This article first appeared in The Edge Malaysia Weekly on June 26, 2023 - July 2, 2023

Converting algae into biofuel is a technology that some of the oil majors have deployed to reduce carbon emissions. A few, including ExxonMobil, have since ceased doing so after making little progress.

However, Techna-X Bhd, a company that provides technology services to food and beverage operators, has entered into a tripartite venture to develop a microalgae farm with the view of producing algae biofuel.

In an announcement, the company stated that the venture — which is expected to cost some US$120 million (RM561 million) — will generate some US$40 million in revenue. Techna-X’s balance sheet and market capitalisation of RM33 million can hardly support such a large venture.

The company has stated that the financial commitment towards the project is being supported by one of the partners. Techna-X’s partners are MYKO Global Sdn Bhd and RTA E&C Sdn Bhd. According to the announcement, MYKO has committed to arrange for 98% of the US$120 million required for the venture while Techna-X, through a subsidiary, need only provide the remaining 2% of the facility via a bank guarantee.

MYKO will provide the technology and patents to manage the production facility, which is expected to generate a revenue of US$40 million when it is up and producing crude algae oil. RTA E&C is the engineering, procurement, construction and commissioning contractor for the project.

Based on the announcement, Techna-X’s role in the venture is minor. The major parts of the project, such as the technology and operations, are being undertaken by MYKO. Even the bulk of the financing is to be arranged by MYKO.

So, why does MYKO need Techna-X for the venture?

The push to make biofuels from algae is not new. For decades, ExxonMobil had championed the technology to convert algae into biofuel as part of its initiative to reduce carbon emissions. But the technology went nowhere and Exxon quietly dropped the programme from its climate sustainable initiatives.

Will Techna-X have better luck with the initiative?

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