JS-SEZ can unlock RM3.5bil 'green gold' from palm waste
16/02/2026 (New Straits Times), Johor Baru - Johor may be drawing billions in data centre investments, but its real high-income opportunity lies in palm oil waste estimated to be worth RM3.5 billion annually, said the Johor-Singapore Special Economic Zone (JS-SEZ) Monitor founder.
The JS-SEZ Monitor is an independent platform that tracks and provides analysis on developments related to the Johor-Singapore Special Economic Zone.
Its founder Nasser Ismail was formerly Iskandar Regional Development Authority strategic communications deputy head, and also had stint with the Tanjung Pelepas Port leading its property and free zone department.
Nasser said while hyperscale data centres dominate headlines, their highly automated operations generate limited high-skilled employment for locals compared to the untapped potential of biomethane derived from Palm Oil Mill Effluent (POME).
"Johor is sitting on what I call 'Green Gold'. We treat it like waste, but it is actually misallocated energy inventory," he said.
POME is the organic wastewater produced during palm oil processing.
Malaysia generates 68.83 million tonnes of it annually. When left in open ponds, it decomposes and releases methane (CH4), a greenhouse gas with a Global Warming Potential 80 times stronger than carbon dioxide over a 20-year period.
Malaysia is a signatory to the Global Methane Pledge, an international commitment to cut methane emissions by 30 per cent by 2030. Currently, POME is the country's second-largest methane source.
"Every hour these ponds are left to rot, they release fugitive emissions that undermine our climate commitments," Nasser said.
He argued that instead of viewing POME as a sanitation compliance issue under Environment Department rules, it should be treated as a strategic energy reserve.
A standard 60-tonne-per-hour palm oil mill can generate roughly 140,000 million British thermal units (MMBtu) of energy annually from captured biogas.
When upgraded to Bio-LNG, a liquefied biomethane purified to around 98 per cent methane content, it can fetch about US$26 per MMBtu in Singapore's bunkering market, the world's largest marine fuel hub.
"Nationally, this represents a prize of roughly RM3.5 billion a year," he said.
However, Nasser said domestic policy distortions are preventing mills from investing in high-grade upgrading facilities.
Raw biogas contains only about 60 per cent methane and requires purification to meet international Bio-LNG standards.
Yet domestic natural gas prices remain capped at around RM38 per MMBtu, which does not reflect the premium value of certified green fuel.
"This is the subsidy trap. If a mill invests in world-class upgrading technology, it is forced to sell into a domestic market that does not recognise the green attribute. The internal rate of return simply does not justify the capital expenditure," he said.
He proposed that the JS-SEZ include a dedicated Biomethane Aggregation Framework allowing export parity pricing.
This would mean green biomethane projects designated for export would be exempt from domestic price caps.
Singapore's maritime sector, which is pursuing Net Zero carbon targets, is actively seeking low-carbon marine fuels such as Bio-LNG.
"The JS-SEZ can act as the export valve for the southern peninsula. Instead of drilling for new gas, we just need to stop letting our current resource destroy the atmosphere," Nasser said.
He added that unlike data centres, which he described as "automated real estate", biomethane development would distribute wealth across Johor's rural heartland.
Biomethane plants would be located at palm oil mills in plantation districts, creating demand for Technical and Vocational Education and Training (TVET)-certified workers, including gas processing engineers, safety officers and instrumentation technicians.
"This is how you create a true high-income multiplier. Gas processing creates skilled jobs in Felda settlements and plantation towns, not just in cyber-corridors," he said.
Nasser warned that failure to decarbonise palm oil production could expose Malaysia to trade risks such as the European Union's Carbon Border Adjustment Mechanism, which imposes carbon-related costs on imports.
"If we do not clean up the upstream process, we risk pricing ourselves out of premium markets," he said.
He said Johor could position itself as the national leader under Malaysia's National Energy Transition Roadmap without requiring direct state funding.
"We have the feedstock. We have the technology. We have the international mandate. The only missing piece is policy clarity to stop the rot and start the recovery," he said.