1. PRACTICAL ISSUES FOR CDM PROJECTS IMPLEMENTATION IN MALAYSIA EU – Malaysia Biomass Stakeholders Knowledge Exchange Session Kuala Lumpur, Malaysia 28 April 2010

2. Contents 1. Introductory details 2. Issues and Challenges of biomass based RE projects 3. Practical issues for biomass CDM projects 4. YTL- SV Carbon Sdn. Bhd. – A brief profile

3. Biomass in Malaysia Most important biomass (=abundantly available) in Malaysia is Palm biomass Oil palm industry is one of the major industries in Malaysia. Second largest palm oil producer in the world Largest palm oil exporter in the world – to more than 150 countries 17.56 million tons of CPO produced with earnings of about RM 50 billion (about US$ 15.15 billion) in 2009

4. Malaysian palm oil industry – 2009 Key data Region No. of mills & Cap (Mil. tons) Plantation (Mil. Ha) FFB processed (Mil. tons) Peninsular248 (54.85)2.4950.78 Sabah120 (29.89)1.3625.52 Sarawak47 (10.66)0.849.41 Total415 (95.40)4.6985.71

5. Palm Biomass production Palm Kernel Shell: 5 - 6% of FFB Mesocarp fibre:12-13% of FFB Empty Fruit Bunch :22-23% of FFB Effluent (POME):60- 70% of FFB

6. Palm Biomass – Quantity & Quality Biomass Quantity (Million tons- avg ) Moisture content % Calorific value (GJ / ton) PKS4.711217.3 Fibre10.7135- 3711.1 EFB19.2865-675.3 POME (biogas) 55.71 (1400 mill. m 3 ) 98 - 9920 MJ/ m 3

7. Potential and Development Electricity potential from biomass : 3,700 MW Electricity potential from surplus palm biomass : 1,100 MW Installed cap. connected to grid : 31.7 MW Approved capacity for installation : 196.85 MW

8. 2. Issues and Challenges of biomass based RE projects

9. Technical Challenges - 1 Biomass based CDM projects Most of “good” biomass consumed in the present “low efficient” cogeneration system in POMs. Only difficult biomass “EFB” is available “Difficult biomass” : bad combustion properties high moisture content,, high silica, highly abrasive, high operation and maintenance cost No local supply of higher pressure boilers and better efficiency turbines Expertise to run higher efficient systems not locally available – high O&M cost

10. Technical Challenges - 2 No long term fuel supply agreement Fluctuation in crop and therefore availability of fuel Remote location of palm oil mills to grid – difficulties in execution of transmission line, high cost, higher transmission losses, chances for electricity theft, etc., Off take capacity of local substations; need to take to higher voltage substations which are still further

11. Technical Challenges - 3 Biogas based grid connected RE plant Biogas technology yet to be mastered in SE Asia – Not enough operational experience in POME! H 2 S levels in the biogas – not enough experience with POME Gas engines not available locally – have to be imported - Spare parts, O&M ….. Fluctuation in Production – Impact on anaerobic reactions and gas quality !! Relatively “small” power – does not interest TNB

12. Commercial Challenges Low power purchase tariff No long term fuel supply assurance Tariff fixed with no differentiation for source of energy No proper escalation in purchase tariff – maintenance cost increases every year, but tariff does not increase Local banks not familiar with the projects and consider these as risky investments No government support for transmission line and other infrastructure Increasing competing use of biomass

13. 3. PRACTICAL ISSUES FOR BIOMASS CDM PROJECTS

14. Practical issues for biomass CDM projects “Leakage” calculations Long term fuel supply agreement No guarantee of price on long term basis Limited resources of DOEs Monitoring issues – Need to monitor several parameters LoA for a limited period

15. 4.YTL – SV Carbon Sdn. Bhd - A profile

16. Overview of YTL Group, Malaysia Malaysia’s leading infrastructure conglomerate with investments in power, utilities, cement manufacturing, property development, technology, transportation and hotels and leisure Combined market capitalisation of over RM30 billion on Bursa Securities Malaysia Berhad Global recognition for management: Asian Wall Street Journal Top 5 Most Admired Companies 2006 Forbes Global 2000 in 2005 Far Eastern Economic Review Asia’s Leading Companies in 2000 RM mn200620072008 Revenue5,4966,0156519 Profit before taxation119013401376 Financial Highlights

17. YTL – SV Carbon Sdn. Bhd. Subsidiary of YTL Corporation Bhd. The largest CDM Advisory company in Malaysia About 50 CDM projects in our portfolio out of which 15 are already registered Has experience with CDM projects of :  Palm biomass based cogeneration/power plants  Palm waste based composting plants  Palm waste based methane recovery plants  Landfill Gas recovery projects  Waste heat recovery based power plants  Hydroelectric projects  Energy Efficiency projects  Fuel substitution for cement plants …..And many more ………..

18. YTL –SV CARBON EXPERIENCE 4 Registered for POME biogas plants 11 Projects Registered for Co -composting POME and EFB 1 palm biomass based power plants Registered 3 Requesting for registration for Co -composting POME and EFB 5 palm biomass based power plants under validation 5 POME based biogas projects under validation 3 Palm oil biomass composting projects 5 Hydro Projects at validation 1 Energy Efficiency project for a Tannery in Vietnam 1 new methodology developed/ approved by CDM Executive Board & PDD at validation stage for use of biomass waste (EFB) for pulp and paper production in Malaysia 1 PD under development for Waste Heat Recovery project in Cement Industry in China 1 Landfill gas recovery project in China 1 Report for Assessment of all CDM projects in palm oil mills of a large oil palm group.

19. Looking forward to serving you! THANK YOU!! Sure, you have some questions!!! ILANGO S Bharathi.G. YTL –SV CARBON SDN.BHD. Lot 10 Shopping Centre, 50, Jalan Sultan Ismail Kuala Lumpur, MALAYSIA ilango@ytl.com.my ilango@ytl.com.my Mobile : +6 017 2026456