Although Johor has recently captured media attention for attracting multi-billion ringgit investments in data centers, experts believe the state’s true “wealth secret” may not lie in cold, automated server rooms—but in the long-overlooked palm oil waste.
JS-SEZ Monitor founder Nasser Ismail recently highlighted that Johor is sitting on a “green gold mine” valued at up to RM3.5 billion annually.
He emphasized that if Johor can leverage the Johor–Singapore Special Economic Zone (JS-SEZ) to convert palm oil mill effluent (POME) into high-value energy, the economic multiplier effect could surpass that of highly automated data centers, which generate limited employment.
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Nasser, a former senior executive at the Iskandar Regional Development Authority (IRDA) and head of the Port of Tanjung Pelepas (PTP) division, has a deep understanding of Johor’s industrial structure.
He notes that data centers are essentially automated real estate, contributing minimally to high-tech local employment. In contrast, capturing methane (CH₄) from POME and refining it into Bio-LNG can reach deep into Johor’s rural heartlands:
Technology to Rural Areas: Biomethane plants would be located near Felda settlements and palm oil mills, directly creating job opportunities for TVET (Technical and Vocational Education and Training) talent in the region.
Malaysia generates approximately 68.83 million tonnes of POME annually. If stored in open ponds, the released methane has 80 times the 20-year global warming potential of CO₂, creating both an environmental and energy misallocation problem.
Nasser calculates that a standard 60-ton-per-hour palm oil mill can produce roughly 140,000 MMBtu of energy per year. If refined to 98% pure Bio-LNG, it could sell for $26 per MMBtu in Singapore—the world’s largest bunkering hub.
If the opportunity is so great, why is investment slow? Nasser points to a core contradiction: distorted pricing.
Price Cap: Domestic natural gas prices are capped at approximately RM38/MMBtu.
Mismatch in Value: High capital expenditure for refining technology cannot capture a “green premium” in the domestic market.
Low IRR: Lack of export price benchmarks makes it difficult for palm mills to justify the capital investment (Capex).
To break this bottleneck, Nasser proposes establishing a Biomethane Aggregation Framework under JS-SEZ.
This would allow certain export projects to bypass domestic price caps, enabling market-based export pricing. With Singapore’s shipping industry aggressively pursuing net-zero carbon, demand for low-carbon fuels like Bio-LNG is urgent. Johor is well-positioned geographically to become a regional energy export leader.
With trade barriers such as the EU’s Carbon Border Adjustment Mechanism (CBAM) approaching, decarbonization of the palm oil industry is no longer optional—it is a condition for survival.
“We have the raw materials, the technology, and international demand; what we lack is clear policy guidance,” Nasser stressed. If successfully transformed, Johor could lead the national energy transition roadmap (NETR) and turn “waste” into real wealth driving prosperity across the state, without relying on direct government funding.
Singapore