead to best
practices consistent with international
norms and values [that can and] must
uphold business activities that are
culturally, socially and environmentally
[sustainable]. These can be a useful
A boy in Indonesia
guarding his family
smallholding’s harvest
of fresh fruit bunches
precedent for the development of
domestic and national legislation.
How effective can any dispute
resolution mechanism be, in the
absence of legal enforcement?
It can be effective when a genuine
commitment to recognise, resolve, and
mitigate disputes is present. It is not
about merely “do no harm” as required
by law, but doing it right, whether or not
legal enforcement exists.
One of Sawit Watch’s goals is “to
assist communities in developing or
maintaining economically, socially
and ecologically sustainable land/
forest management.” What does Sawit
Watch see as the future for palm oil
smallholders?
The market for commodities is
uncertain, and smallholder farmers do
not have control to price and market
their own FFB. Their participation in the
market is used only to consolidate land
and mobilise the labour force to produce
FFB. Therefore, the future of smallholder
farmers is in question – if not uncertain
– not only at replanting periods, due to
lack of access to financial and necessary
services. Also, in extreme cases, when
agricultural land has been depleted by
monoculture oil palm plantation, there
is no more arable land left for food and
alternative crops.
•

cover
Helping brands <strong>green</strong>
supply chains
70% of Cargill’s crude palm oil bought from RSPO members
By year 2050, palm oil will be a major part of the vegetable oil supply chain
By Jason Tan
Privately-owned US multinational
conglomerate Cargill is one of the
largest companies in the world. It
describes itself as “an international
provider of food, agricultural and risk
management products and services”.
In a nutshell, from its original business
of trading and processing agricultural
commodities, it now offers a suite of
related products and services for a
multitude of industrial applications,
from animal feed and pharmaceuticals,
to food manufacturing, construction
and steel.
Cargill has presence in 63
countries, and 130,000 employees. Its
stated revenues for its fiscal year of
2011 are US$119.5 billion. The scale
and integrated nature of its business
mean that it can, by default, influence
the business practices of its suppliers,
including for palm oil, as well as trade
policy, changes to which would keenly
affect its operations.
It owns two oil palm plantations
(PT Hindoli and Harapan Sawit Lestari
in Indonesia) and 12 refineries worldwide
that “buy, refine, process and
market palm oil products from its own
and other plantations”.
The company gave itself two
deadlines this year: by 2015, all its
palm oil products (but not yet palm
kernel oil) it supplies to customers in
Europe, the US, Canada, Australia and
New Zealand, will be RSPO-certified
and/or originated from smallholder
growers. By 2020, this commitment
will be extended across all its oil and
trading businesses to cover 100% of
its palm oil products and all customers
worldwide – including China and India.
At the end of last year, 70% of Cargill’s
total crude palm oil was purchased
from RSPO members.
“The product [palm oil]
itself is the most efficient
way to feed a growing
world by having to use
much less land to increase
the supply of vegetable oil
than any other oil [crop].”
Bruce Blakeman, vice-president for
corporate affairs, Cargill Asia Pacific
Brand new expectations
While Cargill is less well known to the
consumer public, its customers are
some of the biggest brand names in
the world, who must respond to public
campaigns run by environmental
NGOs such as Greenpeace and the
Rainforest Action Network. More
frequently, these brands have to
demonstrate that their supply chains
are sustainable.
As awareness of the environmental
and social costs of the commodities
sector rise, public opinion
has reached right through the supply
chain to demand “sustainable business
practices”. “Sustainability is a critical
factor to many of the brands we supply,”
emphasises Bruce Blakeman, the
company’s vice-president of corporate
affairs for the Asia Pacific, in an email
to Green Purchasing Asia. “They look
to us to help them develop their supply
chains.”
Free trade and global food
The RSPO, he says, shows that
the industry can be sustainable
without government intervention
(“Philosophically, we [Cargill] believe
the industry can self-regulate”) and
that food production should continue
to be globalised.
The company’s point of view
on “Agriculture and trade policy”, as
found under the Corporate Responsibility
section of its website, states it
is “promoting open markets to help
nourish people worldwide… Cargill’s
support for open markets and free
trade underpins our vision, to be the
global leader in nourishing people.” It
supports “investments in policies that
allow food to flow freely across borders”
and trade adjustment schemes
“for those whose jobs are displaced as
a result of changing production patterns.”
The following is Blakeman’s
response to GPA’s questions, via email:
What was the motivation for
Cargill to become a member of
the RSPO? What are the incentives
or competitive advantages of
membership?
We saw the benefits of a multi-stakeholder
group that included all parts
of the supply chain and the NGOs
concerned about oil palm-related issues
that came together in a forum to
agree on some principles as the best
way to move forward. We thought we
•

had some good information to add to
the dialogue.
We also wanted to know
what others thought about issues
surrounding oil palm. If we are going
to have to feed nine billion people by
the year 2050, palm oil is going to be a
major part of the vegetable oil supply
chain. How oil palm is developed is a
critical issue and it should have some
established rules. The product itself
is the most efficient way to feed a
growing world by having to use much
less land to increase the supply of
vegetable oil than any other oil [crop].
All these factors went into our decision
to join the RSPO.
To what extent does ensuring the
traceability and provenance of
Cargill’s palm oil supply chain,
according to the RSPO Principles
and Criteria, add to the cost of doing
business for Cargill?
The palm oil supply chain is currently
structured to provide a bulk commodity
to the end-consumer in the most
efficient way and at the lowest cost
possible. There will inevitably be
costs in the supply chain to provide
all four RSPO trading models (Identity
Preserved, Segregated, Mass Balance
A tractor transporting fresh fruit
branches to an oil palm mill. 100%
RSPO-certified products have the highest
price premium due to the costs related to
transport, storage, handling, processing,
manufacturing and distributing of fullysegregated
products
and Book & Claim, which differ in
traceability; see www.rspo.org).
There will be significant
investment needed for growers,
traders and processors to meet the
RSPO guidelines for each trading
model. These investments will include
additional storage facilities, and added
costs for transportation, handling and
certification. Each part of the supply
chain will need to pay their share of
the costs growers and processors will
need to incur to meet RSPO guidelines.
We would expect fully-segregated,
identity-preserved, 100% RSPOcertified
products to have the highest
price premium. This is due to the
complexity of the supply chain and the
costs related to the transport, storage,
handling, processing, manufacturing
and distributing of fully-segregated
products.
It is expected that the lowest
premium will be for the Book & Claim
model. The major cost will be the
charge that the sole RSPO-endorsed
broker, GreenPalm, will make to manage
the Book & Claim system. The
GreenPalm fee is set at US$4 per metric
ton or per certificate, plus US$1 per
metric ton for RSPO [note: figures are
at the time of writing; it is learnt the
executive board is deliberating on this
matter]. There may also be additional
costs related to this trading system.
What has been the response of
Cargill’s suppliers to its membership
of the RSPO and of its adoption of
RSPO Principles & Criteria so far?
The response by our customers
and our smallholder suppliers has
Many oil palm
estates provide not
only employment
but also proper
housing facilities
for the workers
•

een overwhelmingly positive. Our
customers are looking to Cargill for
sustainable palm oil products to meet
their own customers’ expectations;
they are looking to us to help them
navigate the palm oil supply chain
to deliver sustainable products. Our
Hindoli smallholders (in Indonesia)
have benefited from the good
agricultural practices RSPO requires,
that result in higher yields and
increased safety, plus we share the
price premiums with our smallholders
in extra payments.
In practical terms, how effectively
can Cargill ensure that its suppliers
comply with the criteria for RSPOcertified
palm oil?
We collaborated with WWF last July
to assess our suppliers in Indonesia to
gauge the progress in implementing
the RSPO standards. Independent
assessors appointed by WWF are
working with Cargill’s suppliers on
specific RSPO criteria to identify any
issues or gaps. WWF is designing the
process, selecting the assessment
teams and will supervise the work.
Cargill then works with our suppliers
to implement the criteria.
We also work with our NGO
partner, Fauna & Flora International,
to help smallholders better understand
the RSPO and its criteria for
certification, as well as with Control
Union Certification – an RSPO-
“Sustainability is a critical
factor to many of the
brands we supply.”
Oil palm plantations provide shelter
and food to animals as well; this pair of
monkeys caught socialising on camera
adds to the list of animals found in oil
palm plantations
Barn owls are
reared as biological
pest control
to reduce the
population of
rats in oil palm
plantations
approved certification body – to
provide training to our crude palm oil
suppliers in Malaysia.
Some environmental groups think
that multinational conglomerates
will only change their way of doing
business in response to public
pressure and government regulation.
Is this true in Cargill’s case, with
regard to palm oil?
Even before the RSPO Principles
and Criteria were finalised, Cargill
had our own policies in place for
responsible palm production on
our own plantations. These include
commitments to not plant on high
conservation value forests (HCV); to
not develop new plantations on deep
peat land or land that would threaten
biodiversity; and a strict no-burn
policy for land preparation. We had
strict policies on social issues as it
relates to our plantation workers and
communities around our plantations.
For many years we have built schools,
provided for teachers’ salaries to the
government, funded medical clinics,
used owls for pest control and other
measures to promote sustainable oil
palm production.
We are also responding to the
needs of our customers. Sustainability
is a critical factor to many of the
brands we supply. They look to us to
help them develop their supply chains.
What is Cargill’s view on the RSPO
engaging with multilateral agencies
to create legally binding and
enforceable standards of sustainable
palm oil or commodity production,
or can the industry self-regulate
successfully?
Philosophically, we believe the industry
can self-regulate. The RSPO is a
good example of how an industry can
come together and develop a set of
criteria that can be accepted by most
of the stakeholders in the supply chain.
There should be one set of criteria and
production standards that all growers,
traders, producers and end-users
should adhere to for palm oil. The
industry and its stakeholders are best
positioned to set those standards.
Should political donations by
members be covered by RSPO
Principles and Criteria?
As a policy, Cargill does not give any
political donations outside of the US,
where they are strictly regulated and
disclosure is mandatory.
What is Cargill’s outlook on the
sustainability of agricultural
commodities, as they are currently
grown, traded, processed,
manufactured and sold globally?
Sustainability is becoming a more
critical issue for our customers. We
expect to see more sustainability
roundtables on many more commodities
over the coming years. The RSPO
has been a great example of how
sustainability programmes can be
put together to meet many [diverging
interests] and needs.
•

opportunities
Fibrous kenaf could be
Malaysia’s third big crop
Versatile crop used for clothing, bumpers, walls, even soaking up oil spills
Demand from Australia, Europe, Japan and Korea
By Eleanor Chen
Native to Sudan, Africa, kenaf is a
hardy crop cultivated for its fibre and
woody core; both have many industrial
applications. The Malaysian Timber
Industry Board (MTIB) director
general Dr Jalaluddin Harun says they
are used to make jeans in China; for
pulp and paper in the US, Mexico and
Thailand; indoor panels and other
interior components for high-end cars
like Mercedes Benz and BMW; as
animal or cattle feed, in erosion control
materials; and in composite material
for the construction industry among
others.
The Armour Factory, a company
in Malacca, south of Kuala Lumpur,
is doing research on blending kenaf
with Kevlar (a DuPont Co trademarked
synthetic fibre that is said to be five
times stronger than steel) to make
lighter bullet-proof vests. Another
company is trying to use kenaf to
make geo textiles for erosion control.
A factory in Sabah produces paper
from oil palm fibre and now plans to
blend kenaf with fibre from empty fruit
bunches (EFB) for future production.
A member of the Malaysian
Kenaf Entrepreneur Association,
Harusmas Agro Sdn Bhd (HASB)
is currently developing kenaf fibres
for use in exterior automotive parts
such as bumpers. In partnership with
Universiti Malaysia Sabah, their kenaf
bumper project was shortlisted as a
finalist at the JEC Composites Show
Paris 2010 Innovation Awards.
Says the association president
Rusila Kamarulzaman, kenaf is a lot
more flexible than wood or even oil
palm’s EFB. “On the crude side, it can
be used for horse bedding. The core
has got very good absorbent properties
and can be used like straw. It can also
be used to clean up oil spills.” Oilabsorbent
booms made of kenaf were
used to contain the Deepwater Horizon
oil spill at the Gulf of Mexico last year
and proved to be 100% effective.
She adds: “Australia has demand
for composite decking. In Europe, they
want the fibre to make textiles like
linens that can be sold at value-added
prices. You can even make rayon out
of kenaf. It can also be turned into
Malaysian Timber Industry Board (MTIB) director
general Dr Jalaluddin Harun
“Demand exceeds supply
in Malaysia. For example,
90% of PEWKM needs
comes from Bangladesh,
with the remainder from
Myanmar, Vietnam and
Malaysia.”
carbon to absorb smells from the
fridge. Acceptance of kenaf products
is mostly from outside Malaysia but
more and more people want to venture
into kenaf production. For example, a
local furniture company wants to make
garden furniture out of kenaf as it is
suitable for outdoor use.”
The main value of kenaf lies in its
fibre, which sells very well. Industry
sources say the highest grade of fibre
can fetch US$600 per tonne. The price
of kenaf products depends on the
process and specifications. The beauty
of kenaf is that it is eco-friendly, strong
and very light.
Jalaluddin believes that kenaf is
an important crop as it is fast growing,
can yield two harvests per year and
can yield 15–20 tonnes per hectare
(dry weight basis) with the right seeds
and seedlings. Depending on the yield,
3–5 tonnes (20%) is made up of fibre.
Maturity is about four to four-anda-half
months. Currently, Malaysia
produces only 200 tonnes of kenaf
monthly.
In comparison, Panasonic
Electric Works Kenaf (Malaysia) Sdn
Bhd (PEWKM) consumes about 600
tonnes of fibre monthly at its Kuantan
plant in Pahang. Established in 2004,
more than 90% of its supply comes
from Bangladesh with the remainder
from Myanmar, Vietnam and Malaysia.
According to industry sources,
the factory currently produces
60,000 pieces of kenaf fibreboard
per month to make wall panels and
doors, all of which are exported to
Japan for the housing and building
materials industries. Kenaf fibreboard
is increasing in popularity among
housing developers for its light
weight, high strength and eco-friendly
characteristics.
PEWKM signed a memorandum
of understanding with the National
Kenaf and Tobacco Board (NKTB)
last April to promote the development
of the kenaf industry in Malaysia and
to enhance cooperation in the supply
of kenaf. As the largest company
that uses kenaf in Malaysia, PEWKM
needs large quantities of fibre. Their
challenge is to improve local supply to
their plant.
The Malaysian National Timber
Industry Policy (NATIP) recognises
kenaf as a potential raw material,
although it is cultivated as an
agricultural crop. The use of kenaf
in composite materials explains its
promotion by MTIB, which considers
it important not to rely on conventional
sources of material such as timber for
products like plywood.
Rusila sees kenaf as a big
market. “Even before planting yields
are maximised, many people from
•

NON-WOVEN (4–100 mm)
DRY LAID/PRESSING
+additives, +biopolymers
Automotive interior parts
BLENDS/PULVERISE (4–100 mm)
WITH THERMO-SETTING PLASTICS
Bulk moulding compounds/resin transfer moulding
Pultrusion
Moulded articles
Automotive parts
(bumpers, spoilers, body parts
BLENDS/PULVERISE (5–25 mm)
WITH THERMO-PLASTICS
Moulded articles
Furniture
Fibre board
Moulding
xtrusion uilding materials proles
Moulded parts (furniture, foils
+lmstacking
Granulate
packaging materials
PULPING (1–5 mm)
PAPER MAKING
Paper (tissue, tea bag,
brown paper, medium
Yarns
NON-WOVEN (4–100 mm)
WET LAID/BONDING
paper, currency notes
PULVERISATION (

Beginnings of a sunrise industry
It was a fortuitous day for kenaf in Malaysia
and Universiti Putra Malaysia (UPM)
researcher Dr Jalaluddin Harun when, on
September 1st 1999, the latter had the
opportunity to introduce kenaf to the then
Malaysian premier Tun Dr Mahathir Mohamad
at the MALBEX construction exhibition.
Jalaluddin, who was working on biocomposite
materials, was presenting on
the use of kenaf for composite products
when Mahathir stopped at his booth.
Mahathir was supportive of the
efforts and ordered the setting up of the
National Standing Committee on Kenaf
with the Malaysian Agricultural Research
and Development Institute (MARDI)
concentrating on upstream processes such
as cultivation, while UPM focussed on
downstream processing. The committee
developed more products with funding
from the National Economic Action
Council (NEAC).
In 2004, a kenaf fibreboard factory
was established in Pahang under Matsushita
Electric Works Ltd (MEW) and MIECO
Chipboard (which left the partnership in
2007). An industry source says the factory
is now producing 60,000 pieces of board
a month for export to Japan where it is
Kenaf is strong and very light. Yarns can woven
with aramid, also know as Kevlar, to make bullet
proof vests
popular among housing developers for its
light weight, high strength and eco-friendly
characteristics.
The Minister of Plantation Industries
and Commodities at the time, Datuk Seri
Peter Chin Fah Kui, was convinced that
kenaf is a crop that Malaysia can promote.
The Malaysia Tobacco Board was replaced
with the National Kenaf and Tobacco
Board in April 2010 and kenaf promoted
as an alternative crop to tobacco. Commercial
scale kenaf plantations total only
around 1,000 ha today. However, there are
plans for the states of Kelantan, Terengganu
and Pahang to cultivate something
like 10,000 ha of kenaf under the Eastern
Corridor Economic Region (ECER) programme.
Now seconded to the Malaysian
Timber Industry Board (MTIB) as director
general, Jalaluddin was instrumental in
convincing MEW – the Japanese electrical
giant which owns the Panasonic brand – to
set up their kenaf manufacturing facility
in Malaysia. They are now operating in
Kuantan as Panasonic Electric Works
Kenaf (Malaysia) Sdn Bhd (PEWKM). “At
the time, MEW was working on a pilot
plant in China to produce composite
boards using kenaf. They wanted to do
this commercially and were looking to set
up a plant in Southeast Asia.”
Malaysian Kenaf Entrepreneurs Association
president Rusila Kamarulzaman
adds, “The Malaysian government aims to
promote kenaf as the nation’s third commodity
after palm oil and rubber. If things
are in place, this is achievable. Furthermore,
many more kenaf products can be
manufactured compared to what palm oil
can produce – from building materials to
aerospace to carbon, the application is
really very wide.”
Everise Crimson setting the stage to export
In 2008, Everise Crimson Sdn Bhd
(Everise) collaborated with the state of
Kelantan on an integrated kenaf polymer
composite project. A factory was built
by the state and is today operated by
Everise to produce wall panels and floor
decking. Wall panels contain 35% kenaf
while floor decking has 65% kenaf
content.
This two-year-old company
received a 10-year tax incentive under
Malaysia’s Eastern Corridor Economic
Region (ECER) initiative. They engage
farmers to plant the kenaf, and process it
at their factory which employs about 20
locals.
The processed kenaf is turned
into pellets for the production of kenaf
polymer composites. Products made
from these composites do not need to be
painted as pigments are added during the
blending process according to customer
specifications which explains why the
pellets come in a variety of colours.
Surface coating is also not required.
Everise signed a memorandum
of understanding with the Malaysian
Agricultural Research and Development
Institute (MARDI), which conducted
initial research on kenaf and a pilot
programme to produce kenaf polymer
composite. Already selling kenaf
composite wall panels, Everise has a
Above left: Everise Crimson’s pellets are used to make kenaf polymer composites in a choice
of colours. They don’t have to be painted as pigments are added during the blending process.
Above right: Sample kenaf floor decking used for poolside outdoors, and even farm enclosures
few agents distributing their products.
Several resorts, budget hotels and homes
in Kelantan are using their products for
interior decoration.
Market response has been good
and the company is now concluding
a contract to supply a prospective
customer with flooring for a goat barn.
“Wood composites have been in the
market for quite a while – for example,
composite decks made of saw dust and
rice husk. We wanted to promote kenaf
so we tried it and it’s workable,” says
managing director Rusila Kamarulzaman.
Everise Crimson is also looking at
producing a more value added structural
building material out of kenaf. To this
end, they are collaborating with a local
university to create a composite for
structural use as steel rods or trusses.
A company in Australia has shown
keen interest in their product for the past
two years but Everise is not ready. “We
can’t take orders from overseas clients
yet as we are doing more R&D to ensure
that our products don’t warp during
transportation,” Rusila says.
While already in commercial
production, Everise’s factory is not yet
running at full capacity.
•

opportunities
ASEAN’s biggest eco trade show kicks off
Exhibitors from EU, Taiwan, Japan, South Korea, Singapore, China and Malaysia
Business matching, networking opportunities, conference and ministerial roundtable in the programme
This month, up to 400 exhibitors
from various parts of the world will
showcase their eco-products and
services at Malaysia’s – and ASEAN’s
– biggest trade show dedicated to
<strong>green</strong> technology. More than 80,000
visitors are expected to converge at the
Kuala Lumpur Convention Centre for
the second edition of the International
Greentech & Eco Products Exhibition
buildings cut energy consumption, and
its ultra-efficient dry-transformers.
From the East, the Taiwanese
have two pavilions housing 19
companies, including five dealing in
LED lighting. Among the products
that visitors will view are polli-bricks,
<strong>green</strong>roof and <strong>green</strong>wall products and
eco apparels.
The Japan Pavilion will be
Minister of State, Trade and Industry
S Iswaran.
There will be two sessions, the
first being a closed-door, and for the
other, attendance is by invitation.
The topic for the second session is
“Ministerial Dialogue: Pathway and
Roadmap towards a Low-carbon
Economy – Realising Development
Goals and Tracking Affirmative
Top: Prime Minister Najib (second from left) launching the inaugural event
last year. Third from right is minister Peter Chin.
Below: Japan technology on display
Minister Chin (ninth from left) with his senior officials and 14 event supporters at the sneak preview of IGEM
& Conference (IGEM 2011) from
September 7th-10th, and the
organisers are hoping it will generate
sales leads to surpass last year’s RM1
billion (US$334 million).
The numbers are looking better.
At the inaugural show last year, 277
exhibitors participated, taking up 502
booths. This time around, the organiser
expects 610 booths to be occupied.
Malaysian Minister of Energy, Green
Technology and Water Datuk Seri Peter
Chin Fah Kui expressed satisfaction
over the growth of the event, and the
strong branding of IGEM.
Malaysian companies will again
make their presence felt. But the
European Union (EU), which leads in
<strong>green</strong>tech, will reprise its strong presence,
with some 30 companies housed
in the EU Pavilion, including giants like
Siemens and ABB.
ABB, a power and automation
technology group, will showcase its
vast eco-friendly technology portfolio,
including the i-bus KNX, which helps
represented by 15 companies, followed
by South Korea (13 companies),
Singapore (eight) and China (six).
These were figures given at press
time. The event will be launched by
Malaysian Prime Minister Datuk Seri
Najib Tun Razak, whose administration
is ramping up the <strong>green</strong> economy.
Ministerial roundtable
This year, to bring the event to a new
level, a ministerial roundtable will be
held on September 8th, carrying the
theme “A Prosperous Low Carbon
Future: Leveraging on Green Growth
for a Carbon-Efficient Economy”.
The ministers who have confirmed
attendance are India’s Minister of
New and Renewable Energy Dr
Farooq Abdullah, Algerian Minister
of Energy and Mines Youcef Yousfi,
Energy Minister of Brunei Pehin
Datu Singamanteri Colonel Awang
Mohammad Yasmin Umar, Cambodia’s
Senior Minister of Environment Dr
Mok Mareth and Singapore’s Senior
Actions.” The dialogue will cover how
countries manage climate change
challenges, whether the shift to lowcarbon
and energy-efficiency can drive
business opportunities, and the role
public policies play.
Concurrently, there will be a twoday
conference beginning September
7th, with the theme “Green Business
– The Economy of the Future”. It will
feature business and industry leaders
in panel discussions on how to make
money from <strong>green</strong>. There will a special
address by Dr Rajendra Pachauri, chair
of the Intergovernmental Panel on Climate
Change (IPCC) which, along with
former US vice-president Al Gore, was
awarded the 2007 Nobel Peace Prize.
As was the case last year,
exhibitors can take part in international
business matching. There will also
be one-to-one matching and other
networking opportunities.
IGEM is organised by the Ministry
of Energy, Green Technology and
Water. Visit igem.com.my for details.
•

case studies
India to build world’s largest
solar power plant
Project involves two plants with a combined capacity of 150 MW
Facility in Shivaji Nagar, Dhule, scheduled to be operational end 2012
By Tejas Patel
India, with its population of 1.2 billion,
has projected its installed capacity
for power generation to reach 800,000
MW by 2030, with renewables like
solar playing an increasingly large role.
This explains the recent announcement
of a project to set up the world’s largest
solar power plant in western Indian
at the cost of Rs 1,987 crores (US$441
million). (As of September last year,
the world’s largest PV plant was Sarnia
Photovoltaic Power Plant in Ontario,
Canada, with 80 MW in capacity.)
According to the state government,
the upcoming Indian project,
situated in the Dhule district of Maharashtra,
involves setting up two solar
power plants with a combined capacity
of 150 MW in the Shivaji Nagar area.
The project will be operational by end
of next year.
Chief minister of Maharasthra
Prithviraj Chavan says the state government
will have a 20% equity in
the two projects, and the rest will be
funded by the German governmentowned
KFW Development Bank.
Of the new capacity, 100 MW will
be generated using crystalline silicon
photovoltaics and the rest through thin
film.
The proposed solar plants will be
operated by Maharashtra State Power
Generation Co Ltd (Mahagenco). The
plants will provide power to Maharashtra
State Electricity Distribution
Company (Mahadiscom) at the rates
finalised by the Maharashtra Electricity
Regulatory Commission (MERC).
The plants will also supply power to
the Bombay Electricity Supply and
The gridinteractive
solar
power in India as
of December 2010
was merely 10 MW
Transport Undertaking (BEST).
The project is being executed by
Lanco, which has partnered with Juwi
India Renewable Energies Pvt, the
Indian subsidiary of Germany’s Juwi
Holding and Megha, which has partnered
with Aries Ingeneriay Sistemas
(Spain) and GreenBrilliance Energy
Private (US).
The success of these proposed
solar plants will impact on India’s solar
power mission. The Indian government
has launched a major initiative
named Jawaharlal Nehru National
Solar Mission (also known as National
Solar Mission), to meet India’s growing
energy demand and also promote
<strong>green</strong> sustainable growth. The mission
aims at making India the global leader
in solar energy.
The National Solar Mission, if
successful, will help India attain solar
power equivalent to one-eighth of its
current installed power. It will also
help India limit its heavy reliance on
fossil fuels.
Energy from bumpy rides
Researchers from the State
University of New York have come
up with an award-winning energyharvesting
shock absorber that can
be installed in a vehicle’s suspension
system to absorb the energy from
travelling over bumpy roads.
Professor Lei Zuo and graduate
students Xiudong Tang and Zachary
Brindak from the State University of
New York at Stony Brook came up with
the innovation, which won them the
R&D 100 award from R&D Magazine.
The development joins
regenerative braking and other
techniques that harvest the vast
amount of energy wasted by vehicles.
The researchers have patented
two types of shock absorbers: linear
and rotational. When installed in a
medium-sized car traveling at 102
km/h, the shock absorber can generate
100–400 W of energy under normal
driving conditions, and up to 1,600 W
on rough roads. Trucks, rail cars, and
off-road vehicles get a return of 1–10
kW, depending on road quality.
The harvested energy charges
the battery and reduces the load on
the vehicle’s alternator. This way, the
harvested energy could increase fuel
efficiency by 1–4% in conventional
cars and by 8% in hybrid vehicles.
The electricity-generating
absorbers can be retrofitted into
vehicles without modifications. They
are not yet commercially available, but
the patent is ready for licensing.
In 2009, Massachusetts Institute
of Technology undergraduate students
came up with a shock absorber that
worked on the same principle. They
later formed a company called Levant
Power Corp to develop the product
commercially. Source: Physorg.com
•

case studies
These windmills have
become a tourist
attraction, allowing
enterprising local folk
to sell tourist products
The windmills of Bangui
Project owner NWPDC eyeing new projects in Aparri and Pamplona in Cagayan
Developers get nod for wind farms in Burgos, Pasuquin, Balaoi and Caparispisan
By G Danapal
Facing the wind-lashed Bay of Bangui
in northern Luzon’s Ilocos Norte
Province in the Philippines, towering
windmills rise some 70 metres from
the sand-clad beach. They are hard to
miss, even for those travelling several
kilometers away along the Maharlika
coastal highway between Laong and
Pagudpud.
These 20 windmills, neatly arranged
in an arc across nine barangays,
have been a source of pride
among the rural folk of the coastal
town of Bangui since the tri-blades of
the windmills were set in motion in
2005 to generate renewable energy for
the province.
Officially known as the NorthWind
Bangui Bay Project, these windmills
are also a major tourist attraction
among visitors who stop by for tequila
sunrise or sunset photos. Enterprising
locals sell T-shirts, drinks and snacks
to capitalise on the growing popularity
of the windmills.
The first of its kind in the Philippines
and in South-east Asia, the
Bangui wind farm’s 20 Vestas wind
turbines light up Bangui and supply
more than 40% of the needs of the
Ilocos Norte Electric Cooperative. All
in all, these wind turbines generate
25 MW of electricity to power up an
estimated 108,000 households.
Just a year into operation, the
NorthWind Power Development Corporation
(NWPDC), the Manila-based
company that runs the farm, reported
70 million pesos (US$1.7 million) in
annual savings passed on to consumers
in the form of lower electricity
tariff.
In March this year, public-listed
Ayala Corporation (Ayala Corp) – one
of the most reputable conglomerates
in the Philippines with vast investments
and holdings in the real estate,
manufacturing, automotive, electronics,
telecommunications and financial
sectors, to name a few – acquired
50% of NWPDC for 513 million pesos
(US$12 million) via Michigan Power
Inc, a wholly-owned unit of Ayala,
thus signalling the entry of Ayala Corp
into the renewable energy business,
seen by energy experts as an attractive
investment prospect following the passage
of the Philippine Renewable Energy
Act, which gives fiscal incentives
and priority at the grid to operators of
renewable energy power plants.
“We believe there are opportunities
to make early stage investments
in the renewable energy space, which
may have the potential to grow over
time given the need to develop alternative
sources of energy. In addition to
our wind and solar initiatives, we are
also developing platforms for hydroelectric
power,” says Ayala Corp
president and chief operating officer
Fernando Zobel de Ayala.
Buoyed by the success of the Bangui
wind farm project, which is part
of the Pagudpud wind farm initiative
designed to improve the livelihood of
farmers in the region through efficient
use of renewable energy, NWPDC is
now going for new wind power projects
in Aparri and Pamplona towns in
Cagayan province.
•

In July this year, Ilocos Norte Governor
Imee Marcos – the daughter of
former president Ferdinand Marcos –
announced that in a bid to make Ilocos
Norte, dubbed “Marcos Country”, the
home of renewable energy (RE) in the
country, the provincial government
had given the <strong>green</strong> light to three wind
power developers – Energy Development
Corp (EDC), Energy Logics and
UPC Renewables, an affiliate of the
Italian UPC Group – to build new wind
farms in Burgos, Pasuquin, Balaoi and
Caparispisan this year.
Wind power pioneer NWPDC
does not see the entry of new players
as competition since all energy
produced would be sold to the national
grid through the wholesale electricity
spot market. It is, in fact, glad that its
Bangui project has drawn more “<strong>green</strong>
investors’’ into the clean energy generation
business.
The Bangui project was drawn
up in 1996 through a wind resource
analysis and mapping study conducted
by the National Renewable Energy
Laboratory (NREL). The study concluded
that various areas in the Philippines
are amenable to wind power installation,
including Bangui and Burgos
towns in Ilocos Norte, Batanes and
Babuyan Islands, which are north of
Luzon and the higher interior terrain of
Mindoro, Samar, Leyte, Panay, Negros,
Cebu, Palawan and Eastern Mindanao.
This led to the inception of the wind
farm project in 1999.
Under the build-operate-and-own
scheme, via a US$40 million interestfree
loan from the Danish Development
Agency (DANIDA), Phase I,
comprising 15 wind turbines, was completed
with connectivity to the Ilocos
Norte Electric Cooperative (INEC) grid.
On May 8th, 2005, NorthWind began
delivering power to INEC.
The Bangui wind farm has been
ratified by the NWPDC and the International
Bank for Reconstruction and
Development through the World Bank
Prototype Carbon Fund. It was the first
project in the Philippines to be part
of the Emissions Reduction Purchase
Agreement (ERPA) under the Clean
Development Mechanism and also the
first Philippine company to receive
Carbon Emission Reduction Certificates
(CERs) from the Executive Board
of the United Nations Framework
Convention on Climate Change.
The project cost for Phase I
came up to US$23 million. Phase II,
completed in June 2008 at a cost of
US$23 million, added five more wind
turbines, raising the total capacity
of the project to 33 MW to make
Philippines the largest wind-power
producer in South-east Asia. Phase III,
when completed, will bring the total
construction cost for the Bangui Bay
Project to US$75 million.
Vast opportunities for wind in the Philippines, including typhoon power
According to a study by the US Department
of Energy, the Philippines has a
potential wind energy capacity of 76,000
MW spread over 11,000 sq km. Of the
provinces surveyed, 47 can produce at
least 500 MW and 25 at least 1,000 MW.
A different study by the WWF
Philippines chapter says the country’s
wind energy potential is 7,404 MW in
1,038 surveyed sites. The results show
the potential of the three major islands in
the Philippines:
• 4,900 MW in 686 sites in 28 provinces
in Luzon island, the most preferred
location among investors;
• 2,168 MW in 305 potential wind sites
in the Visayas region where Trans-
Asia Renewable Energy Corp (part of
PHINMA) is investing 6.45 billion pesos
(US$151 million) to build the first wind
farm in San Lorenzo, Guimaras, with an
installed capacity of 54 MW to come
online in 2013;
• 336 MW in 47 potential sites in
Mindanao island, the region with the
least energy generating potential as it
is a known typhoon-free area.
The main drawback to foreign
investors is the constitutional provision
that prevents foreign ownership of
properties in the Philippines; to set up
wind farms, land acquisition is inevitable.
Partnership with local investors
is an option and foreign investors can
explore the possibility of assistance and
guidelines through the National Grid
Corp of the Philippines (NGCP) and the
Wind Energy Development Association
of the Philippines (WEDAP), which is
composed of First Gen Corp’s affiliate
Energy Development Corp; Alternergy
Philippine Holdings Corp; Trans Asia
Oil and Energy Development Corp;
PetroEnergy Resources Corp; UPC
Renewables and NorthWind Power
Development Corp.
Investors must ensure their wind
farms are equipped to handle the 20-
odd typhoons that visit the Philippines
annually.
The Philippines Department of
Energy (DOE), as early as 2007, had
offered rights to the development of 16
sites as wind farms. These sites were:
Carmen and Oslob in Cebu; Bago City and
Fusion of technological
and
natural elegance.
A spectacular
sunset turns the
sky into a blaze
of fiery red and
flaming orange
against the
silhouettes of
towering windmills
rising from
the shrub-clad
beach of the Bay
of Bangui, Ilocos
Norte
Cauayan in Negros Occidental; Allen-
Lavesares and Calbayog City in Northern
Samar; Siquijor; Pasuquin, Ilocos Norte;
Bantay, Ilocos Sur; Bani and Bolinao
in Pangasinan; Maconacon, Isabela;
Tagaytay, Cavite; San Andres, Quezon;
and Mercedes and Daet in Camarines
Norte, all of which are said to have the
potential to produce about 345 MW of
power.
In February this year, the DOE
inked 17 wind energy projects with
investments totalling US$1 billion. They
include Danish wind giant Vestas Wind
Systems Asia-Pacific, which is set to
establish an IT hub in the Philippines and
will assist the government to meet its
target of producing 417 MW wind energy
by 2013.
•

case studies
First dual-certified dedicated
office tower in KL
Awarded BCA Green Mark Gold (Provisional) and GBI (Provisional)
Green features allow up to 25% reduction on energy consumption
By Suvarna Beesetti
Strategically located at the
intersection of Jalan Binjai, Jalan
Ampang and Jalan Tun Razak in Kuala
Lumpur, the 35-storey Menara Binjai
is the first dedicated office tower in
Malaysia to receive both the Singapore
Building and Construction Authority
(BCA) Green Mark Gold Certification
(Provisional) and Malaysia’s Green
Building Index (GBI) Certification
(Provisional).
The office tower is situated on
the site of the former family residence
of the late physician Dr Chua Boon
Teck, whose father was Chua Cheng
Tuan, one of the co-founders of Cycle
& Carriage Co, now known as Cycle
& Carriage Bintang Bhd, the largest
Project details
• Location: J B,
K L
• Owner & Developer: K
J S S B
• Architect: V
A S B
• Civil & Structural
Engineer: W
ůMũ S B
• Mechanical & Electrical
Engineer: R
• Landscape Designer:
V L S
B
• Property Manager: CB
R E
• Completion: E
• Awards: BCA G
M G C
ůPũ
GBI C
ůPũ
The 35-storey office tower will be
situated on the site of a doublestorey
colonial bungalow which
once belonged to the Chua family
dealer in Mercedes-Benz cars in
Malaysia. Dr Chua’s wife, the late Khor
Joo Saik, was a shrewd businesswoman
who acquired substantial plantation
and property plots for the Chua family.
According to Chua Guan Hock,
a descendant of the Chua family and
director of Khor Joo Saik Sdn Bhd,
the landowner and developer of the
dual-certified <strong>green</strong> building, Menara
Binjai has a gross development value
of RM180 million (just under US$60
million) and a total net lettable area of
333,000 sq ft.
The building comprises 29 levels
of office floors with a net lettable
area of 12,000 sq ft to 13,000 sq ft
on each floor, ground and mezzanine
floors, four podium carpark levels
and four basement carpark levels.
Due to be completed by the fourth
quarter of this year, the development
of the office tower complies with
stringent environmental regulations
that include minimising the impact of
its construction on the surrounding
area and adopting low carbon footprint
strategies.
The adoption of key <strong>green</strong>
features throughout the building
along with energy-efficient operations
will result in up to 25% savings on
electricity and air-conditioning. These
features include low-E double-glazed
windows for optimum heat and sound
insulation, energy-saving light fittings
with daylight sensors, as well as waterefficient
sanitary fittings.
Chua points out that incorporating
<strong>green</strong> features into the building
allows the company to be more
“disciplined.” He says: “It made us
more aware of the impact that we
have on the environment, and made
us more conscious of saving water and
reducing wastage of raw materials.”
Other <strong>green</strong> features at Menara
Binjai include an energy-saving flexizone
central air-conditioning system
with individual floor control supported
by state-of-the-art energy-saving
chillers. The system is also equipped
with variable air volume (VAV) boxes
to provide flexible zonal control for as
little as 600 sq ft of space.
The destination-based lift system
provides additional security by
allowing customised floor selection to
(continued on page 38)
•

3 rd INTERNATIONAL CONFERENCE ON
presents 3 rd International Conference on
World Class Sustainable Cities 2011 (WCSC 2011)
SYNOPSIS
The 3rd series of the ‘International Conference on World Class Sustainable Cities’ (WCSC) event is themed ‘Transforming Cities:
From Vision to Implementation’. Global challenges and the ensuing economic competitiveness, as well as issues of climate
change, has forced cities to re-think their growth strategies. City Transformation has been a successful growth strategy in many
cities in order to not just provide settlements to live, work and play, but also the twin challenge of mitigating climate change.
WCSC is designed to showcase some of the best and successful practices and experiences from World Class Cities, as well as
the efforts made within our own nation by way of promoting a constructive platform to educate and change the mindsets of
city stakeholders, industry players, Government, RA’s, NGO’s and the public on key challenges faced in transforming our cities
into sustainable human settlements that meets the needs of the present and enhancing that of the future.
CONFIRMED SPEAKERS & PANELISTS *
(a) The Honorable Madam Chen Chu, Mayor of Kaohsiung City, Taiwan
(b) Mr Sebastian Moffat, President & Chief Executive Officer, The Consensus Institute, Canada
(c) Representative from the City of Vancouver, Canada
(d) Y Bhg Tan Sri Ahmad Fuad bin Ismail, Mayor of Kuala Lumpur
(e) Ms Renuka Indrarajah, Director of Management Committee, GAB Foundation
(f) Representative from the Greater KL/Klang Valley River of Life International Master Planning Competition Winner
(g) Representative from REHDA Wilayah Persekutuan (Kuala Lumpur) Branch
(h) Representative from the Malaysian Institute of Planners (MIP)
(i) Representative from the Malaysian Institute of Architects (PAM)
* Subject to changes
Registration Fee
RM600 (MIP / PAM / REHDA / Government)
RM250 (Students)
RM700 (Public)
Brochure & Registration Form
www.rehda.com
For futher info, please contact
03-7880 8000
Jointly Organized by Endorsed and Supported by Platinum Sponsor Gold Sponsors
Wilayah Persekutuan
(K.L.) Branch
Kuala Lumpur
City Hall
Corporate Partners

A sky garden and a boutique gym on Level 30 provide an oasis for rejuvenation or even an informal venue for meetings
minimise waiting and stopping times,
resulting in shorter travel times and
excellent handling capacity at peak
hours. The former is supported by
Kone Ecodisc drive motors that not
only maximise lift efficiency but also
regenerate electricity during operations
through its counterweight and
braking system. This will translate into
a 30% savings on the total electricity
used for lifts.
The sky garden and a boutique
gym on Level 30 of the building provide
an oasis for rejuvenation or even
an informal venue for meetings. Another
unique feature is the triple volume
bamboo garden terraces on every third
floor to simulate the feel of nature, with
a magnificent <strong>green</strong> panorama.
The lobby will feature mahogany
wood panels and furniture created
from the salvaged remains of an ancient
tree that once sheltered the 6,000
sq ft double-storey colonial bungalow,
which was the Chua’s family home.
These destination-based lifts allow customised
floor selection to minimise waiting and stopping
times (above). Mahogany wood panels in the lobby
will be created from the salvaged remains of an
ancient tree that once sheltered the Chua family
residence (below)
As a development built to CON-
QUAS (Construction Quality Assessment
System) and QLASSIC (Quality
Assessment System in Construction)
standards, Menara Binjai also boasts
penthouse offices on its three top levels
which have programmable express
lifts, exclusive washrooms with showers,
and superb unobstructed views of
the Kuala Lumpur cityscape.
Menara Binjai will be
professionally managed as a singleowner
office tower and is awaiting
Multimedia Super Corridor-status
accreditation. Targetting tenants from
the oil and gas, financial, services and
trading sectors, the tower will feature
a centrally-located data centre on the
fifth floor to save its tenants the cost
and hassle of setting up their own
server rooms. With no immediate plans
to sell the building, the developer of
Menara Binjai is offering a competitive
rate of RM7.50 per sq ft for their
would-be tenants.
•

people
Expanding ecomaginatively in South-east Asia
GE Malaysia’s market development director Azli Mohamed is gearing up for busy days. As the international technology,
services and finance giant prepares to grow its revenues in South-east Asia by about 30% this year and invest at
least US$1 billion in the region over the next three years, Azli tells Siaw Mei Li how the company is demonstrating to
governments and industries that eco-business is good not only for the planet but also for the sustainable growth of
local economies.
It comes as no surprise that the one
word constantly on the lips of GE
Malaysia’s Azli Mohamed is “ecomagination”,
a key initiative of the US
multinational corporation that provides
ecologically-responsible industrial
solutions.
“When ecomagination was started
globally over five years ago, mooted
by our CEO and chairman Jeff Immelt
and carried out with a significant
investment, GE was among the first
companies to take such an effort at a
serious level and many on the board of
directors were not in agreement about
it. For one thing, it was common to link
<strong>green</strong> efforts to <strong>green</strong>washing at that
point in time.
“But ecomagination has two bottom
lines – to address climate change
issues and at the same time, be instrumental
to increasing the company’s
revenue and long-term growth. We
want to make money but we want to be
<strong>green</strong> as well, and not at a cost to the
business.”
This strategy seems to have
worked. Since 2005, the company has
increased its ecomagination portfolio
from 17 products to over a hundred
today, ranging from aircraft engines
to washing machines. About US$5
billion has been invested in clean tech
since the start of the programme, and
it appears to have paid off handsomely.
Azli says in 2010, the company closed
US$18 billion in ecomagination sales.
Last year, the company set an ambitious
new goal of growing eco revenues
at twice the rate of total company
revenue in the next five years.
To be sure, GE’s <strong>green</strong> technology
is about building value for customers.
At the 2011 Paris Air Show, AirAsia
Bhd, Asia’s biggest low-cost carrier,
placed the largest single firm aircraft
order in aviation history with its
order for 200 Airbus A320neo aircraft
powered by the new LEAP-X engine,
GE Malaysia market development director, Azli Mohamed
a product of CFM International, a
joint venture between GE Aviation and
Snecma of Safran Group. Azli estimates
that with LEAP-X’s 15% fuelefficiency
improvement over current
CFM engines of its class, AirAsia can
expect each new aircraft to save US$12
million on fuel cost over a 15-year
ownership horizon, assuming a jet fuel
price of US$2.50 per gallon.
Azli also shared on how GE has
been engaging country and industry
partners in the region:
On South-east Asia and the
Middle East
Indonesia: This country has by far the
largest geothermal resource in the
world. GE Energy Financial Services
provided a US$50 million loan to Indonesia’s
biggest geothermal producer,
the 220 MW Wayang Windu project.
Singapore: Since 2009, GE and
the National University of Singapore
(NUS) have jointly invested S$130
• Started career in investment
banking and has dealt in
mergers and acquisitions
over the past 11 years prior
to joining GE in August 2010
• Has lived in the Middle
East for five years
• Hails from Teluk Bahang,
Penang in northern Malaysia
and is a fan of the “mamak”
soup on Penang Road
• Plays percussion, the guitar
and keyboard, and a few
traditional instruments. Has
performed at the Dubai Jazz
Festival and, prior to that, in
the Kuala Lumpur jazz scene
• An avid photographer who’s
had a couple of his photos
purchased by KLM, Azli is now
most frequently seen wielding
the camera “at relatives’
weddings – pro bono!”
•

million (over US$100 million) in the
NUS-GE Singapore Water Technology
Centre, where researchers develop
solutions for low-energy water desalination,
reclamation and reuse. GE is
also currently exploring EV tests with
a utility body on EV charging solutions
and smart grid applications.
Thailand: GE Energy plans to
introduce its cadmium telluride (CdTe)
thin-film photovoltaic technology in
the Thai solar energy market within
the next two years. The technology is
the most efficient of its kind and could
soon be generating energy at less than
US$1 per watt.
Vietnam: A wind turbine-generator
manufacturing facility, a US$61
million investment by GE Energy, was
opened in Haiphong to produce generators
for 1.5 MW wind turbines.
Abu Dhabi: GE teamed up with
Mubadala back in 2008 to work across
renewables, R&D, finance, power
and aviation. Its sixth global research
centre, and the first to be branded an
ecomagination centre, will be based in
Masdar City – the upcoming sustainable
planned city and cleantech cluster
of the region.
Malaysia: The two main areas we
look at are palm oil mills and landfill
gas. We have one of the most efficient
gas engines in the world from GE Jenbacher,
a company we acquired seven
or eight years ago out of Austria. We’re
talking to major agriculture players
and approaching sewerage companies
for opportunities on the biogas front.
Felda, for example, has over 70 mills
releasing harmful methane gas that’s
best captured to produce energy that
can be fed to the grid. While we do
have the most important thing, which
is the gas engine, we’re working with
a third-party consultant to provide a
holistic value proposition incorporating
the capture technology and addressing
other technicalities.
On the MOU we’ve signed with
NAZA Group, particularly on the EV
front, we will work together on building
awareness and the EV infrastructure
framework for Malaysia. We’re
aware of the Ministry of Energy, Green
Technology and Water’s pilot programme
with Proton; we would like
to create a complementary strategy,
drawing on our EV experience in the
United States where we work with [EV
infrastructure support provider] Better
Place to engage stakeholders across
the board – from the utilities, OEMs,
automotive players, even the small
companies interested in installing the
charging device, to municipal governments
in every state – to build a more
robust regulatory structure and help
stakeholders better support each other.
We hope that GE’s fast-charging Watt-
Station EV charger will also support a
possible EV trial involving commercial
vehicles or public transportation in
Putrajaya or Cyberjaya.
Through our MOU with Formula
1’s Team Lotus via 1Malaysia Racing
Team (headed by Tony Fernandes and
Kamaruddin Meranun of Tune Group
and SM Nasarudin of Naza Group),
Team Lotus’ cooperation with GE on
R&D initiatives will ride on GE’s global
research centres and corresponding
efforts in three key areas of technology:
improving fuel-efficiency and
emission levels in hydrocarbonbased
vehicles; exploring the
market for lightweight EVs, possibly
by translating GE’s experience
with composite materials
and batteries into the automotive
industry; and developing infrastructure
to support and facilitate the development
of EVs in ASEAN countries.
GE’s WattStation electric vehicle (EV) charger
is designed to significantly decrease EV charging
time from 12–18 hours to as little as 4–8 hours.
Its smart grid-enabled technology could also help
utility companies manage the impact of EVs on the
local and regional grids
constraints. GE’s company-to-country
strategy pools resources across different
businesses to come up with
solutions that support the countries’
development. However, the company’s
ability to effectively penetrate the
market also depends on the country’s
regulatory environment.
In Thailand, the industry structure
evolves every time there is a change
of government, but the country has
tremendous potential, especially in
renewables, and we’ve done quite a lot
on the <strong>green</strong> front with very good biogas
projects on agricultural waste and
landfill gas. In Indonesia, we’ve placed
ourselves in industries there where
we are better off and covered, and
can work as a technology provider in
energy, power, transportation, locomotive,
and oil and gas.
We’ve earmarked Indonesia,
Thailand and Vietnam as key markets
for growth, but past challenges have
taught us to tread carefully. GE is a
very straightforward company. Everything
is black and white and we’ve
positioned ourselves as a company
of utmost integrity. There are things
we can work with and things we still
choose to stay away from.
The CFM LEAP-X aircraft engine provides
significant reductions in fuel burn, noise,
and NOx emissions compared to the
current CFM engine model of the same
class. LEAP engines are a product of CFM
International (CFM), a 50/50 joint company
between Snecma (Safran group) and GE
On the Asian business environment
When you deal with countries in Asia,
the biggest stumbling block is in
understanding the regulatory structure
and how we can work within the
GE is a participating exhibitor at the IGEM
2011 Exhibition & Conference Malaysia
taking place in Kuala Lumpur this month.
President of GE Asia Pacific Stuart Dean is
a panelist at the conference.
•

people
Singapore’s <strong>green</strong> innovator of the year
Technical director of Samwoh Corporation Dr Ho Nyok Yong is Singapore Building & Construction
Authority (BCA) Green Innovator of the Year for 2011. He tells Suvarna Beesetti in an email interview
about his work and achievements in sustainable construction.
Growing up in a village in Ipoh,
Malaysia, surrounded by abundant
<strong>green</strong>ery Dr Ho Nyok Yong learnt to
love nature. However, as his village
embraced urbanisation, large tracts
of forests were sacrificed for new
townships. Trees were felled and hills
flattened. Having witnessed such
destruction, Ho was driven to do
something meaningful to conserve the
environment.
The technical director of
Samwoh Corporation, an integrated
construction and sustainable recycling
company did his doctorate research
on the efficient use of industrial waste
for structural applications. Since then,
he has not looked back, and has been
involved in R&D work on material
science, recycling of waste materials
and industrial by-products, <strong>green</strong>
building and sustainable construction,
and <strong>green</strong> asphalt pavement
engineering.
Ho has authored over 50 technical
papers, and has spoken at conferences
and seminars all over the world. He
has received a number of awards, the
latest being the BCA Green Innovator
of the Year 2011 award, in recognition
of his contribution to the industry.
How do you feel about being named
the BCA Green Innovator of the Year
and how has this changed your life?
It is a great honour to me, my research
team as well as my company. It will
definitely motivate us to be more
involved in <strong>green</strong> work. I have been
involved in R&D work on sustainable
technologies for more than 20 years,
and I do not think I will ever stop
campaigning for the <strong>green</strong> cause.
Do you think that more businessmen
should follow in your footsteps?
My passion is to convert waste into
useful material as well as to formulate
new <strong>green</strong> products and technologies
that can benefit the industry. It is my
• Born in Ipoh, Malaysia
• A registered professional
engineer of Singapore and
Malaysia, and a Chartered
Engineer of UK
• President of the Singapore
Contractors Association Limited
• Chairman of Recycled Material
taskforce at Singapore
Green Building Council
• Past president of the
Singapore Concrete Institute
hope that my <strong>green</strong> R&D work will
also inspire everyone, especially the
younger generation, to think <strong>green</strong>.
Both my company and I strongly
believe that going <strong>green</strong> should not be
symbolic. It should be the aspiration
of all socially responsible business
corporations. We share our knowledge
and experience by opening up our R&D
centre to schools, higher institutions
and the public via educational
tours to raise awareness on
environmental issues.
We hope that the
inspirational stories on how we
came to embark on <strong>green</strong> R&D
work will encourage everyone
to make a commitment to be
<strong>green</strong> in their schools, their
communities, their homes and
their personal lives.
It is heartening to receive
feedback, often from young
people, after the tour that they
learnt a lot on <strong>green</strong> activities,
and were inspired and
motivated by our efforts.
What is your personal contribution
to the environment in
your daily life?
I am active in <strong>green</strong> activities
organised by the BCA, National
Environment Agency
(NEA), Land Transport
Authority (LTA), Civil Aviation
Authority of Singapore (CAAS),
Singapore Environment Council
(SEC) and Singapore Green Building
Council (SGBC).
I have also initiated a number of
research partnerships with tertiary
institutions as well as local authorities
on <strong>green</strong> technologies and the efficient
use of waste materials for construction.
Most of the research work has
received the authorities’ approval. I am
currently president of the Singapore
Contractors Association Limited
(SCAL) and chairman of the Recycled
Materials taskforce at SGBC. These
roles enable me to guide and advise on
sustainable construction.
What is your personal philosophy on
<strong>green</strong> technology?
I believe in a pragmatic approach to
R&D. In my more than 20 years of
experience in the fields of civil and
environment engineering, I have
always been inspired and driven by
•

A building almost
entirely constructed
from recycled concrete
aggregate (RCA)
The Samwoh Eco-Green Building, Ho’s pride and joy, is the first building in the region to use concrete with
up to 100% RCA and was awarded the BCA Green Mark Platinum Award
the need to recycle waste materials as
there is a lack of natural materials in
Singapore for construction.
Most industrial wastes can be
turned into reusable materials through
R&D. They can substitute natural
materials as well as alleviate waste
disposal problems. This is in line with
the government’s call for the 3Rs (i.e.
reduce, recycle and reuse).
The continuous development
and invention of new <strong>green</strong> products
by our team, which strongly
emphasises practicality, efficiency
and environmental protection, will
complement the government’s efforts
to meet the target of <strong>green</strong>ing 80% of
all buildings by 2030. This will then
make Singapore a truly sustainable
built environment.
What is the biggest challenge for
developers to adopt sustainable construction
and concrete technology?
How can they overcome it?
It is common public perception that
recycled materials are a poor substitute
for natural materials. Another
challenge is the initial cost of adopting
<strong>green</strong> technology.
I believe education plays a big
part in changing this perception. The
government also plays a major role in
the adoption rate of <strong>green</strong> technology.
By supporting <strong>green</strong> initiatives, it can
encourage developers to work towards
sustainable construction.
“I envision a future
where nothing will go to
waste. More developers
will embrace the idea
of sustainable construction.”
What is your most successful <strong>green</strong>
technology project to date?
I would say my proudest achievement
was to lead a dedicated research team
comprising researchers from Samwoh,
BCA and Nanyang Technological
University (NTU) in the study and
application of recycled concrete
aggregate (RCA) for structural concrete
applications.
Our extensive research led to the
construction of the Samwoh Eco-
Green Building, the first building in
the region to use concrete with up to
100% RCA. The building represents
the biggest leap of faith that any
building owner has taken with regard
to the use of recycled materials and
it was awarded the BCA Green Mark
Platinum Award.
The building was officially opened
on March 22nd last year by then
Senior Minister of State for National
Development and Education, Grace Fu.
The building has received much media
publicity and attracted over 3,000
visitors from Singapore and around the
world. During such visits, I shared my
Some 2 million tonnes of construction
and demolition (C&D) waste is
produced every year in Singapore. As
land is limited on the island state, the
disposal of C&D waste is a problem.
On top of this, Singapore lacks natural
construction aggregates.
As a solution, Samwoh Corp set
up plants to process the C&D wastes,
which contain mainly aggregate and
cementitious materials, into recycled
concrete aggregate (RCA) for road
construction, civil engineering precast
concrete components, and more
successfully, the construction of the
Samwoh Eco-Green building (picture
on left).
Officially opened last year, the
three-storey building has attracted
the interest of industry players as it is
the first in the region to be built with
concrete that contains up to 100%
RCA.
The building serves as a research
project to evaluate the use of RCA
in structures and its incorporation
in building standards. To monitor
performance, fibre-optic sensors are
embedded in the support columns.
Acording to the developer, the
replacement of natural aggregate with
RCA did not increase nor decrease the
construction cost of the building. The
costs are comparable.
Apart from the use of sustainable
construction materials, the building
was also designed with <strong>green</strong>
features like low-energy lighting,
water-efficient fittings, and recycled
materials for interior fittings.
experience and knowledge on <strong>green</strong>
technologies and initiatives, and this
has helped to promote the use of <strong>green</strong>
materials in construction.
What do you think is the future of
<strong>green</strong> technology in the next ten or
even fifty years?
I envision a future where nothing will
go to waste. I believe more developers
are embracing the idea of sustainable
construction. Consumers are also
becoming more educated about
sustainable development. With this
increasing focus on the environment, I
foresee a Singapore that is going to be
even <strong>green</strong>er.
•

people
Managing agro-wastes with micro-organisms
Dr Suhaimi Masduki, chief executive officer of award-winning bioremediation company BioFusion Sdn Bhd, talks
to Jay Roshen about waste management, creating businesses from biotechnology and the environment, his take
on the Malaysian R&D scene, and on BioFusion’s award from SMIDEX and the Malaysian Ministry of International
Trade and Industry.
Getting the microbes to do the dirty
is what BioFusion Sdn Bhd is good at.
The Malaysian home-grown company
has created its own techniques to
bioremediate soil and agricultural
wastes by using micro-organisms. On
June 7th, it won an award for “Best
Innovation in Biotechnology and Agro
Technology” at the 2011 Malaysian
SME Innovation Awards. The honour
came with RM200,000 (US$67,000)
cash. BioFusion’s paid up capital is
about RM500,000. Its current market
value is about RM15 million.
Tell us a little about BioFusion
We were established in 2008 to embark
on activities related to bioremediation.
What we do is treat and, above all,
manage waste, particularly from
agriculture. We do soil and water
remediation too.
What is the salient innovation in the
technology you use? How different
is your technology from others in the
same industry?
Bioremediation involves the
development of biocatalysts – that is,
the effective use of micro-organisms
or EM. Our EM is developed based
on clients’ requests; this way, the EM
works better as it is focused on the
required target process. We develop
EM for composts; we develop EM for
biofertilisers in the case of nitrogen
fixers. The development of these
micro-organisms follows ecological
principles. We do not modify the
micro-organisms genetically; we only
enrich them and nurture them to
grow well in the intended modified
environment during bioremediation.
As they are developed ecologically,
propagation is made easier and they
can be co-cultured, thus reducing the
cost of production.
Is it a home-grown, self-innovated
technology?
Suhaimi Masduki
Yes, it is our own home-based
technology. No one else has done
this. But our innovation does not end
here because innovation does not deal
with technology alone. Innovation
involves activities that facilitate the
flow of business. Anything that creates
interest in business is also innovation.
This becomes one of our business
development strategies. Our marketing
approach is to create awareness among
our clients and we assure them we will
stick with them until they succeed. Our
philosophy is “Our clients’ success is
our business”. Our technology is 100%
home grown; we are proud of this.
Malaysia has abundant agricultural
waste. Do you feel these wastes could
be treated and turned into valueadded
products?
Agricultural wastes will be one of our
renewable resources. All wastes can be
treated and managed. The best option
is to reduce waste as that ultimately
reduces the cost of management,
treatment and finally disposal, if it has
to be disposed.
What kind of waste is the most
difficult to deal with?
It is those that are generated in small
amounts in scattered areas. These
wastes are hard to manage.
“We look forward to
working, or creating
businesses together with
our clients, or any other
entities. Biotechnology
is all encompassing;
no single technology
component will achieve
its target on its own.“
BioFusion won the recent SME
Innovation Awards. How do you feel
about winning in the biotech and
agricultural category?
I am very happy of course. We had the
opportunity to explain to the public
about our business and our direction.
The response was really good.
What are your plans for the
RM200,000 you won?
Some will be put aside as incentives
for staff who have worked really hard,
especially in our early struggles, and
some will be used to buy the critical
equipment that we need.
What would you tell young
bioentrepreneurs?
I am in fact a “new-old” entrepreneur.
I think I missed much of the real
business world. Nonetheless, what I
experienced in the public sector was a
blessing as I gained extra knowledge
and am able to put something together
through BioFusion.
To young entrepreneurs, I have
just a few words: “Have an ambition
and work hard at it”. If anyone is
interested in the environment business,
look at the big picture, look at the
gullies, the valleys, the water systems,
et cetera and decide how to make the
situation better.
•

How do you see the Malaysian biotech
landscape in the next 10 years?
Biotechnology has a great future in
Malaysia. We have to fall back on our
resources, particularly renewable
ones. Biologists, engineers, chemists,
have to work together to develop
meaningful biotechnological products.
We look forward to working or creating
businesses together with our clients,
or any other entities. Biotechnology is
all encompassing; no single technology
component will achieve its target on
its own.
What can we do to further to improve
this sector?
Working together and integrating the
various technology components is the
crux of the matter. In Malaysia, we
have the tendency to isolate ourselves
when developing biotech products. As
a result, we fail to achieve the desired
target, or it takes a long time. To
improve the biotech sector, we need
Agro-wastes: Biologists, engineers, chemists,
have to work together to develop meaningful
biotechnological products
to take two drastic steps: the first is to
focus on what needs to be done, and
the second is to create a meaningful
team comprising relevant expertise to
complete the job. To me, a molecular
biologist is just a component in the
development of a biotechnological
product.
Tell us a little about yourself?
I completed my first degree on
Agricultural Engineering in 1975,
but was never satisfied with it. I
thought it did not give me the true
picture of what was happening in
the environment. While working
at the Malaysian Agricultural
Research and Development Institute
(Mardi), I did my Master’s degree
at the Universiti Malaya Chemical
Engineering department. This time
around, I studied microbial kinetics,
hoping to understand microbiology
better. Subsequently, I pursued my
PhD in microbial ecology in Belgium.
I did deeper research on microbial
interactions and environment; this
included waste and waste-water
management, environmental hygiene
and biotechnological processes in
environmental technology. I continued
dwelling on my interest in Mardi until
I retired in 2008. I was also involved
in the National Committee on Clean
Development Mechanisms and in
some other committees related to the
environment.
2nd Annual
GREEN
Asia
Optimising Green Water & Waste Management for Sustainable Future
GTOWER HOTEL, KUALA LUMPUR - SEPTEMBER 26 & 27, 2011
http://www.comfori.com/<strong>green</strong>tech
For more information, contact Huey Ying at hueyying.leong@comfori.com or (603) 5621 3630
*Green Purchasing Asia subscribers are eligible for 5% discount on conference fees.
•

editorial
-
The many faces of
biodegradability
Showing biodegradation within a timeframe and extrapolating the data is unscientific
Biodegradation of compounds containing complex chemicals can complicate matters
Dr Prasad Modak is
chairman of the Green
Purchasing Network of
India. He can be reached at
pmodak@vsnl.com
By Prasad Modak
The claim of biodegradability is often
associated with environmentallyfriendly
products, but I often wonder
what exactly this means?
The US Environmental Protection
Agency (EPA) defines as biodegradable
those materials which can
decompose under natural conditions.
The American Society for Testing
and Materials (ASTM), a leader in
setting international standards, states
that biodegradation is brought about
by a biological activity, particularly
enzymatic action, which can lead to
chemical structural changes. The Federal
Trade Commission (FTC), another
US government agency, has drawn up
guidelines on what legitimately qualifies
as biodegradable materials.
Examples of biodegradable materials
include fruits, vegetables, leaves,
paper and seeds. Non-biodegradable
materials, on the other hand, do not
break down easily. These materials
pose a threat to the surroundings since
they simply pile up and take a long
time to degrade. Materials that you see
in landfills mostly comprise non-biodegradable
materials such as plastics.
Certifying biodegradability –
can we trust?
Going by the definitions listed above,
most products are fundamentally biodegradable;
the only difference being
the amount of time it takes to break
each one down. Depending on the
time, biodegradation may be partial or
total.
In the test recommended by
the European Union (EU), a 10-day
window is used to define ready biodegradability.
Within this time, a readily
biodegradable substance must reach
at least 60% mineralisation based on
CO ² production or O ² depletion, or
70% based on reduction in chemical
oxygen demand (COD). The 10-day
Some plastics biodegrade for awhile and then stop
tion process plateaued after 60 days
and the second showed no degradation
at all after 45 days. The company then
did a 30-day test and extrapolated that
the material will biodegrade in four
years. This could be misleading.
Another example is found in the
August 2010 issue of Biocycle Magazine.
It published a study initiated by
the Environmental Services Department
and performed at the Miramar
Greenery Composting Facility. Here
105 different compostable products
were evaluated. The majority of the
products selected meet ASTM standards
(either ASTM D6400 or D6868).
All of the products tested were purchased
in the market. However, more
than half of the 105 products did not
window begins when biodegradation
has reached 10% and must end within
the 28-day test.
Many manufacturers show some
biodegradation taking place for an x-
period of time and then use the data to
extrapolate. But you cannot extrapolate
the biological degradation process as
that is scientifically unsound.
The Biodegradable Plastic Institute
(BPI) in the US conducted two
separate sets of tests on the Aquamantra
water bottle sold by Dana Point, a
California-based company which uses
an additive from Enso Bottles LLC.
The first test showed that the degradabiodegrade
greater than 25%. Fifteen
items that were both ASTM and BPI
certified showed almost no effects of
biodegradation.
Independently assessed and disclosed
biodegradation data is thus essential
to assess the fate and behaviour
of substances in the environment.
Biodegradable products: Are they
always benign?
Take the case of active cleaning chemical
nonylphenol ethoxylate (NPE),
which is made of carbon, hydrogen
and oxygen. NPEs do biodegrade to
a benzene ring type and other simpler
structures. However, this class
of chemicals is considered suspicious
because NPE can be possible endocrine
disruptors. This means NPE may
mimic endocrine hormones and cause
havoc with a woman’s reproductive
system. So although biodegradable,
NPE is by no means environmentallyfriendly.
End products of biodegradation: Are
they always safe?
It gets more complicated when we
think about products that contain
complex chemicals. Pesticides such as
DDT are hazardous and toxic in their
own right and take a long time to biodegrade.
More than their slow breakdown,
the problem is that the breakdown
products are even more toxic
and dangerous than the original DDT.
So biodegradation of such compounds
can in fact complicate matters!
While biodegradability is something
we all should desire in <strong>green</strong>
products, we must understand its
limitations, especially the “fuzziness
around its hallow”. Until such time that
we come up with a better operating
and communicable definition, biodegradability
is like Hamlet asking – “To
be or not to be!”
•

editorial
More push for Taiwan’s <strong>green</strong>
building material industry
As of May, 474 <strong>green</strong> building material labels have been awarded
Green buildings account for about 10% of all new buildings last year
Dr Ning Yu is president
of the Environment and
Development Foundation
and chairman of Taiwan
Green Purchasing Alliance.
By Ning Yu
Taiwan’s <strong>green</strong> building material
labelling programme was developed
based on the Green Building Promotion
Plan approved by the Executive
Yuan (the government’s executive arm)
in 2001, and officially started accepting
applications for label use in 2004.
Currently, the programme divides
<strong>green</strong> building materials into
four categories: ecological, healthy,
recycling and high performance. Of
these, the first two place emphasis on
functionality while the rest focus on
environmental friendliness. Through
this programme, Taiwan’s domestic
building material industry is provided
with an independent and comprehensive
system to assess and review the
environmental performance and characteristics
of building materials.
In 2009, the Ministry of the Interior
stipulated that interior decoration
materials counted as <strong>green</strong> building
materials be raised to 30% from
5%, with the goal of reaching 100%
in future. This was done to reduce
resource consumption in the production
of building materials, promote
the upgrade and transformation of the
traditional building material industry,
phase out use of poor quality building
materials and enhance the built
environment for the health and comfort
of occupants.
Statistics published by the Taiwan
Architecture & Building Centre, which
manages the labeling programme,
show that as of May 2011, a total of
474 <strong>green</strong> building material labels
had been awarded, with 120 of them
awarded last year. The number of
labels issued has risen in recent years,
indicating the awareness of builders,
and that <strong>green</strong> building materials are
abundantly available.
Data provided by the Statistics Department
of the Ministry of Economic
Affairs (MOEA) also show the total
output of Taiwan’s building material
industry last year was about NT$768.6
billion (US$26.5 billion), with <strong>green</strong>
materials accounting for NT$61.5
billion. Green buildings account for
about 10% of all new buildings last
year. MOEA also estimated that the
value of <strong>green</strong> building materials may
increase to NT$69.4 billion in 2015. To
Taiwan’s iconic <strong>green</strong> building: Taipei 101’s LEED-
EBOM Platinum Level has set three records – tallest
<strong>green</strong> building, largest <strong>green</strong> building (about
150,000 sq m), most-user <strong>green</strong> building (with
about 90 tenants)
cope with this trend, it is necessary to
promote <strong>green</strong> building materials, to
enhance their manufacturers’ economies
of scale and competitiveness, to
establish a customised <strong>green</strong> building
rating system and to create a robust
domestic market.
Due to its role in environmental
and ecological protection, the <strong>green</strong>
building material label is a crucial element
of Taiwan’s <strong>green</strong> building promotion
policy. In 1999, the government
developed the <strong>green</strong> building EEWH
evaluation system exclusively for the
subtropical climate to serve as a basis
for the <strong>green</strong> building material labeling
programme. In this system, “EEWH”
stands for “ecological”, “energy-saving”,
“waste-reduction” and “healthy”,
the four indicators of the <strong>green</strong> building
promotion plan. Two years later,
the <strong>green</strong> building promotion plan was
adopted as a <strong>green</strong> building assessment
system for the subtropical and
tropical climate in Taiwan.
The <strong>green</strong> building label and the
<strong>green</strong> building material label are two
different but related schemes, as each
category of <strong>green</strong> building materials
correspond to one to three indicators
of <strong>green</strong> buildings.
When applying for a <strong>green</strong> building
material label, a product in any
of the four categories needs to meet
the common criteria, in addition to
meeting the individual category’s
requirements. The common criteria
require building materials to contain
no hazardous substances, and comply
with all applicable national product
performance standards.
It has been almost seven years
since the roll-out of the building material
labelling programme. To ensure
continued acceptance and buy-in, its
credibility may be enhanced through
surveillance verification of labelled
products.
•

editorial
Algae for biofuels:
A promise in waiting
Attempts being made to produce 4th generation biofuels from genetic modification
Production faces limitations over economics, species selection, cultivation and harvest
Khoo Hock Aun is vicechairman
of the <strong>Roundtable</strong>
on Sustainable Biofuels.
His email is khoohockaun@
cosmobiofuels.com
By Khoo Hock Aun
Algae are fundamentally
differentiated between macroalgae
and microalgae. The former are usually
referred to as “seaweed” and are fastgrowing
organisms of considerable
size.
Microalgae are microscopic
photosynthetic organisms which
are the most primitive form of
plants. While the mechanism of
photosynthesis in microalgae is similar
to that of higher plants, they are
generally more efficient converters of
solar energy because of their simple
cellular structure.
As the cells grow in an aqueous
suspension, they have more efficient
access to water, carbon dioxide and
other nutrients. For these reasons,
microalgae can produce 30 times
the amount of oil per unit of land
compared to terrestrial oilseed crops.
Microalgae are remarkable and
efficient biological factories capable
of converting a waste (zero-energy)
form of carbon (CO ² ) into a highdensity
liquid form of energy (natural
oil). Their growth is not directly linked
to human food or land consumption,
so some call microalgae the “3rd
generation biofuel”.
Microalgae have been categorised
in several classes, distinguished by
their pigmentation, life cycle and basic
cellular structure. According to a US
National Renewable Energy Laboratory
report, the four most important (at
least in terms of abundance) are:
• The diatoms (Bacillariophyceae).
These algae dominate the
phytoplankton of the oceans, but
are also found in fresh and brackish
water. Some 100,000 species are
known to exist. Diatoms contain
polymerised silica (Si) in their cell
walls. All cells store carbon in a
variety of forms. Diatoms store
carbon in the form of natural oils
In the midst
of algal
growth tanks,
researcher
Brian Dwyer of
Sandia National
Laboratories in
Albuquerque,
New Mexico
views a
sample prior
to a turbidity
measurement
or as a polymer of carbohydrates
known as chrysolaminarin.
• The <strong>green</strong> algae (Chlorophyceae).
These are also quite abundant,
especially in freshwater. They can
occur as single cells or as colonies.
Green algae are the evolutionary
progenitors of modern plants. The
main storage compound for <strong>green</strong>
algae is starch, though oils can be
produced under certain conditions.
• The blue-<strong>green</strong> algae
(Cyanophyceae). Much closer
to bacteria in structure and
organisation, these algae play an
important role in fixing nitrogen
from the atmosphere. There are
about 2,000 known species.
• The golden algae (Chrysophyceae).
This group is similar to the
diatoms. They have more complex
pigment systems and can appear
yellow, brown or orange in colour.
About 1,000 species are known
to exist, primarily in freshwater
systems. They are similar to
diatoms in pigmentation and
biochemical composition. The
golden algae produce natural oils
and carbohydrates as storage
compounds.
Cultivation
There are mainly two different
cultivation systems: open pond systems
and photo-bioreactors (PBRs).
Algae farms may be set up with
open, shallow ponds in which waste
CO ² is bubbled into the ponds and
captured by the algae. They are
referred to as “raceway” designs,
in which the algae, water and
nutrients circulate around a racetrack.
Paddlewheels provide the flow and
algae-containing water is removed at
the other end. The open system has
been used for the Chlorella algae.
As for the PBRs, the main
advantage of such closed systems
is that they allow good control
of growth conditions. Biological
contamination is less likely and higher
structure densities are possible. The
main problems of PBRs are their
•

high costs, overheating, build-up of
photolimited zones in the inner zone,
photoinhibition in the peripheral
zones, cell structure damage due to
hydrodynamic stresses, and growth on
the reactor wall.
These farms have been used to
produce algae biomass for uses as
diverse as oil, hydrogen and biogas,
environmental applications, and
as a feedstock in the cosmetic and
pharmaceutical industry.
Algae technology provides a
means to recycle waste carbon from
fossil fuel combustion. Algae farming
is one of the few avenues available for
high-volume re-use of CO ² generated
by power plants. It is a technology
that marries the need for carbon
disposal by power plants with the
need for clean-burning alternatives to
petroleum in the transportation sector.
In a world of ever more limited
natural resources, algae technology
offers the opportunity to utilise land
and water resources that are, today,
unsuited for any other use. Land use
needs for microalgae complement,
rather than compete, with other
biomass-based fuel technologies.
However, there are still a number
of limitations to successful application.
It comes as no surprise then that
governments and private companies
are now trying to develop a viable path
towards 4th generation biofuels which
include genetically-modifying marine
micro-organisms to produce biofuel.
A variety of applications as well as
associated risks are opened by genetic
modification of algae: as a biofuel crop
it could make other unsustainable biofuels
obsolete. While genetic modification
may benefit mankind as a whole, if
pure commercial self-interests prevail,
the technology could be monopolised
by a few privileged countries.
Currently, algae biofuel
production is facing serious
limitations with regard to economics,
species selection, cultivation and
harvest. Genetic modification
has been proffered as a means to
transcend these limitations but its
role is uncertain though, as genetic
engineering raises serious ethical and
environmental concerns.
editorial
Building with two gauges
China likes assets rating; US prefers operational ratings
Information should be easy to access for property buyers
By Elisa Wood
Describing a building as <strong>green</strong> makes
a lot of people cringe. The word is
overused. And what does it mean exactly?
Serious efforts are underway to
move from the hype and offer a more
specific analysis of a building’s energy
performance. Think nutritional labels
for food, except in kilowatt-hours
instead of calories.
In fact, more than 50 national,
regional and local governments have
created policies to rate and disclose
the energy efficiency of commercial
buildings, according to the Institute
for Market Transformation (IMT).
They include the European Union,
China, Australia and Brazil.
In the US, two states have such
policies, California and Washington,
as do five cities: Austin, Washington
DC, New York City, San Francisco and
Seattle.
These programmes have already
placed more than 60,000 buildings,
totaling 4.1 billion sq feet of floor
space, under energy rating and disclosure
rules. Meanwhile, Massachusetts
is considering standards, as is the
city of Portland, Oregon. And many
more local and state governments are
expected to follow. To help them, IMT
has published a report that details best
practices in building labelling.
Why label buildings the way
we do food? When a building has an
energy performance label, buyers and
sellers better understand its market
value, IMT says.
“The premise mirrors transparency
rules in other market sectors, such
as nutritional labels on food and fuel
economy ratings on vehicles, which are
recognised around the world as consumer
protection and keystones of free
and fair enterprise,” says IMT, which
is a Washington DC group that seeks
ways to overcome market failures in
the energy efficiency industry.
While building labels may be a
good idea, they are not always easy to
create. For starters, property owners
must be able to access data on how
much energy their buildings consume.
For large buildings, with many tenants,
this can be difficult. Sometimes tenants
have their own electric meters.
In addition, once the building has
a label, the information has to be easy
to access for potential buyers. IMT recommends
that states post the data on
easy-to-navigate web sites that allow
searches by address, benchmarking
metrics, owner’s name, and traditional
real estate characteristics, such as
building size.
Two major approaches exist to
rate buildings, says the report. Asset
ratings measure the structural energy
performance of buildings based
on simulated operating conditions.
Operational ratings, on the other hand,
measure how much energy a building
actually consumes. China tends
to use asset ratings, while most US
jurisdictions, so far, seem to prefer the
operational approach.
How quickly will energy performance
labelling catch on? It’s clearly
become a hot topic, and the IMT report
will help jurisdictions that want to
move forward. Still, creating the rules
is a state-by-state or even city-by-city
effort, as is often the case when it
comes to US energy policy. – realenergywriters.com
•

editorial
Easy money-saving
tips for business
Cut paper cost by 40% by switching to duplexing (two-sided) printers
Talk about all the <strong>green</strong> things your company is doing in your marketing campaigns
Shel Horowitz is the
primary author of “Guerilla
Marketing Goes Green”.
He can be reached at shel@
<strong>green</strong>andprofitable.com
Environmental measures can be easy
or hard. Go for the easy stuff with the
biggest returns first. Here are some
examples:
• Insulation: Most businesses leak
huge quantities of heated air in the
winter and cooled air in the summer.
Simple and inexpensive measures
like insulating outlets and switchplates
on outside-facing walls with
foam gaskets (and plugging unused
outside-wall outlets with baby outlet
protectors) can make an immediate
difference. So can making sure windows
are properly caulked. And ensuring
that doors to the outside close
tightly and have weatherstripping
and heat-trapping rubber sweeps.
• Temperature control: Install
programmable thermostats to
stop heating/cooling air when the
building is shut for the night – and
programme them properly: no
more than 68°F/20°C in the winter,
no lower than 75°F/24° C in the
summer during working hours, and
perhaps 55°F/13°C in the winter and
85°F/29°C in the summer, from half
an hour after the end of the workday
until half an hour before employees
start arriving in the morning.
• Power control: Plug computers, machinery,
and appliances into smart
power strips that eliminate “energy
vampires” by cutting power to the
device when it’s not in use – and
train your people to flip the power
strips off if they’re the last to leave at
night.
• Less use of paper: Cut your paper
costs by 40% or so by switching to
duplexing (two-sided) printers and
copiers, setting them to default to
two-sided, and training your employees
to use that setting where it’s
possible. Have a goal that the only
single-sided copies are the last pages
of documents with an odd number of
pages.
Green office culture: Set aside the money
you save from these measures to look at
more complex steps, such as auditing your
manufacturing process for energy savings
Of course, some documents do
need to be printed one-sided. But
often, that’s because they’re going to
be used as a reprint master – which
can be avoided by printing from a
digital file instead of a hard copy,
gaining higher quality in the process.
• Recycling: Recycle all the scrap
paper in your office. Recycle plastic
and metal as well. And switch to
recycled copy paper, toilet paper and
paper towels; these days, the latter
two don’t have to cost any more than
non-recycled, and copy paper is only
a bit more.
• Sustainable office habits: Change
your break room and lounges around
with a goal of sustainablity. Get rid
of disposable cups and buy each
employee a personalised coffee mug,
plus a few for visitors. Use reusable
rags and sponges instead of paper
towels. Switch to organic fair-trade
coffee, tea, and cocoa. If your business
is in a place where the water is
drinkable, add a water filter to the
sink and educate your employees
that using filtered tap water is much
<strong>green</strong>er than bottled, as well as
much cheaper for them.
• Greening the workplace: Next, look
at steps you can take to make your
employees more comfortable and
happier, which in turn will make
them more productive. Bring houseplants
into work areas – they turn
carbon dioxide (a major <strong>green</strong>house
gas) into oxygen. Provide natural
lighting where possible. Use fresh
air from open windows during the
spring and fall, if your building is
set up with windows that open. Use
curtains and drapes to let in sun in
the winter, block it out during the hot
summer – and to keep heat in during
winter nights, while releasing it in
summer.
These, of course, are only the tip
of the iceberg. We can all cut energy,
water and waste in thousands of ways,
many of which, like the measures
above, cost little or nothing.
Set aside the money you save
from these measures to look at more
complex steps, such as adding more
insulation, auditing your manufacturing
process for energy savings, switching
to low-water or even waterless
toilets, planting an area of your roof
or adding solar panels, going through
the LEED or EnergyStar certification
process, and so on.
And don’t forget to start talking
about all the <strong>green</strong> things you’re doing
in your marketing, on your website,
and in your press releases. The marketing
benefit alone, in some cases, can
be enough to cover the capital cost of
the next round of improvements.
•

information
New global language of <strong>green</strong>
Resource efficiency to be high on the agenda to improve profits and be competitive
Pace of legislation and policy initiatives on cleantech issues rising
“Similarly, organisations doing
business in an EU country like
Germany or France will need to keep
track of country-specific regulations as
well as the broader regulations of the
EU.” All these will impact customers,
supply chains and business models.
“Green” will become the new global
language, says Ernst & Young, in its
report on what the world will look like
in 2020. One of the six trends identified
(see box below) is that climate
change will remain high on the agenda
as companies seek to explore resource
efficiency to improve profits and be
competitive.
Worldwide, the pace of legislation
and policy initiatives on <strong>green</strong>
issues is rising. “Between July 2008
and February 2009, for example,
250 climate-change regulations were
enacted globally as governments, both
emerging and developed, hastened the
implementation of policies to support
clean technologies (cleantech),” the
report says. “Mandatory standards on
efficient energy consumption, biofuels,
vehicle emissions and eco-labelling are
going into effect in greater numbers
than in previous years.”
It says resource-efficiency initiatives
are not aimed at helping the
environment alone but also to serve
strategic goals such as national security,
job creation and the positioning
of domestic markets as the leaders of
“the industries of tomorrow.”
Companies are beginning to
understand that sustainability efforts
are critical drivers of competitive
advantage. “In their efforts to decrease
dependency on fossil fuels and reduce
environmental damage, companies are
reviewing their supply chains, reducing
carbon footprints and developing
<strong>green</strong> products,” it says.
Increasingly, organisational responses
to resource efficiency and sustainability
efforts are becoming deciding
factors in business performance. A
recent study by A.T. Kearney (“Green”
Winners — The Performance of
sustainability-focused companies during
the financial crisis, 2009) reports that
the stock prices of companies committed
to sustainability outperformed their
industry averages by 15%.
Companies should look out for the
following, says Ernst & Young:
Cleantech a key enabler
Cleantech will be a key enabler of the
resource-efficiency and sustainable
growth agenda.
In a 2009 Forbes/Ernst & Young
survey of 308 corporate executives
worldwide, the majority expected their
firms to spend at least US$10 million
on cleantech investments by 2010,
with 22% predicting a cleantech spend
of at least US$100 million. The largest
corporations are leading with cleantech
spending as high as 5% of annual
revenues. Indeed, consumer products
and other industries with high energy
consumption are setting the pace for
cleantech spending.
Legislative complexities
As countries evolve at different rates in
terms of their climate change agendas,
it is important to understand the regulations
in each jurisdiction.
“For example, in the US and Canada,
in the absence of a comprehensive
national strategy, several states and
provinces have introduced their own
legislation to combat climate change.
As a result, organisations with multiple
locations in a single country need to do
their homework at both national and
local levels.
Six key trends for leaders to bear in mind
Increasing political and economic
1dominance of emerging markets will
cause global companies to rethink and
customise corporate strategies
Climate change will remain high on
2 the agenda as companies seek to
explore resource efficiency to improve
the bottom line and drive competitive
advantage
Financial landscape will look vastly
3 different as increasing regulation
and government intervention drive
restructuring and new business models
Resource scarcity creates tension
Resource shortages have real, tangible
and wide-ranging impacts. Water
scarcity is driven by rapid urbanisation,
population growth, climate change,
energy production, agriculture and
contamination, and is a big source
of tension among Israel, Palestine,
Jordan, Syria and Lebanon. The United
Nations has warned that nations need
to work together to avoid a global
water crisis.
Worldwide, the US$500 billion
water market is emerging as the major
new cleantech opportunity as scarcity
drives demand for treatment and
desalination solutions.
Fierce competition for oil will also
result in the emergence of new power
brokers over time. The US Energy Information
Administration expects non-
OPEC petroleum supply growth will
surpass that of recent years because
of the large number of new oil projects
expected. The largest non-OPEC supply
growth in 2011-2013 are expected
to come from Brazil, the US, Azerbaijan,
Russia, Canada and Kazakhstan.
There will be rising investment in
energy and non-energy commodities
driven by the unpredictability of
securing resources for the future.
Ernst & Young, with the help of futurologist Dr Ian Pearson, believes these are the six
key trends that business leaders should concern themselves with:
Governments will play an increasingly
4 prominent role in the private sector
as demand for greater regulation and
increasing fiscal pressures dominate the
agenda
Technology will be driven by emergingmarket
innovations and a focus on
5
instant communication anytime, anywhere
Leaders will need to address needs and
6 aspirations of an increasingly diverse
21st century workforce.
Source: Ernst & Young
•

information
Nuclear-renewable
debate heats up in India
Farmers protest plan to build 9,900 MW nuclear power plant in Jaitapur
Activists blame powerful companies for promoting nuclear option
By Tejas Patel
ables by mid-century if backed by public
policies. “The findings, from over
120 researchers working with IPCC,
also indicate that the rising penetration
of renewable energies could lead
to cumulative <strong>green</strong>house gas savings
equivalent to 220 to 560 gigatonnes
of carbon dioxide between 2010 and
2050,” states the IPCC.
“Alternatives to nuclear energy
are a thousand times more abundant
and a million times less risky. To push
nuclear plants after Fukushima is pure
insanity,” argues environmentalist Dr
Vandana Shiva.
Past nuclear accidents at Three
Mile Island in the US and Chernobyl
in Ukraine have also raised concerns
about nuclear power. According
to strategic affairs analyst Brahma
Chellaney, India too faced challenges
when the December 2004 Indian
Ocean tsunami inundated the country’s
second-largest nuclear complex.
The Janahit Seva Samiti group,
which opposes the nuclear plant at
Jaitapur, says there is no satisfactory
technology today for eliminating the
radioactivity produced by nuclear reactors.
In a letter to the Chief Minister of
Maharashtra in January, the organisation
wrote: “There is no geological
repository in existence anywhere in
the world which can reliably and safely
confine and contain these high-level
nuclear by-products for the enormous
time period necessary to reduce the
radioactivity to acceptable levels. Till
today there is no scientific answer to
the problem of disposal of nuclear
waste and radioactive by-products of
nuclear reactors.”
Protests
against the
proposed
Jaitapur
nuclear power
project widen
after the
Fukushima
disaster
Farmers in Jaitapur in India’s
Maharashtra state are protesting
against the government’s plan to build
a 9,900 MW nuclear power plant.
The protests intensified after Japan’s
Fukushima Daiichi nuclear disaster
following a 9.0 magnitude earthquake
and tsunami on March 11th.
The plant will be built by Nuclear
Power Corporation of India and the
six reactors of 1,650 MW each for the
plant will be acquired from French
company Areva SA. If the Jaitapur
plant is commissioned, it will be the
world’s largest. The protests against
the plant following Japan’s disaster has
triggered debate over the viability of
building nuclear power plants to meet
growing energy needs.
Nuclear power is India’s fourth
largest source of energy after thermal,
hydro and renewable sources. India’s
20 nuclear power plants generated
4,780 MW last year. Five more are being
built that will yield 3,900 MW. The
government plans to increase nuclear
energy output to 63,000 MW by 2032.
But these massive expansion
plans are now facing a wall of protests
with activists citing the example of
Germany, which is to phase out nuclear
energy by 2022. Countries like China,
Switzerland, Israel, Malaysia, Thailand
and the Philippines too are reviewing
their nuclear energy programmes.
Activists argue that India has abundant
renewable energy resources, and with
proper funding to this sector, energy
needs can be met. They quoted the
statement of physicist Sowmya Dutta
that the “world has potential for 17
terra watt nuclear energy, 700 terra
watt wind energy, and 86,000 terra
watt of solar energy”.
In fact, a new report by the Intergovernmental
Panel on Climate Change
(IPCC) says close to 80% of the world’s
energy supply could be met by renew-
The Samiti activists also argue
that besides extremely high costs,
building and maintaining nuclear
plants results in security and environmental
risks. According to them
“public opposition to nuclear power
in Europe and the US has also been
growing and that is why the western
countries are selling their reactors to
India, China and South Korea.”
In India, many supporters
of nuclear energy are scientists
associated with nuclear/atomic
regulatory bodies. Dr Anil Kakodkar,
former chairman of the Atomic Energy
Commission, is one. He says seismic
activity in Japan is very different from
India’s. He adds that solar energy
cannot be an alternative to nuclear
power as it is not available round the
clock and also requires more land than
nuclear power plants.
The debate over which route India
should take is continuing with a lot of
activists blaming the powerful cartel
of corporations that promote the use
of nuclear energy. They accuse these
companies of spending millions to
promote their message that nuclear
energy is clean and safe. – THL-
Mediagrove
..
•

information
Australia carbon tax unlikely
to drive up renewables
Grattan Institute says, for most, carbon price would only have minor impact
A$23 a tonne not enough to present renewable energy as attractive alternative
By Tan Su-Yin
It is an issue that has divided the
nation for a decade and seen two
failed bouts at parliament. But if
all goes as planned, Australia’s
emissions trading scheme
will take off, finally.
From next July, 500
of Australia’s biggest
polluters will pay a tax
of A$23 (US$24.60)
a tonne on their own
carbon emissions.
The carbon price
rises by a real 2.5% per
annum until 2015 when
the tax will morph into a
market-based emissionstrading
scheme. Agricultural
and land sector emissions will not be
covered, and light commercial vehicles
and households will not face a carbon
price on fuel. However, changes to
fuel tax credits or excise will create
a carbon price equivalent for some
commercial users of fuel.
The Clean Energy Future
package’s goal is to reduce Australia’s
total emissions to 5% below 2000
levels by 2020, and to 80% below
2000 levels by 2050. The government
hopes to introduce it by September
and have it passed by year-end.
It is a controversial move for
one of the world’s largest coal
exporters and most carbon-intensive
economies. While many scientists
and environmentalists have hailed the
plan as a good start, reactions from
businesses and consumers have been
mixed. A broad range of industries,
from retail to tourism, say the tax
and its knock-on effects could be
devastating.
Tony Wood, Energy Programme
director of Grattan Institute, an
independent think tank focused on
public policy, says the institute finds
most of these claims overstated. A
Australia is one of the world’s
largest coal exporters and most
carbon-intensive economies
report published in 2010 says for
most, a carbon price would only
have minor impact on costs and
competitiveness – smaller than factors
such as exchange rates, labour market
costs, and fuel prices. “Many industries
will be able to pass on costs to their
customers,” says Wood.
Tony Wood: The
primary driver
for renewable
energy demand
continues to be the
Renewable Energy
Target
Some businesses have already
signalled higher prices. Aviation group
Qantas has said the tax will raise fares
by A$3.50 per flight sector on average.
According to treasury modelling,
carbon pricing is expected to increase
electricity prices by 10% in 2012–13.
Not all businesses can pass
on the higher costs without losing
competitiveness. Businesses that are
in emissions-intensive, trade-exposed
industries, face the challenge of cost
increase that their rivals in other
countries do not. To mitigate this, the
Federal Government will allocate A$9.2
billion to assist the industry over the
first three years. The most emissionsintensive
trade-exposed activities
will receive free carbon permits, with
the assistance reduced yearly. Less
emissions-intensive, trade-exposed
activities and small businesses get
other forms of support such as grants.
Consumers get relief too. Prime
Minister Julia Gillard announced
that half the tax revenue will go to
some measure of compensation,
with nine out of ten households
in line to receive tax cuts or
payment increases. Shane
Oliver, chief economist
of AMP Capital says
as these benefits
kick in next year, the
clean energy plan
could stimulate the
economy slightly in
the short term. Over
the longer term, there
is a good chance the
economic impact will
be minor, he says. “Over
time, with a price put on
carbon pollution, investment
in clean energy and growth
in clean industries will likely
offset reduced investment
and slower growth in dirty
energy and sectors. Businesses and
households will use the price signal
from the carbon price to reduce energy
consumption.“
Will renewable energy get a
boost? Some say that the price of A$23
a tonne isn’t high enough to present
renewable energy as an attractive
alternative, at least until various forms
of assistance are phased out and prices
climb.
“The price on carbon will drive
the lowest-cost emissions reduction
activities,” says Wood. “In the short
term, these are unlikely to include
renewable energy. There are simply
cheaper ways to reduce emissions.”
He says the primary driver for
renewable energy demand continues
to be the Renewable Energy Target,
which is legislated to ensure that 20%
of Australia’s electricity supply comes
from renewable sources by 2020.
The package does give
•

enewables a big boost in funding.
The new commercially-oriented Clean
Energy Finance Corporation (CEFC)
has A$10 billion to invest in the
commercialisation and deployment of
renewable energy, energy efficiency
and low-pollution technologies, as well
as in manufacturing businesses that
provide inputs for these sectors – for
example, manufacturing wind turbine
blades.
Controversially, however, carbon
capture and storage (CCS) is left out of
the equation. Wood says the exclusion
of CCS is counter-productive. “The
core of the climate change package is
the application of a market mechanism
to achieve reductions in <strong>green</strong>house
gas emissions at lowest cost to the
economy. CCS is both a low-emission
technology and projected in the
Treasury modelling to form 30%
of electricity generation by midcentury.”
information
China halves EV production,
faces major challenges
Purchase subsidies fail to lift EVs to popularity
Supply-side support needed for batteries, charging infrastructure and production
The Chinese government has halved
its electric vehicle (EV) production
target for 2015 to 250,000 units in the
to-be-released Energy Efficiency and
New Energy Vehicle Industry Plan
2011–2020, according to a source
close to the situation.
Li Yizhong, deputy director of the
Chinese People’s Political Consultative
Conference (CPPCC) Economic
Commission and former Minister of
Industry and Information Technology,
says, however, that the target is far too
conservative, as the number represents
a mere 1% share of the 25 million vehicles
that China expects to produce
in 2015, according to the recently released
Twelfth Five-Year Plan spanning
2011 to 2015.
Bottlenecks remain with the industrialisation
of electric vehicles (EV)
in China, as no material breakthrough
has been achieved in terms of battery
technology, charging station installation,
fiscal subsidy policy and consumer
acceptance, says an industry analyst
who believes the adjustment to the EV
target was the right thing to do.
Subsidies granted to private buyers
of new energy vehicles amounted
to less than 100 million yuan (about
US$15 million) for all of 2010, representing
only a small fraction of the
previously planned subsidies totalling
5 billion yuan (about US$773 million),
adds Zhen Zijian, an official at the Ministry
of Science and Technology.
The Chery QQ3 is among many China-made EVs hit
by poor sales
Challenges to production
Driven by a series of policies issued by
the Chinese government to support the
development of EV, China’s domestic
automakers have demonstrated unprecedented
enthusiasm for EV manufacturing.
Today, there are more than
1,000 EV producers in China.
However, unsatisfactory sales
have led to concerns over the future
development of the market. Despite
government subsidies, EV fail to gain
popularity among consumers due to a
variety of factors including short driving
range, long battery recharging
times, poor safety performance and
inadequate charging infrastructure. Dieter
Zetsche, head of Mercedes-Benz
Cars, says the necessary breakthrough
in battery technology is unlikely over
the next ten years.
A report released by the World
Bank has identified several challenges
China faces in promoting EV. Firstly,
the country’s existing EV policies focus
mainly on purchase subsidies rather
than on the production side. Measures
must be taken to stimulate technical
innovation, put in place a vehiclecharging
infrastructure and improve
manufacturing capacity. Secondly, it
has become increasingly evident that
the sector needs to develop integrated
charging solutions to ensure safe
charging of EVs. Thirdly, China has to
develop unified standards on charging,
safety and battery disposal.
Furthermore, US-based FMC
and Germany’s Chemetal jointly announced
a 20% increase in the price
for lithium starting from July 1st.
The price hike is expected to trigger
increases in lithium battery prices,
putting much pressure on companies
looking to promote lithium batterypowered
EVs.
Hybrids preferred
Hybrid technology is looking more and
more like the preferred option during
the transition from fuel-powered vehicles
to EVs, as reflected by the strong
sales of Toyota and Honda hybrids in
the US and Japan. The good news is
that the Chinese government is paying
particular attention to hybrids in the
Energy Efficiency and New Energy Vehicle
Industry Plan 2011–2020, as part
of efforts to promote energy-efficient
cars.
Bullish outlook still
Nevertheless, some remain bullish on
China’s EV market. According to the
Boston Consulting Group, a leading
global management consulting firm, by
2020, China will become the world’s
largest EV market, followed by Europe
and the US, with EVs expected to account
for 7% of its new car sales. –
Nanjing Shanglong Communications
•

information
ASEAN goes for regional
certification
Jakarta tasked to implement accreditation scheme
Only 200 energy managers in ASEAN, mostly in Malaysia
By Stephen Ng
Under the ASEAN Plan of Action for
Energy Cooperation (APAEC 2010-
15), all ten member countries have
committed to reduce their energy
intensity by 8% by 2015 (based on
2005 levels) and eight countries,
namely Cambodia, Indonesia, Laos,
Malaysia, Myanmar, the Philippines,
Thailand and Vietnam, have committed
to improve the energy efficiency of
their industries. The ASEAN Centre
for Energy (ACE) in Jakarta has been
tasked with implementing the ASEAN
Energy Management Accreditation
Scheme (AEMAS) in these countries
to help achieve this target. AEMAS is
the world’s first regional certification
system for energy managers and
energy end-users.
ACE acting executive director
Christopher Zamora says AEMAS
is the product of a long process
based on thorough reviews of
existing environmental and energy
management systems.
“It started as a series of
projects, implemented by ACE with
financial support from the European
Commission-ASEAN Energy Facility
since 2002,” Zamora says. “This
series of projects cover the initial
design of AEMAS, the development
of training curricula for energy
managers and training providers,
and the development of the energy
management tools and simulation
test.”
The scheme is designed
to complement the existing
environmental and energy
management system, ISO 50001, with
the added advantages of achieving
quantifiable energy savings and carbon
dioxide reduction. It was designed
by the ASEAN Energy Efficiency and
Conservation Sub-Sector Network, and
subsequently endorsed by the ASEAN
Ministers on Energy Meeting (AMEM).
There are only some 200
energy managers in the entire
ASEAN region, and most are based
in Malaysia. According to Malaysia
Green Technology Corporation
(MGTC) chief executive officer Dr
Kaidalova: AEMAS is open to
anyone with a basic degree, not
just engineers
Nazily: MGTC will be involved
in training and certification of
energy managers
Nazily Mohd Nor, whose organisation
is the AEMAS Country Chapter for
Malaysia, Malaysia’s target is 500
energy managers by 2014. As at May
2011, more than 160 energy managers
have passed out as accreditated
energy managers. “This will still
not be enough to meet the demands
of the country,” he says. “For this
reason, MGTC will be involved in the
training of local trainers and auditors,
certification of energy managers and
energy end-users under the Energy
Management Gold Standard, and
providing technical training to support
the scheme.”
More recruits
According to Viktorija Kaidalova,
programme manager of European
Union (EU)-Malaysia Cooperation on
Environment, Sustainable Energy and
Research, the certification of energy
managers under AEMAS is open not
only to engineers, but anyone, including
lawyers and accountants, as
long as they have a basic degree. The
scheme, she adds, currently enjoys a
funding of 1.7 million euros (US$2.44
million), provided by the EU under the
Switch-Asia Programme for four years,
starting February 2010 and ending in
January 2014.
Once accredited, energy
managers will play an important role in
corporations to help achieve the three
core objectives of AEMAS, which are:
• Reduce energy consumption in the
manufacturing sector
• Reduce emissions of <strong>green</strong>house
gasses
• Increase the professional standing of
accredited energy managers.
Analysts say given the <strong>green</strong> push
by governments in the region, energy
management will be the next big
thing. Energy savings will eventually
Kurup: AEMAS is just a start of
the journey in a more structured
manner
be where the big money is, and the
potential is great for energy managers.
At the AEMAS launch in Kuala
Lumpur recently, TM Research
and Development (TM R&D) and
Universiti Teknologi Malaysia (UTM)
received the Energy Management
Gold Standard Certification One
Star – a recognition for having their
own energy management system
according to ISO 50001, budgets
for energy efficiency measures,
procurement policy and internal
investment criteria that favour energy
efficient technologies, motivation
plans for personnel involved in energy
management systems and an AEMAS
certified energy manager.
TM R&D chief executive officer Dr
Gopi Kurup, who received the award
on behalf of his organisation, says: “To
us, AEMAS is just the start of the journey
in a more structured manner.”
Last month, Green Purchasing Asia featured
case studies of how Malaysian
buildings, including TM and UTM buildings,
cut energy use susbtantially with the
support of energy managers.
•

information
Malaysia’s feed-in tariff
scheme delayed to December
Subsidiary laws, power purchase agreements, admin guidelines complex and technical
Architect of Malaysia’s FiT mechanism Ahmad Hadri leaves ministry, joins US-based First Solar
By Ann Teoh
The implementation of the muchawaited
feed-in tariff (FiT) scheme
that is to spur the growth of renewable
energy in Malaysia has been deferred
by three months to December 1st, as
the government wants more time to
craft the subsidiary laws, power purchase
agreements and administrative
guidelines.
The delay was not unexpected,
as the posts of the chief executive and
nine other positions for the Sustainable
Energy Development Authority (SEDA)
Malaysia were advertised only on July
28th, five weeks before the expected
implementation. In June, a local daily
reported that Badriyah Abdul Malek,
the energy sector undersecretary for
the Ministry of Energy, Green Technology
and Water had been tipped to be
the CEO.
Still, the delay is a blow to those
who have invested in grid-connected
renewable energy systems in the country
as the FiT offers premium tariffs
that would make their investments
worthwhile. (Green Purchasing Asia
published a cover series on Malaysia’s
FiT in the June issue, which is downloadable
on www.<strong>green</strong>purchasingasia.
com.)
The FiT is a commitment from
the government to enable renewable
energy to reach a target of at least 985
MW by 2015 and 2,080 MW by 2020.
The renewable resources eligible for
the FiT are biogas, biomass, small
hydros and solar photovoltaic (PV).
The two sets of laws that pertain to
the quota-based scheme FiT – the
Renewable Energy (RE) Act and the
SEDA Act – were passed in April. A
workshop organised by the ministry
in late April to discuss details of
subsidiary legislations drew more than
200 active participants.
Minister of Energy, Green Technology
and Water Datuk Seri Peter
Chin, in justifying the delay, says he
is not delaying the implementation on
a whim but that the seven subsidiary
laws, nine standardised Renewable
Energy Power Purchase Agreements
(REPPAs) for the different renewable
Tan Sri Dr Fong Chan Onn
has been appointed as SEDA
chairman
Datuk Seri Peter Chin: Online
FiT applications will facilitate
good governance
sources, and 19 administrative guidelines
are complex and technical, and
crafting the said documents is taking
more time than originally anticipated.
He says the authorities want to
avoid any glitches in the FiT implementation.
“A sound and resilient
regulatory framework is crucial to ensure
the FiT system operates smoothly.
This has been one of the many lessons
that my ministry has learnt from other
countries that have adopted the FiT.”
Coincidentally, on the day of
Chin’s announcement on August
15th, First Solar Inc announced that
Ahmad Hadri Haris, the man credited
with developing the FiT mechanism in
Malaysia, had joined them as senior
director of public affairs for Asia
Pacific. Ahmad Hadri was the chief
technical advisor for renewable energy
at the ministry and the National Project
Leader of the US$25-million Malaysia
Building Integrated Photovoltaic
(MBIPV) Project, a project he led for
six years from 2005. He also holds a
position in the International Energy
Agency Photovoltaic Power System
(IEA-PVPS) Programme. It is not
known who will replace him at the
ministry.
Chin says, however, SEDA Malaysia
will be officially set up on September
1st as planned, and its website,
a crucial element as this is where
transactions are made, will
be launched that month
(September 8th, according to
industry insiders).
“My ministry has
decided to launch SEDA,
Malaysia’s portal, earlier
because I know the stakeholders
and public are eager
to know about the roles and
functions of the agency and
want to familiarise themselves
with the procedures
and processes involved in applying for
the FiT,” says Chin.
“We understand the quotas for the
renewable energy resources under the
FiT system are modest, and to ensure
the integrity of good governance, we
have developed a mechanism enabling
all applications to be carried out
online. The e-FiT Online System is the
first of its kind in the world that will
handle submissions and online approvals
of the FiT applications, including
tracking the progress of the work plan
after the approval is granted.”
Chin also announced the appointment
of politician and former
Minister of Human Resources Tan Sri
Dr Fong Chan Onn as SEDA chairman.
Appointed from the industry are
former Department of Civil Aviation
director-general Datuk Kok Soo Chon;
former principal assistant director of
the Economic Planning Unit (EPU)
in the Prime Minister’s Department
(Energy Section) Dr Pola Singh and
former Accountant-General Datuk
Mohd Salleh Mahmud. There will also
be a representative each from Chin’s
ministry and the EPU.
•

information
All hail the big <strong>green</strong> spender
Large-scale <strong>green</strong> public and B2B procurement to boost ecolabel adoption
Eco standards have been proven to save costs as well as the environment
By Siaw Mei Li
If Australia’s Food Standards Amendment
(Truth in Labelling – Palm Oil)
Bill is passed, manufacturers will have
to declare palm oil specifically on the
ingredients list of product packaging.
Malaysian palm oil industry stakeholders
argue that such labelling would
prejudice consumers against palm oil
products.
Champions of the Bill say that
on the contrary, it would allow
consumers to shop with a clearer
conscience, allow users of certified
sustainable palm oil to distinguish
themselves in the market, and promote
sustainable resource management.
With consumer awareness and
global competition on the rise, <strong>green</strong>
standards are increasingly important
for industries ranging from paper
products and furniture to electronic
gadgets. Meanwhile, large-scale and
institutional <strong>green</strong> procurement is
crucial to making sustainable producers
viable in the short-run and
profitable in the long-run.
In a May interview with Sustainable
Industries, Anastasia O’Rourke,
co-creator of the Ecolabel Index,
observed: “I see the most active
growth in interest in ecolabels in B2B
transactions, rather than with consumers.”
O’Rourke said companies are
requiring that suppliers comply with
ecolabels and <strong>green</strong> standards to boost
the environmental performance of
their own products, substantiate <strong>green</strong>
claims and reduce risks in their supply
chains. Examples of such companies
include Walmart, McDonald’s (whose
Filet-O-Fish in Europe is now made out
of Marine Stewardship Council [MSC]
certified fish only) and Unilever, who
have pledged to purchase only sustainable
palm oil by 2015.
Companies have found the savings
from their <strong>green</strong> purchasing decisions
good for the bottom line. In South
Africa, Walmart saved tens of millions
of dollars when it changed its dairy
packaging into rectangular, stackable
jugs that were easier to pack and ship
– halving labour, lowering water use by
up to 70% and reducing fuel use now
that fewer trips were needed to deliver
milk and retrieve empty crates. Undergirding
budget airline AirAsia’s order
As environmentally preferable procurement goes mainstream,
eco standards and labels become crucial for matching
businesses with credible <strong>green</strong> suppliers
for 200 Airbus A320neo aircraft at the
2011 Paris Air Show is the projection
that the new LEAP-X engines would
save the company as much as US$12
million on fuel over 15 years.
Ecolabels are also being increasingly
used in institutional purchasing
to meet policies for <strong>green</strong> purchasing,
notably in governmental agencies, and
by institutions such as universities and
hospitals, says O’Rourke.
Although government efforts to
<strong>green</strong> the economy have their fair
share of criticism and setbacks in
places like the UK, the US and Australia,
public procurement provides
the scale for businesses to invest in
time-intensive and costly sustainability
audits and certification processes.
Across Europe, where public
authorities spend some 2 trillion
euros annually, the EU’s Green Public
Procurement process leverages
governments’ collective purchasing
power to source from suppliers with
lower environmental impacts and
promote sustainable consumption and
production. In the UK, the Carbon
Disclosure Project Public Procurement
Programme is in its fourth year
of helping government departments
and suppliers to cut carbon impacts. In
2009, it helped save 32 million tonnes
of carbon dioxide equivalent and £221
million (US$365 million).
In the US, business opportunities
are being created for <strong>green</strong> producers
amid the severe economic recession.
Over US$78 billion, or some 10%,
of the early 2009 economic stimulus
package worth US$787 billion was
directly earmarked for
<strong>green</strong> projects. In October
the same year, President
Barack Obama signed an
executive order requiring
federal agencies to
prioritise sustainability
when buying products and
services, and to meet
goals such as a 30% cut in
vehicle fleet petroleum use
by 2020 and 50% recycling
and waste diversion by
2015.
Taiwan’s Government
Green Procurement Legislation
allows public servants
to preferentially purchase
products bearing the Green Mark
ecolabel, while Japan’s Green Purchasing
Law has been in effect since 2001.
China’s 2011 budget included 159 billion
yuan (US$24.2 billion) in spending
on energy conservation and environmental
protection, and its Government
Purchase Law’s preferential <strong>green</strong>
purchasing policy, which took effect in
2003, saved the government 5.1 billion
yuan in the first five years.
The outcome of the Australian
palm oil bill remains to be seen, but
it has prompted the Malaysian palm
oil industry, like Indonesia’s, to draw
up its own sustainability standards
after some major players hit a bumpy
patch on the road to certification via
the <strong>Roundtable</strong> on Sustainable Palm
Oil (RSPO). What’s certain is that
sustainability standards are no longer
optional and institutional demand is
instrumental for sustaining large-scale
<strong>green</strong> transitions.
•

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information
ABB and Siemens nail US$1.7b
offshore-link deals
European engineering giants ABB and
Siemens have won separate contracts
to build high-voltage direct-current
(HVDC) transmission lines for offshore
wind farms in the German North Sea.
ABB secured a US$1 billion order
from Dutch-German transmission
system operator TenneT to design
and install the 900 MW Dolwin2
link, which will harness power from
PNE Wind’s 400 MW Gode Wind 2
and other as-yet undecided projects.
Separately, Siemens and Italian cable
maker Prysmian won an order in
the region of €600 million (US$710
million) to build the 690 MW Helwin2
link, which will accommodate the
Amrumbank West project, part-owned
by E.ON. Prysmian says its share of
the deal is worth about €200 million.
Both the Dolwin2 and Helwin2 links
are scheduled for completion in 2015.
TenneT is building four grid-clusters
in the North Sea, known as Sylwin,
Helwin, Borwin and Dolwin. Each
cluster will have several offshore
substations, which will harness
adjoining projects and feed their
electricity to shore. Siemens, ABB and
Areva are among a small group of
companies globally supplying HVDC
links, which are critical for reducing
transmission losses from distant
offshore wind farms. (Source: www.
rechargenews.com)
Local suppliers to win from
China national solar FiT
China has unveiled its long-awaited
national feed-in tariff (FiT) for solar
projects. Solar developers selling
to grid operators from projects that
were approved before July 1st and are
completed by end-2011 will get 1.15
yuan/kWh (US$0.18/kWh), the National
Development and Reform Commission
(NDRC) says. For other projects, the
on-grid price will be 1 yuan/kWh. Solar
installations in Tibet will continue to
get a previously agreed rate of 1.15
yuan/kW. The FiT are higher than
the prices under China’s old bidding
Poo-powered electricity
The Bill & Melinda Gates
Foundation is giving away more
than US$41.5 million to develop
innovative toilets for the world’s
poorest regions. Scientists in
the project are working on
seemingly wacky ideas, such
as transforming human faeces
into charcoal and microwavepowered
toilets that can generate
electricity from gasified human waste. But while these may seem odd, they
could revolutionise life for millions. “The Bill & Melinda Gates Foundation
believes in the power of innovation, and we focus our funding on where
we can have the biggest impact in helping people lead healthy, productive
lives. No innovation has saved more lives in the last 200 years than the
flush toilet and sewer system,” says Frank Rijsberman, director of water,
sanitation and hygiene for the foundation. “But we need new approaches to
ensure that the 4% of humanity without access to improved sanitation has
a safe and affordable way to go.” (Source: www.fastcompany.com, www.
gatesfoundation.org)
contracts, which ranged from 0.73
yuan/kWh to 0.99 yuan/kWh. China
targets more than 5 GW of new solar
power plants by 2015, though the goal
may be doubled. Jefferies & Co analyst
Jesse Pichel says China’s solar subsidy
could boost the fortunes of Chinese
equipment producers such as Yingli,
JA Solar, Suntech Power and Trina
Solar. (Source: www.rechargenews.
com)
Tagging the ones
that did not get away
If an initiative
from
EcoTrust
Canada called
ThisFish
takes off, you’ll be able to scan tags on
coveted crustaceans (and a growing
menu of other seafood as well) to learn
more about your meal’s route from
boat to table. By tagging individual
fish, shellfish, and crustaceans,
ThisFish aims to connect retailers
and consumers with fishermen who
sustainably harvest the seas’ dwindling
bounty. The tag gives independent
fishermen the leverage they need to
brand themselves. ThisFish has tagged
some 170,000 fish – an impressive
start, but only a drop in the bait bucket
compared to the more than 80 million
tons of seafood harvested annually
worldwide. (Source: www.fastcompany.
com)
Korea and Bolivia joint venture
for lithium-ion battery parts
A consortium of Korea Resources
(KORES) and Korean steelmaker
POSCO will be setting up a joint
venture with Bolivia’s state-run miner
Comibol to manufacture lithium-ion
battery parts. However, the scale of
investment and the launch date have
yet to be decided. SK Innovation
and LG Chem are also expected to
participate in the venture. Bolivia is
home to the world’s largest lithium
reserves, estimated at 5.4 million
tonnes. (Source: EV Update)
Pan Pacific to open Green Mark
Platinum hotel in Singapore
The Pan Pacific Hotels Group will
open its flagship Green Mark Platinum-
•

ated hotel in Singapore mid 2012.
The S$350 million Parkroyal on
Pickering, designed by WOHA, will
feature a hotel-in-a-garden concept. Its
sustainable features include rainwater
harvesting, automatic sensors to
regulate energy and water usage and
solar cells. The hotel will also have
15,000 sq m of sky gardens, reflecting
pools, waterfalls and <strong>green</strong> walls.
“The design of Parkroyal on Pickering
demonstrates how we can not only
conserve <strong>green</strong>ery in our high-rise city
centre but multiply it in a manner that
is architecturally striking, integrated
and sustainable,” WOHA senior
associate Donovan Soon says.
“It underpins our garden city image
and will set Singapore as a world
leader on the stage of <strong>green</strong> high-rise
developments.”
Chinese and Germans fight for
solar market in soccer field
Waste not: Comfy stools with missing footprints
The Italian design team 13 Ricrea
has come up with a brilliant idea of
transforming latex waste into designer
furniture. The Latex Roll is a soft,
comfortable and ergonomic pouf made
from latex waste from the shoe industry;
to be precise, from the production of
insoles. Once the footprints are cut out,
tonnes of bright colour latex are left as
factory-floor waste. All this would have
ended up in landfill but, with Angela
Mensi, Cristina Merlo and Ingrid Taro’s
creativity, the useful life of the latex
is extended. The latex roll is a perfect
example of upcycling, where waste
material is converted into new materials
or products of better quality. Upcycling
cuts down on the use of raw materials
when creating new products. (Source:
www.e-side.co.uk)
Chancellor Angela Merkel’s pledge
to shut nuclear reactors by 2022.
The rush to build brand awareness
increases pressure on German solar
manufacturers Solarworld AG
(SWV) and Q-Cells, which are battling
competition from cheaper Chinese
photovoltaic devices.
better prices than those without. The
certifications included in the report
were from Earth Advantage, the federal
government’s Energy Star programme
and LEED home designations from the
US Green Building Council. (Source:
http://www.sustainablebusinessoregon.
com)
Chinese solar companies are entering
the homes of German soccer fans for
the first time, ramping up advertising
in Europe’s biggest power market.
Bloomberg reported that China’s
Suntech Power Holdings Co., the
world’s largest solar-panel maker,
put its name on jerseys of 1899
Hoffenheim’s players for their
opening game in the Bundesliga, a
profitable German soccer league.
Another Chinese company, Yingli
Green Energy Holding Co, is
backing Bayern Munich, Germany’s
most successful club, that aims to
unseat champion Borussia Dortmund,
which is sponsored by German panel
maker Q-Cells SE (QCE). “It’s an
unprecedented marketing push,”
Pascal Schulte, senior consultant at
Sport+Markt, a sports marketing
research firm in Cologne, tells
Bloomberg. German homeowners spent
US$6.7 billion on solar panels in 2010
and there will be a power shortfall with
30% premium for <strong>green</strong>
homes in Portland
In the United States, Portlandarea
homes with <strong>green</strong> credentials
command prices an average 30%
higher than the non-certified ones,
even while the overall market share of
certified
<strong>green</strong>
homes in
the region
took a
slight dip.
Earth
Advantage
Institute, a non-profit <strong>green</strong> building
organisation, recently announced
the results of its annual certified
home analysis for the Portland metro
region from May 1st, 2010 through
April 30th, 2011. The report found
that new homes and existing homes
with certification of sustainability
measures, such as energy efficiency
and <strong>green</strong> building materials, get
Ming Yang signs offshore
agreement with Three Gorges
Wind turbine
manufacturer
China Ming
Yang Wind Power Group (Ming Yang)
has signed a strategic cooperation
agreement with Three Gorges New
Energy (CTGNE), a subsidiary of
Three Gorges Corporation, the
holding company responsible for
building China’s Three Gorges Dam
Project. The agreement covers
collaboration on offshore wind
development in Guangdong, and
gives Ming Yang preferential status
in CTGNE wind power projects in the
province. The agreement also “paves
the way for domestic and international
wind power projects development in
the future,” according to Ming Yang.
In late July, Ming Yang won a contract
to supply and install sixteen 3 MW
Super Compact Drive (SCD) turbines
in an offshore project in Guangdong
•

for Guangdong Yudean Xuwen
Wind Power. The company claims
the agreement marks the first fullservice
engineering, procurement
and construction (EPC) deal awarded
for a Chinese offshore wind project.
(Source: www.rechargenews.com)
Suzlon fined US$490,000 for
US pollution breaches
Wind turbine
maker Suzlon
was fined
US$490,000 by US authorities over
environmental violations at its plant in
Minnesota. The Minnesota Pollution
Control Agency (MPCA) says the
Indian wind equipment group is paying
the fine in four equal instalments for
offences related to an inspection of
Suzlon Rotor Corporation’s bladeproduction
facility in Pipestone in
2009. Suzlon has “agreed to resolve air
quality, hazardous waste, solid waste,
and stormwater violations at its wind
turbine blade manufacturing plant in
Pipestone,” the MPCA says. A fourth
blade-production line was also installed
without obtaining permits. Suzlon
says the penalty does not impact on
its business. It describes the breach
as a “one-off and isolated incident”
and that the company has been in
full compliance since the breaches
were discovered. Opened in 2006, the
Pipestone plant employed more than
500 people at its peak, but Suzlon is
down to only a skeleton staff in the
face of declining US orders. (Source:
www.rechargenews.com)
New global business forum
hunting for partners in Asia
WORLD
RESOURCES
INSTITUTE
The World Resources Institute (WRI),
a US-based think-tank, is hunting
for partners in Asia for its newlylaunched
global business forum aimed
at accelerating private sector action
on climate change. The founding
members of the Next Practice
Collaborative, launched in July, are
aluminium firm Alcoa, chemical
company AkzoNobel, cement maker
CEMEX, health products company
Johnson & Johnson, engineering firm
Siemens, office supplies company
Staples and engineering conglomerate
United Technologies Corporation.
Next Practice will focus on business
and finance models for low-carbon
economic growth in major markets
like the US, China, Mexico, India and
Brazil. Advisors will include individuals
like Carter F. Bales, chairman,
NewWorld Capital Group LLC; David
Blood, co-founder and senior partner,
Generation Investment Management;
Stefan Heck, director, McKinsey
& Company; Rebecca Henderson,
Senator John Heinz Professor of
Environmental Management, Harvard
Business School; Charles O. Holliday,
Jr., former CEO of DuPont and
chairman, Bank of America; and
Jigar Shah, CEO, Carbon War Room.
(Source: www.wri.org)
Siemens and Carbon Trust
launch efficiency financing
The Carbon
Trust, an
independent
non-profit
company
set up by
the UK government to support low
carbon technology, has teamed up
with Siemens Financial Services to
offer UK manufacturers finance for
buying energy-saving equipment. They
say the potential demand for such
finance could be £4.6 billion (US$7.5
billion) over the next three years.
The <strong>green</strong> finance scheme matches
monthly repayments with savings from
reduced energy consumption. Any
manufacturer can apply. The scheme
will allow them to invest in equipment,
such as high-efficiency motors, that
will not only save energy, but often
help to improve productivity. The
Carbon Trust will assess the carbon,
energy and cost savings of applications
while Siemens provide the financial
backing and manage the provision of
funding.
EcoBroker, a new branch
of real estate broking
Dramatic cathedral ceilings got househunters
Matt Thompson and Charlotte
Lowson all excited but their realtor,
Jeanne Moyer (photo),
the first EcoBroker
in Wake County,
US, cautioned them
that they’d have to
fill the space with
heat come winter.
Realtors in US are obtaining training
in energy-efficient, healthy homes and
lifestyles in response to greater <strong>green</strong>
awareness. Moyer says she chose the
EcoBroker certification, which is not
recognised by the National Association
of Realtors (NAR) but, she feels,
has more depth than the NAR’s Green
Designation. Both certifications require
18 hours of online or in-person courses
that go into identifying and evaluating
homes and communities with <strong>green</strong>
attributes, understanding <strong>green</strong> financing
tools and following <strong>green</strong> work
practices. With her training, Moyer
points out <strong>green</strong> features in otherwise
conventional homes, and advises on
retrofitting older ones. She even has a
list of reliable vendors. (Source: www.
newsobserver.com)
Carbon-labelled products
sell better than organic
Nine out of ten
households in
Britain, a pioneer
in carbon labelling,
bought products
with carbon labels
last year, albeit mostly unwittingly,
with total sales exceeding £2 billion
(US$3.1 billion). This is more than the
total sales of organic products (£1.5
billion) or Fairtrade products (£800m)
and is largely due to Tesco, Britain’s
biggest retailer, carbon labelling more
than 100 of its own-brand products,
including pasta, milk, orange juice and
toilet paper. (Tesco said in 2007 that
it wants to carbon label the 70,000
products it sells but has managed
only 500 so far.) Carbon Trust, a
consultancy funded by the British
government, has footprinted more
than 5,000 products worldwide, from
building materials to pharmaceuticals.
Among the first products to have
carbon labels applied were the cheeseand-onion
potato crisps made by
Walkers, a brand owned by PepsiCo,
which had a footprint of 75 grams per
packet. (Source: The Economist)
•

Dongfeng Nissan to
produce EV
Dongfeng Nissan
Passenger Vehicle
Company (Dongfeng
Nissan), a joint
venture between
Japan’s Nissan and
Chinese automaker
Dongfeng, will be introducing an
electric vehicle (EV) model under
the Venucia brand (Chinese name:
Qi Chen) in 2015. The EV will be
rolled out as part of pilot programmes
in Wuhan, Hubei Province and
Guangzhou. Dongfeng Nissan was
involved in launching the Nissan LEAF
in China. It plans to introduce 30 new
models by 2015, including 50,000 units
of the EV. The first Venucia model will
go on sale at beginning of next year.
The EV in 2015 will officially be an
indigenous Chinese product.
Knowledge & networking
SEPT
IGEM 2011 (2nd International Greentech and Eco Products
Exhibition & Conference Malaysia)
7th-10th September 2011
KLCC, Kuala Lumpur
www.igem.com.my/2011
International Green Building Conference (IGBC) 2011
13th-16th September 2011
Suntec City, Singapore
www.sgbw.com.sg
Build Eco Xpo (BEX) Asia 2011
14th-16th September 2011
Suntec City, Singapore
www.bex-asia.com
3rd International Conference on World Class Sustainable Cities
(WCSC) 2011
20th September 2011
Sime Darby Convention Centre, Malaysia
www.pam.org.my/events/events2011/Leaflet_as_at_5_July_2011.pdf
Electric, Power & Renewable Energy Indonesia 2011
21st-24th September 2011
Jakarta International Expo Kemayoran, Indonesia
www.pamerindo.com/events/4
Philippines government asked
to defer renewable energy
Philippines’
biggest power
distributor
Manila
Electric Co
(Meralco)
has asked
the Aquino
administration to defer renewable energy
(RE) generation until costs drop to
levels close to grid parity with conventional
sources. High generation costs
lead to high power prices which burden
consumers, it says. Meralco supports
the National Renewable Energy
Board’s position for higher installation
targets for run-of-river hydropower
and biomass, with their relatively lower
generation cost compared to other
RE sources. Based on the Department
of Energy’s new targets, only 50 MW
would be allowed for solar facilities;
200 MW for wind; 10 MW for ocean;
250 MW for hydro; and 250 MW for
biomass. The initial targets were 100
MW for solar; 220 MW for wind; 10
MW for ocean; 250 MW for hydro; and
250 MW for biomass. These targets
are part of the petition for feed-in-tariff
rates submitted last May.
(Source: Philippine Daily Enquirer)
OCT
2nd Annual Green Tech Asia
26th-27th September 2011
Kuala Lumpur, Malaysia
www.comfori.com/<strong>green</strong>tech
Renewable Energy World Asia 2011
27th-29th September 2011
KLCC, Malaysia
www.renewableenergyworld-asia.com/index/conference-information.
html
3rd Annual Sustainable Cities 2011
27th-30th September 2011
Pan Pacific Hotel, Singapore
www.sustainablecitiesasia.com
All-Energy Australia Exhibition & Conference 2011
12th-13th October 2011
Melbourne Convention & Exhibition Centre, Australia
www.all-energy.com.au
China Wind Power
19th-21st October 2011
New CIEC, Beijing, China
www.chinawind.org.cn/home.html
Singapore International Energy Week 2011
31st October-4th November 2011
Suntec & Marina Bay Sands Convention & Exhibition Centre, Singapore
http://siew.sg/
4th EV Battery Forum – Asia
8th-10th November 2011
Shanghai, China
http://www.evbatteryforum.com/
5% discount for
GPA subscribers
10% discount for
GPA subscribers
Visit www.<strong>green</strong>purchasingasia.com for the latest event listings
Green Purchasing Asia is a media partner
•

01 2010 GLOBAL ECOLABEL MONITOR
Green Economy and
Green Jobs in China:
Current Status and
Potentials for 2020
Jiahua Pan, Haibing Ma and Ying
Zhang; Editor: Lisa Mastny
Worldwatch Institute
worldwatch report 185
Green Economy and
Green Jobs in China
Current Status and
Potentials for 2020
jiahua pan, haibing ma, and ying zhang
China’s average annual GDP
growth of 10% over the
last 30 years – among the
fastest in the world – was
not achieved without major
ecological sacrifices. According
to “Green Economy
and Green Jobs in China”,
a 36-page report published
in July, the World Health
Organisation listed seven
Chinese cities, including
Beijing, among the ten
most polluted places in the
world in 2008. China’s State
Environmental Protection
Administration (SEPA) estimates
that environmental
damage costs China roughly
10% of its GDP in 2005, and
China passed the United
States in 2006 to become
the world’s largest emitter of
CO ² from industrial sources.
In the past decade,
however, China has increasingly
prioritised <strong>green</strong> development
in leading economic
sectors and is also banking
on this to expand employment.
“Green Economy
and Green Jobs in China”,
subtitled “Current Status
and Potentials for 2020”, examines
<strong>green</strong>ing activities in
three key sectors of China’s
economy – energy, transportation,
and forestry – and
states with confidence that
at least 4.5 million <strong>green</strong>
jobs can be expected to
come out of these industries
by 2020.
The findings of this
study, dubbed “the most
thorough effort known to
date to explore China’s
<strong>green</strong> jobs potential” could
help counter the common
contention by <strong>green</strong> policy
critics that environmentfriendly
drives would harm
the job market. Although
China’s official urban unemployment
rate is under 5%,
some sources say it reached
9.4% in 2008. Amid these
worrying figures, however,
the report projects that
proper implementation of
<strong>green</strong> development policies
can be expected to yield the
following positive outcomes
between 2011 and 2020:
• Solar PV industry to create
an average of 6,680 direct
jobs annually
• Wind power industry to
generate some 34,000
<strong>green</strong> jobs annually (it
provided an average of
40,000 direct <strong>green</strong> jobs
annually from 2006 to
2010)
• An additional 220 million
new vehicles, 16.7 million
of those being either
hybrids or EVs produced
by China
• High-speed rail could
create an average 230,000
jobs each year
• Beijing’s urban rail system
alone could create
437,000 jobs each year
• Forestation sector could
offer as many as 1.1 million
direct and indirect
jobs annually (it employed
as many as 1.8 million
full-time workers in 2010
alone)
The report comprises a
summary; a general chapter
on China’s move to <strong>green</strong>; a
section each on <strong>green</strong>ing the
energy sector, transportation
and sustainable forest management;
recommendations
on accelerating the <strong>green</strong>
transition; and finally, extensive
endnotes and an index.
The official summary of this
report is available online and
the complete publication
can be bought for US$12.95
in print paperback or PDF at
http://www.worldwatch.org/
node/8677
The Global Ecolabel
Monitor 2010
World Resources Institute and
Big Room Inc
GLOBAL 2010
ECOLABEL
MONITOR
TOWARDS TRANSPARENCY
The Global Ecolabel Monitor
2010 report and the ecolabelindex.com
website are
free resources produced to
help companies and consumers
navigate, evaluate
and compare the “<strong>green</strong>”
claims of environmental
certifications and labels for
food and consumer products.
The market for products
bearing ecolabels is
huge and growing. According
to the report, over a
third to half of US consumers
say they would pay a
premium for eco-friendly
products, while the 2009
Carbon Trust study found
that 44% of UK consumers
want more information
on companies’ <strong>green</strong>
efforts, but 70% are not
confident about identifying
environmentally responsible
companies.
In November 2009,
World Resources Institute
(WRI) and Big Room Inc
invited over 340 ecolabels
in 42 countries to complete
a survey of 66 questions
ranging from certification
criteria to funding sources.
More than 113 ecolabel
programmes participated in
the survey while more than
half could not be reached
or opted not to participate.
In June 2010, the results of
this survey were published
on the WRI website and incorporated
into a searchable,
still-expanding database at
the online Ecolabel Index.
The Global Ecolabel
Monitor 2010 reports that
92% of the programmes
surveyed require some
verification before awarding
an ecolabel, while others
require registration but no
certification. Of the former,
66% require third-party certification
to avoid conflicts
of interest. Programmes run
by non-profits generally had
more rigorous requirements,
such as site visits, audits
and third-party certifications.
Less than a third of the
ecolabels surveyed regularly
monitor environmental and
social impacts of their certification,
while more than
21% have developed plans
to study impacts for the first
time.
Over half of the ecolabels
surveyed were difficult
to reach or uncooperative
when asked about core
metrics, while less than 30%
of ecolabels recognise or are
recognised by other labelling
organisations, indicating the
need for improved transparency
and more resources for
programme support services.
The PDF report is available
for free download at
www.wri.org/publication/
global-ecolabel-monitor
while the online ecolabel
database can be accessed at
www.ecolabelindex.com
•