FGV Annual Report 2016

FELDA GLOBAL VENTURES HOLDINGS BERHAD 72 discharge limit. Despite stringent requirements, there are occasions when the concentration of BOD exceeds regulatory limits, especially during high crop seasons when mills process FFB beyond their stipulated capacity. We are aware that this may occur at some of our mills and we are looking at ways to ensure that our discharge limits are always well within safe levels. MANAGING CLIMATE CHANGE AND GREENHOUSE GAS (GHG) EMISSIONS When peat is developed for agriculture, land transformation anddrainage leads to peat oxidation and a higher frequency of fires, resulting in an increase in GHGemissions and carbon loss. The easiest way to limit Carbon Dioxide (CO 2 ) and other GHG emissions is to avoid the development of oil palm plantations on peat by refraining from developing plantations in areas with significant quantity of peat. In line with this stipulation, FGV Palm Upstream Cluster has not acquired any new land containing a significant amount of peat (area of peat not more than 20% of the total land parcel) in 2016.* TheGroup is committed to actively pursue opportunities to reduce its greenhouse gas emissions through its operational approaches to manage and report its carbon footprint. FGV targets to reduce its GHG emissions by 25% from our baseline year of 2014 by 2020. The majority of our emissions are in the form of biogas, which naturally forms when POME decomposes in the absence of oxygen. Biogas is potentially hazardous and contributes to climate change owing to its composition comprising mainly methane (50-75%) and carbon dioxide (25-45%). The capture of biogas from POME is, therefore, a clear priority for us in mitigating and reducing our overall GHG emissions. FGV is presently the single largest plantation owner of biogas plants in the world, with a total of 25 biogas plants in our stable. In 2016, our data shows that our biogas plants have managed to reduce 87,429MT* of CO 2 equivalent in 15 biogas plants. Our CO 2 reduction efforts over the past four (4) years are illustrated below. REPORTING ON WHAT MATTERS Inaddition to reducing theamount ofGHG that ourmills emit into theenvironment, the biogas plants are reducing GHG emissions arising from the combustion of fossil fuels by generating electricity for domestic use. Two (2) of our biogas capture plants in our palm oil mills in FPI Umas and FPI Serting Hilir have successfully generated electricity for the local area since 2013. These plants can generate up to a maximum of 1.2 megawatts of electricity. In Umas, the electricity is channelled to residential areas, schools, offices and commercial complexes. Umas residents, prior to the construction of the plant, dependedonpowergeneratedfromdieselgenerators.Meanwhile,theelectricity generated by the Serting Hilir plant is being fed back to the national grid. Our research on biogas has led to the establishment of the first commercial- scale palm-based Bio-Compressed Natural Gas (Bio-CNG) plant in Sg. Tengi, Kuala Kubu Baru, Selangor. A collaboration between Felda Palm Industries Sdn Bhd (FPI), the Malaysia Palm Oil Board (MPOB) and Sime Darby, the plant demonstrates that biogas can be used on a commercial scale producing 80,000 million BTUs of Bio-CNG annually. Bio-CNG is a viable alternative to fossil fuels and commenced commercial production for its first customer in April 2016. TOTAL MONITORED CARBON DIOXIDE EMISSION REDUCTIONS FOR 2013 - 2016 70,000 30,000 90,000 60,000 20,000 80,000 40,000 50,000 10,000 0 2013 2014 2015 2016 Total monitored CO 2 emission reduction (mt) 35,411 68,695 72,814 87,429 Year Bio-CNG plant in Sg. Tengi. Our efforts to reduce GHG emissions also extends to R&D on other by-products of the CPO production process. These include: • Converting EFB into pellets that can be used as renewable fuel for firing steam boilers • Developing biomass plants that utilises treated EFB • Developing palm fibre that can be used for industrial applications and to produce bio-oil OPEN BURNING As a planter, FGV abides by the Environmental Quality Act 1974 and all applicable local laws and regulations in jurisdictions which FGV operates to ban open burning. FGV does not practise open burning for any purpose except to manage the outbreak of pest and disease as specified in 'Guidelines for the Implementation of the ASEAN Policy on Zero Burning 2003'. SUSTAINABILITY STATEMENT ENVIRONMENT STEWARDSHIP * This data point has been independently audited. Please refer to our Independent Assurance Report on pages 355-356.