Sime Darby Plantation and Mitsui Engineering and Shipbuilding will form a joint venture to construct and operate a bioethanol demonstration plant in Malaysia, according to a statement released by the firms this week.
The plant will be the first in the world to generate bioethanol from empty fruit bunches, a by-product of the palm oil production process.
It will be built next to Sime Darby Plantation's Tennamaram palm oil mill at Bestari Jaya, Selangor.
When operational, the plant will process 1.25 metric tonnes of empty fruit bunches per day using its hydrothermal pre-treatment and enzymatic hydrolysis technology.
The firms will use data from the project to evaluate the feasibility of commercial-scale production of bioethanol from the bunches.
The long-term, stable supply of plentiful, low-cost feedstock is the key factor in the commercial production of bioethanol.
Malaysia and Indonesia produce approximately 90 per cent of the world's palm oil, and their palm oil mills produce 40 million metric tons of empty fruit bunches annually.
Anthony Dass, executive vice-president of Sime Darby Plantations, said the project has the dual benefits of tackling waste and producing biofuel.