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Instead of spraying insecticides, SKG grows plants such as Antigonon leptopus and Turnera subulata, which attract pest predators like wasps, reducing insecticide use by 40%.
Palm oil is increasingly becoming a commodity in demand globally. It has the highest yield among vegetable oils, accounting for nearly 35 per cent of global vegetable oil while using less than 10 per cent of the land allocated for all crops. Its versatility and efficiency makes it essential for global food security and economic development.
However, sustainability concerns persist. Recognising this, the Malaysian palm oil industry is working to transition into a zero-waste circular economy — raising awareness among smallholders, adopting renewable energy and exploring carbon credit trading.
A significant shift is underway, driven by both federal and private entities. While the government maintains a cap of 6.5 million hectares on oil palm cultivation, its replanting push is complemented by private and State-backed firms racing against the European Union Deforestation Regulation (EUDR) deadline. Many plantations are now integrating renewable energy into their operations to support decarbonisation and Malaysia’s net zero aspirations.
Sawit Kinabalu Group (SKG), the State government’s investment arm in Sabah’s oil palm sector and the maker of Sayang brand cooking oil, is spearheading zero-waste practices. The group has implemented circular strategies to reuse palm oil by-products like empty fruit bunches (EFBs), palm oil mill effluent (POME), and decanter cake. These are converted into organic fertiliser and mulch. Biogas is extracted from POME, and four of SKG’s seven oil mills now meet just about 10 per cent of their energy needs using biofuel. “We plan to become net zero by 2050,” said Nazlan Mohamad, SKG’s Chief Sustainability Officer.
Innovations in pest management are also taking root. Instead of spraying insecticides, SKG grows plants such as Antigonon leptopus and Turnera subulata, which attract pest predators like wasps, reducing insecticide use by 40 per cent. Another State-owned plantation firm, SD Guthrie (SDG), employs similar techniques — planting insectary plants and housing owls to control rat populations, which damage oil palm bunches and shoots. “We’ve built 50 owl houses per 1,000 hectares on our farms,” an SDG official noted.
Fertiliser spraying robot at SD Guthrie’s farms
SD Guthrie is also pioneering the use of robotics in Malaysian plantations. In partnership with Braintree Technologies (Malaysia) and Earthsense (USA), it has developed two robots — one for fertiliser spraying and another for bunch evacuation. “We piloted the robots on 100 hectares and will soon test them on 1,000 hectares,” the official said. These machines cover about 15 hectares per day at a speed five times more than manual labour and promise significant labour savings. The company is moving from proof of concept stage to product development and expects to commercialise it by next year.
On the smallholder front, too, circular practices are visible. In Sabah’s Kinabatangan district, woman farmer Puteri Kasturi manages a modest 1.09-hectare oil palm farm. A few minutes away, another farmer, Muharram bin Sompo, has transformed a similar-sized plot into a lush and diversified farm. He intercrops with pineapple and ginger, processes fish bone waste into fertilizer and uses palm fronds, leaves and EFBs as mulch to enrich the soil.
EFBs neatly stacked for sun drying at a farm
Wild Asia, an impact-driven non-profit, is empowering smallholders by supplying biochar made from EFBs. The EFBs are dried in solar boxes and then undergo pyrolysis to produce biochar, which is then mixed with compost and distributed free to farmers. Wild Asia also educates farmers on intercropping, soil health, and sustainability. “We plan to start trading our carbon credits by the end of this year,” said Peter Chang, the organisation’s Operations Director. A carbon credit represents the right to emit one tonne of CO₂ or its equivalent, and entities that emit less can sell credits to others, offering a financial incentive to reduce emissions.
Some Malaysian oil plants are taking it further by using EFBs as feedstock for TG2 Black Pellet — an environmentally sustainable, drop-in replacement for coal. These initiatives not only reduce environmental impact and mitigate climate change but also lower production costs and create new revenue streams for growers and smallholders.
While the Malaysian Sustainable Palm Oil (MSPO) certification already promotes sustainable practices such as minimising deforestation and improving resource efficiency, incorporating carbon credit mechanisms could offer further incentives. Certified plantations that adopt energy-efficient technologies or launch reforestation projects can generate and trade carbon credits — supporting both profitability and meeting Malaysia’s climate targets.
(The writer was recently in Malaysia at the invitation of Malaysian Palm Oil Council)
Published on June 30, 2025
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