Field-Programmable Gate Arrays (FPGA) Adoption in Biofuel Processing: The Role of Policy Incentives, Financial Mechanisms, and Strategic Management

Field-Programmable Gate Arrays (FPGA) Adoption in Biofuel Processing: The Role of Policy Incentives, Financial Mechanisms, and Strategic Management

Izhal Abdul Halin¹, Noreffendy Tamaldin², Mohd Effandi Yusoff³, Jamal Abdul Nassir Shaari⁴, Alias Abdullah⁵, Irwan Ibrahim^6*

¹Department of Electrical and Electronic Engineering, Faculty of Engineering, University Putra Malaysia, Selangor, Malaysia

²Center for Advanced Research on Energy, Care University Technical Malaysia Melaka, UTeM, Melaka

³Department of Accounting and Finance, Faculty of Management, University Technology Malaysia.

⁴Faculty of Economics and Muamalat, University Sains Islam Malaysia,

⁵Department of East Asian Studies Faculty of Arts and Social Sciences, University of Malaya, 50603 Kuala Lumpur

⁶Department of Technology and Supply Chain Management Studies, Faculty of Business and Management, UiTM Puncak Alam, Selangor, Malaysia.

^*Corresponding author

DOI: https://dx.doi.org/10.47772/IJRISS.2025.905000228

Received: 07 May 2025; Accepted: 13 May 2025; Published: 07 June 2025

ABSTRACT

The global transition toward sustainable energy necessitates innovative financing mechanisms to support advanced technologies in biofuel production. This qualitative study explores the barriers and opportunities for adopting Field-Programmable Gate Arrays (FPGAs) in Malaysia’s biofuel sector, focusing on technological financing, policy frameworks, and strategic management. FPGAs offer significant potential for optimizing biofuel processes, including real-time monitoring and energy efficiency improvements, yet their adoption remains limited due to high capital costs, misaligned policies, and fragmented financing strategies. Through semi-structured interviews with 20 stakeholders—policymakers, financial analysts, engineers, and corporate executives—and document analysis, the study identifies three critical challenges: (1) collateralization gaps in financing FPGA technologies, (2) policy lags favoring conventional renewable projects over hardware innovations, and (3) insufficient strategic roadmaps for technology integration. The findings reveal that firms with formalized adoption plans secure 2.3× more funding, underscoring the mediating role of strategic management. The study advances theoretical insights by integrating Resource-Based View, Technology Acceptance Model, and Institutional Theory, demonstrating how financial access, stakeholder perceptions, and policy environments collectively influence FPGA adoption. Practical recommendations include introducing FPGA-specific grants, enhancing tax incentives, and fostering industry-academia collaborations to de-risk investments. By bridging the gap between technological potential and financial feasibility, this research contributes to academic discourse on renewable energy financing while offering actionable strategies for policymakers and industry leaders to accelerate Malaysia’s sustainable energy transition.

Keywords: Technological financing, economic policy, field-programmable gate array (FPGA), strategic management, biofuel technology, sustainable energy

INTRODUCTION

The global transition toward sustainable energy has intensified the need for innovative financing mechanisms that support cutting-edge technologies in biofuel production (IEA, 2023). As nations strive to meet climate commitments under the Paris Agreement, biofuels have gained prominence as a key renewable energy source, particularly in transportation and industrial applications (IRENA, 2022). However, the scalability and efficiency of biofuel production remain hindered by technological limitations, prompting the exploration of advanced computational solutions such as Field-Programmable Gate Arrays (FPGAs) (Zhang et al., 2022). FPGAs, known for their high-speed processing, reconfigurability, and energy efficiency, offer significant potential in optimizing biofuel conversion processes, including real-time monitoring, adaptive control, and predictive maintenance (Kumar & Sharma, 2021). Despite these advantages, the adoption of FPGA-enhanced biofuel systems faces financial and policy-related barriers, particularly in developing economies like Malaysia, where investment in renewable energy technologies remains inconsistent (Ministry of Energy and Natural Resources Malaysia, 2021).

Malaysia, as one of the world’s largest palm oil producers, has a strong biofuel feedstock base, yet struggles with technological inefficiencies and financing constraints in scaling advanced biofuel production (Hassan et al., 2020). While the government has introduced green financing initiatives, such as the Green Technology Financing Scheme (GTFS), these programs often prioritize large-scale infrastructure projects over hardware-driven innovations like FPGA integration (Bank Negara Malaysia, 2022). Additionally, private sector investment in biofuel R&D remains limited due to perceived high risks and long payback periods (Tan & Lim, 2023). This financing gap underscores the need for strategic management approaches that align economic policies, technological innovation, and investment strategies to facilitate FPGA adoption in biofuel processing plants.

This study examines how technological financing strategies—coupled with economic policies and strategic management—can accelerate the integration of FPGA-based biofuel innovations in Malaysia. Using a qualitative research approach, the paper explores stakeholder perspectives—including policymakers, financial institutions, industry leaders, and engineers—on funding barriers, policy effectiveness, and industry readiness for FPGA adoption. The findings aim to inform policymakers on optimizing green financing schemes, guide investors in assessing risk-return profiles of FPGA technologies, and assist corporate leaders in strategic decision-making for sustainable energy investments. By bridging the gap between technological potential and financial feasibility, this research contributes to academic discourse on renewable energy financing while offering practical insights for Malaysia’s biofuel sector.

BACKGROUND OF THE RESEARCH

Malaysia has positioned itself as a key player in the global renewable energy transition, particularly through its biofuel sector, as part of its commitment to reduce carbon emissions by 45% by 2030 under the Paris Agreement (Ministry of Energy and Natural Resources Malaysia [KeTSA], 2021). As the world’s second-largest producer of palm oil, Malaysia possesses a strategic advantage in biodiesel production, with palm oil methyl ester (PME) being a primary feedstock for biofuel (Hassan et al., 2020). The government has actively promoted biofuel blending mandates, requiring B20 biodiesel (20% palm biodiesel, 80% diesel) in the transportation sector, with plans to expand to B30 by 2025 (Malaysian Palm Oil Board [MPOB], 2023). However, despite these policy-driven initiatives, the efficiency and scalability of biofuel production remain constrained by technological limitations, particularly in process optimization and energy consumption (Tan et al., 2022).

One of the most promising technological advancements in biofuel processing is the integration of Field-Programmable Gate Arrays (FPGAs), which offer real-time monitoring, adaptive control, and energy-efficient automation (Zhang et al., 2022). FPGAs are reconfigurable hardware devices that outperform traditional microprocessors in high-speed data processing, making them ideal for optimizing biofuel fermentation, distillation, and quality control (Kumar & Sharma, 2021). Studies have demonstrated that FPGA-based control systems can reduce energy consumption by up to 30% in biofuel plants while improving yield consistency (Lee et al., 2023). However, despite these benefits, the adoption of FPGA-enhanced biofuel technologies in Malaysia remains low, primarily due to high initial investment costs, lack of specialized financing, and limited technical expertise (Abdullah & Rahman, 2023).

Malaysia has introduced several green financing initiatives to support renewable energy projects, including the Green Technology Financing Scheme (GTFS), which provides low-interest loans and grants for sustainable technologies (Bank Negara Malaysia, 2022). Additionally, the Malaysia Digital Economy Corporation (MDEC) has encouraged Industry 4.0 adoption, including smart manufacturing and automation in biofuel production (MDEC, 2023). However, these financing schemes have primarily focused on large-scale solar and hydropower projects, with limited emphasis on hardware-driven innovations like FPGAs (Ong et al., 2023). Furthermore, private sector investment in biofuel R&D remains cautious, as investors perceive high risks and uncertain returns due to fluctuating crude oil prices and policy inconsistencies (Chen & Lim, 2023).

The lack of tailored financial mechanisms for FPGA adoption in biofuel plants represents a critical gap in Malaysia’s renewable energy strategy. While venture capital and public-private partnerships (PPPs) could play a pivotal role, there is minimal research on how these financing models can be optimized for FPGA-based biofuel innovations (Ibrahim et al., 2023). Additionally, the regulatory framework for green financing does not explicitly address hardware acceleration technologies, creating uncertainty for investors and biofuel producers (Yusoff et al., 2023). This study seeks to address these gaps by examining:

How existing financing mechanisms in Malaysia support (or hinder) FPGA adoption in biofuel production.

The role of economic policies in incentivizing investment in FPGA-enhanced biofuel systems.

Strategic management approaches that can improve financing accessibility for sustainable energy technologies.

By analyzing these dimensions, this research contributes to policy formulation, investment strategies, and technological adoption in Malaysia’s biofuel sector, ultimately supporting the country’s sustainable energy transition.

Problem Statement

Malaysia’s biofuel sector, while possessing strong production capacity through its extensive palm oil industry (MPOB, 2023), faces critical challenges in adopting advanced Field-Programmable Gate Array (FPGA) technologies that could significantly enhance processing efficiency and sustainability (Zhang et al., 2022). Three fundamental problems hinder progress:

Limited Access to Specialized Financing for FPGA-Integrated Biofuel Technologies

The high capital expenditure required for FPGA implementation (estimated at 30-50% higher than conventional systems) creates a significant barrier to adoption (Abdullah & Rahman, 2023). Current financing mechanisms, including Malaysia’s Green Technology Financing Scheme (GTFS), predominantly support conventional renewable energy projects like solar farms, while offering limited provisions for hardware-based innovations in biofuel processing (Ong et al., 2023). Financial institutions perceive FPGA technologies as high-risk investments due to:

• Longer payback periods (5-7 years) compared to software solutions (Bank Negara Malaysia, 2022)
• Lack of standardized valuation models for FPGA applications in biofuels (Tan et al., 2022)
• Limited case studies demonstrating successful commercial deployment in Malaysia (Ibrahim et al., 2023)

Mismatches Between Economic Policies and Industry Needs

While Malaysia has established progressive biofuel blending mandates (B20 implementation, moving toward B30), policy frameworks fail to address the technological modernization required to achieve these targets efficiently (KeTSA, 2021). Key policy gaps include:

• Absence of tax incentives specifically for FPGA adoption in biofuel plants (Yusoff et al., 2023)
• Inconsistent R&D funding allocation, with only 15% of Malaysia’s biofuel research budget allocated to hardware optimization (Chen & Lim, 2023)
• Regulatory uncertainty regarding intellectual property rights for FPGA-based biofuel processes (MDEC, 2023)

Insufficient Strategic Management Approaches

Biofuel producers demonstrate limited capacity to integrate FPGA technologies into their long-term business strategies due to:

Lack of technical expertise in FPGA implementation and maintenance (Lee et al., 2023)

• Short-term financial planning that prioritizes immediate returns over technological upgrades (Hassan et al., 2020)
• Weak collaboration between academia, industry and financial institutions in developing FPGA solutions (Kumar & Sharma, 2021)

Research Focus

This study addresses these critical gaps by investigating:

Financing Mechanisms Analysis
“How do current financing structures in Malaysia support or hinder FPGA adoption in the biofuel industry?”

• Examination of debt financing limitations for hardware innovations
• Evaluation of alternative financing models (venture capital, public-private partnerships)
• Assessment of risk mitigation strategies for technology investors

Policy Enhancement Opportunities
“What economic policy modifications could better incentivize FPGA adoption?”

• Analysis of successful international models (e.g., Brazil’s FINEP program)
• Development of policy recommendations for hardware-focused incentives
• Exploration of regulatory frameworks for technology standardization

Strategic Management Solutions
“Which management practices can improve financial viability of FPGA technologies?”

• Identification of best practices in technology investment decision-making
• Proposal of collaborative R&D models between industry and academia
• Development of performance metrics for FPGA implementation success

The resolution of these problems holds significant implications for:

• Achieving Malaysia’s NDC targets through improved biofuel efficiency
• Enhancing global competitiveness of Malaysian biofuel exports
• Establishing Malaysia as a leader in sustainable energy technology innovation

Theoretical Framework

This study is grounded in three complementary theoretical perspectives that collectively explain the adoption, financing, and strategic management of FPGA technology in Malaysia’s biofuel sector. These theories provide a robust foundation for analyzing the technological, organizational, and institutional factors influencing FPGA integration.

Resource-Based View (RBV) Theory

The Resource-Based View (RBV), pioneered by Barney (1991), posits that firms achieve sustained competitive advantage by acquiring and effectively deploying valuable, rare, inimitable, and non-substitutable (VRIN) resources. In the context of this study, FPGA technology can be considered a strategic resource that enhances biofuel production efficiency, reduces energy consumption, and improves process automation (Zhang et al., 2022). However, as Abdullah and Rahman (2023) highlight, the financial barriers to FPGA adoption in Malaysia prevent firms from leveraging this technology as a competitive differentiator. RBV theory helps explain why only firms with access to specialized financing—such as government grants or venture capital—can capitalize on FPGA-driven efficiency gains, while others remain constrained by technological obsolescence (Tan et al., 2022). Furthermore, the theory underscores the need for strategic resource allocation in biofuel firms to ensure FPGA technologies are not merely acquired but optimally utilized to create long-term value (Kumar & Sharma, 2021).

Technology Acceptance Model (TAM)

The Technology Acceptance Model (TAM), developed by Davis (1989), examines how user perceptions of a technology’s usefulness and ease of use influence adoption decisions. In this study, TAM is applied to analyze stakeholder willingness—including biofuel producers, engineers, and investors—to adopt FPGA solutions (Lee et al., 2023). Research indicates that despite the demonstrated efficiency benefits of FPGAs, adoption in Malaysia remains low due to perceived complexity, high switching costs, and uncertainty about return on investment (Chen & Lim, 2023). TAM helps identify the cognitive and behavioral barriers that must be addressed through targeted training programs, demonstration projects, and financial incentives to enhance stakeholder confidence (Ibrahim et al., 2023). Additionally, the model suggests that perceived usefulness—such as energy savings and production yield improvements—must be clearly communicated to potential adopters to accelerate FPGA integration (Ong et al., 2023).

Institutional Theory

Institutional Theory, as articulated by DiMaggio and Powell (1983), emphasizes how external pressures—including government regulations, industry standards, and financial norms—shape organizational behavior. In Malaysia’s biofuel sector, policy inconsistencies, lack of standardization in green financing, and weak enforcement of sustainability mandates have created an environment where FPGA adoption is neither systematically encouraged nor rewarded (Yusoff et al., 2023). Institutional theory explains why, despite the technical viability of FPGAs, many firms hesitate to invest due to uncertain regulatory support and misaligned incentive structures (Bank Negara Malaysia, 2022). The theory also highlights the role of mimetic isomorphism, where firms delay FPGA adoption until industry leaders or competitors demonstrate success (Hassan et al., 2020). By applying institutional theory, this study explores how policy reforms, financial institution mandates, and industry consortiums could create a more conducive ecosystem for FPGA adoption (MPOB, 2023).

Integration of Theoretical Perspectives

The RBV, TAM, and Institutional Theory collectively provide a multi-dimensional framework for understanding FPGA adoption challenges. While RBV focuses on internal resource management, TAM addresses user perceptions, and Institutional Theory examines external pressures, their integration allows for a holistic analysis of the financial, technological, and policy-related barriers in Malaysia’s biofuel sector. This theoretical synergy informs the study’s research questions, methodology, and policy recommendations, ensuring that solutions consider both firm-level decision-making and macro-level institutional dynamics (KeTSA, 2021).

Conceptual Framework

This study’s conceptual framework establishes a causal pathway through which technological financing mechanisms influence FPGA adoption in Malaysia’s biofuel sector, mediated by strategic management practices. Grounded in the integration of Resource-Based View (RBV), Technology Acceptance Model (TAM), and Institutional Theory, the framework identifies three core constructs that collectively determine the successful implementation of FPGA technologies (Barney, 1991; Davis, 1989; DiMaggio & Powell, 1983).

Independent Variable: Technological Financing Mechanisms

The availability and structure of financing options serve as the foundational driver for FPGA adoption. Prior research indicates that venture capital, government grants, and green bonds play distinct roles in enabling technological upgrades in renewable energy sectors (Ong et al., 2023). In Malaysia, however, traditional financing models remain skewed toward large-scale infrastructure projects, leaving hardware-based innovations like FPGAs underfunded (Bank Negara Malaysia, 2022). The framework incorporates:

• Risk capital availability (venture capital, corporate investment)
• Public financing instruments (GTFS, R&D tax incentives)
• Alternative financing models (green bonds, crowdfunding)

These mechanisms directly affect firms’ ability to procure and implement FPGA systems, while also shaping investor confidence through policy-backed guarantees (Yusoff et al., 2023).

Mediating Variable: Strategic Management Practices

The relationship between financing and FPGA adoption is mediated by organizational strategies that determine how secured funds are allocated and utilized. Drawing from RBV theory, strategic resource management is critical to translating financial inputs into competitive technological advantages (Kumar & Sharma, 2021). Key mediating factors include:

• R&D investment prioritization (dedicated budgets for FPGA integration)
• Public-private partnerships (collaborations with universities, tech firms)
• Long-term innovation roadmaps (aligning FPGA adoption with sustainability targets)

Evidence suggests that Malaysian biofuel firms with structured technology adoption strategies are 2.3× more likely to secure financing for FPGA projects (Ibrahim et al., 2023). This mediation effect underscores the importance of managerial decision-making in bridging financial access and technological implementation.

Dependent Variable: FPGA Adoption Outcomes

The end-point variable captures measurable impacts of FPGA integration, assessed through:

• Process efficiency gains (reduced energy consumption, faster processing)
• Economic benefits (lower production costs, higher yields)
• Sustainability improvements (reduced carbon footprint per output unit)

Empirical data from pilot implementations show FPGA-enhanced plants achieve 18-22% higher energy efficiency compared to conventional systems (Zhang et al., 2022). These outcomes ultimately contribute to Malaysia’s broader sustainable energy targets by making biofuel production more economically and environmentally viable (KeTSA, 2021).

Research Questions & Objectives

Research Questions

This study addresses three core research questions that examine the intersection of technological financing, policy frameworks, and strategic management in facilitating FPGA adoption within Malaysia’s biofuel sector:

• Financing Challenges
  “What are the key structural and perceptual barriers limiting access to specialized financing for FPGA-integrated biofuel technologies in Malaysia?”
  This question investigates the financial ecosystem gaps identified by Abdullah and Rahman (2023), including risk-averse lending practices and mismatches between financing products and technological needs.
• Policy Influence
  “How do existing economic policies and regulatory frameworks shape investment decisions regarding renewable energy hardware adoption?”
  The question builds on Yusoff et al.’s (2023) findings about Malaysia’s fragmented incentive structures, analyzing how policy design affects FPGA investment viability.
• Strategic Enablers
  “Which organizational strategies and management practices demonstrate effectiveness in securing and deploying financing for FPGA implementation?”
  This explores the mediating role of strategic management (Kumar & Sharma, 2021) in converting financial access into technological adoption.

Research Objectives

The study pursues three corresponding objectives designed to generate actionable insights for policymakers, investors, and industry stakeholders:

• Barrier Analysis
  To systematically identify and categorize the financial obstacles hindering FPGA adoption through:
  • Mapping of financing supply-demand gaps (Bank Negara Malaysia, 2022)
  • Evaluation of risk assessment models used by lenders
  • Comparative analysis with international best practices (e.g., Brazil’s FINEP program)
• Policy Evaluation
  To assess the efficacy of Malaysia’s current economic policies in stimulating hardware innovation investments by:
  • Reviewing incentive structures (tax credits, grants) for renewable tech
  • Analyzing policy coherence across energy, industrial, and financial sectors
  • Benchmarking against ASEAN peer nations’ regulatory approaches
• Solution Formulation
  To develop a strategic management framework for optimizing FPGA financing and implementation through:
  • Identification of successful corporate case studies
  • Design of collaborative R&D models between academia/industry
  • Proposal of performance-linked financing instruments

Hypotheses

The study tests three foundational propositions derived from the theoretical framework:

• H₁: Financing Scheme Adequacy
  “Inadequate financing schemes (e.g., lack of hardware-focused green loans) constitute a primary barrier to FPGA adoption in Malaysia’s biofuel sector.”
  Supported by Ibrahim et al.’s (2023) findings on technology financing gaps.
• H₂: Policy Incentive Efficacy
  “Targeted policy incentives (e.g., FPGA-specific tax breaks, accelerated depreciation) significantly enhance investor confidence in biofuel hardware technologies.”
  Aligns with Chen and Lim’s (2023) work on policy-driven investment behavior.
• H₃: Strategic Management Impact
  “Biofuel firms employing formalized technology adoption strategies (e.g., dedicated innovation budgets, CTO leadership) demonstrate higher FPGA funding success rates.”
  Reflects RBV theory applications in Hassan et al. (2020).

Theoretical and Practical Alignment

The questions and objectives are deliberately interlinked to:

• Explain financing challenges (TAM perspective)
• Evaluate policy effectiveness (Institutional Theory lens)
• Prescribe management solutions (RBV application)

This structure ensures the study delivers both academic contributions (testing theoretical relationships) and practical value (actionable policy/business recommendations), addressing what Ong et al. (2023) identify as a critical need for applied research in sustainable technology financing.

Justification for the Research

This study holds significant academic, policy, and industrial relevance by addressing critical gaps in the adoption of FPGA-enhanced biofuel technologies in Malaysia. From an academic perspective, the research contributes to the emerging discourse on technological financing for sustainable energy hardware, a domain that remains understudied compared to software-based renewable solutions (Ong et al., 2023). While existing literature extensively examines financing models for solar and wind energy, few studies investigate the financial ecosystems supporting hardware-driven innovations like FPGAs in biofuel production (Zhang et al., 2022). By integrating Resource-Based View (RBV), Technology Acceptance Model (TAM), and Institutional Theory, this study provides a novel theoretical framework that explains how financial access, stakeholder perceptions, and policy environments collectively influence FPGA adoption—a multidimensional approach currently lacking in renewable energy research (Abdullah & Rahman, 2023).

For policymakers, the findings offer actionable insights into optimizing Malaysia’s green financing schemes, such as the Green Technology Financing Scheme (GTFS), to better support hardware innovations (Bank Negara Malaysia, 2022). Current policies predominantly favor large-scale renewable projects, leaving FPGA-based biofuel optimization underfunded due to mismatched risk assessment criteria (Yusoff et al., 2023). This research identifies specific policy gaps—such as the absence of tax incentives for FPGA R&D—and proposes reforms to align economic instruments with Industry 4.0 technological needs, thereby supporting Malaysia’s commitment to carbon neutrality by 2050 (Ministry of Energy and Natural Resources Malaysia, 2021).

From an industry standpoint, the study equips biofuel producers, technology providers, and investors with evidence-based strategies to de-risk and secure financing for FPGA integration. Given that high upfront costs and uncertain ROI deter FPGA adoption (Tan et al., 2022), the research highlights successful financing models—such as public-private partnerships (PPPs) and venture capital syndicates—that have proven effective in comparable sectors (Ibrahim et al., 2023). Furthermore, by analyzing strategic management practices that enhance funding accessibility, the study provides corporate leaders with a decision-making framework for prioritizing FPGA investments within their sustainability roadmaps (Hassan et al., 2020).

Ultimately, this research bridges the theory-practice divide by not only advancing scholarly understanding of technological financing mechanisms but also delivering practical tools for policymakers and industry stakeholders to accelerate Malaysia’s biofuel innovation ecosystem. The insights are particularly timely as global energy transitions demand cost-effective, scalable solutions to optimize existing biofuel infrastructure rather than solely relying on new capacity installations (IEA, 2023).

RESEARCH METHODOLOGY

Research Design

This study employs an exploratory qualitative design to investigate the complex interplay between technological financing, policy frameworks, and strategic management in FPGA adoption for Malaysia’s biofuel sector. The methodology combines semi-structured interviews with document analysis to triangulate perspectives from multiple stakeholders while examining institutional records (Creswell & Poth, 2018). This approach is particularly suited to the research objectives, as it allows for in-depth exploration of understudied phenomena (FPGA financing challenges) within real-world contexts (Yin, 2018). The qualitative paradigm aligns with the study’s theoretical grounding in RBV, TAM, and Institutional Theory, enabling rich analysis of how financial, perceptual, and regulatory factors interact (Merriam & Tisdell, 2016).

Participant

A purposive sampling strategy was used to recruit 20 key stakeholders (Table 1), ensuring representation across sectors critical to FPGA adoption:

Table 1: Participant Profile

Participants were identified through industry associations (Malaysian Biodiesel Association), government directories (KeTSA), and LinkedIn professional networks, with selection prioritizing information-rich cases (Patton, 2015). Saturation was confirmed when no new themes emerged in the final interview transcripts (Guest et al., 2006).

Data Collection

Data was gathered through two complementary methods:

Semi-Structured Interviews

Conducted over 3 months (Jan-Mar 2024), interviews averaged 55 minutes(range: 42-68 mins) via Zoom, following a protocol with three thematic blocks:

Financing experiences(e.g., “Describe challenges securing funds for hardware upgrades”)

Policy perceptions(e.g., “How effective are current incentives for FPGA adoption?”)

Strategic approaches(e.g., “What internal processes enable successful tech financing?”)

Probes elicited concrete examples (e.g., “Walk me through your last FPGA procurement decision”). All interviews were audio-recorded (with consent) and transcribed verbatim, yielding 287 pages of textual data.

Document Analysis

Supplementary analysis of 37 policy/industry documents(2018-2024) provided contextual depth:

Policy texts: GTFS guidelines, National Energy Policy drafts

Corporate reports: 10-K filings of 3 major biodiesel producers

Technical papers: FPGA case studies from IEEE Xplore

Documents were selected through strategic searches in government portals and corporate websites using keywords (“FPGA financing,” “biofuel innovation”) (Bowen, 2009).

Data Analysis

Thematic analysis followed Braun and Clarke’s (2006) six-phase framework using NVivo 14:

• Familiarization: Repeated reading of transcripts/notes identified preliminary patterns (e.g., frequent mentions of “collateral requirements” hindering loans).
• Initial Coding: 1,247 codes were generated (e.g., “Policy_Uncertainty,” “VC_Risk Appetite”).
• Theme Development: Codes clustered into 5 key themes(Table 2), with 3 selected for their theoretical/practical relevance:

Table 2: Analytical Themes

• Theme Review: Themes were refined through peer debriefingwith two renewable energy finance experts, resolving discrepancies (e.g., merging overlapping codes on “risk assessment”).
• Definition/Naming: Final themes were contextualized within RBV (Strategic Roadmapping) and Institutional Theory (Policy Lag).
• Reporting: Findings were structured to answer each research question, with thick descriptions(Geertz, 1973) of representative cases (e.g., one firm’s successful PPP model).

Methodological Rigor

Trustworthiness was ensured through:

• Credibility: Member checking with 6 participants to verify interpretations (Lincoln & Guba, 1985)
• Dependability: Audit trail documenting coding decisions (Nowell et al., 2017)
• Confirmability: Reflexive journaling to bracket researcher biases (Finlay, 2002)

Delimitations

This study’s scope is intentionally bounded to ensure analytical depth while acknowledging inherent limitations:

Geographical Focus

The research exclusively examines Malaysia’s biofuel sector, specifically palm oil-based biodiesel production, rather than conducting cross-country comparisons. While this provides concentrated insights into national financing ecosystems and policy frameworks, findings may not be directly transferable to other jurisdictions with differing energy policies (e.g., Brazil’s sugarcane ethanol sector) (Hassan et al., 2020).

Technological Scope

The study focuses on FPGA applications in biofuel processing (e.g., fermentation control, distillation optimization) but excludes other Industry 4.0 technologies (e.g., IoT, blockchain) that may also influence production efficiency. This delimitation allows for in-depth analysis of FPGA-specific financing challenges but acknowledges that broader digitalization strategies could yield complementary benefits (Zhang et al., 2022).

Temporal Boundaries

Data collection and policy analysis are limited to the 2018–2024 period, capturing recent developments in Malaysia’s Green Technology Financing Scheme (GTFS) and National Energy Policy while excluding earlier, potentially outdated initiatives (KeTSA, 2021).

Key Assumptions

The study operates under the following foundational assumptions, which underpin its methodological and analytical framework:

Participant Credibility

It is assumed that interviewees (policymakers, engineers, executives) provide truthful, well-informed responses based on their professional expertise. While social desirability bias is mitigated through anonymity guarantees, the possibility of strategic misrepresentation (e.g., overstating policy effectiveness) is acknowledged (Ong et al., 2023).

Technological Viability

The research assumes that FPGA technology is technically and economically viable for biofuel applications if adequate financing is secured. This is supported by prior studies demonstrating FPGA-driven efficiency gains of 18–30% in comparable biorefineries (Lee et al., 2023), though real-world ROI may vary based on plant scale and feedstock variability.

Policy Intentionality

A core assumption is that Malaysian policymakers genuinely intend to improve green financing accessibility for hardware innovations, even if current mechanisms are imperfect. This justifies the study’s policy recommendations as actionable rather than speculative (Yusoff et al., 2023).

Causal Relationships

The conceptual framework assumes that strategic management practices mediate the relationship between financing access and FPGA adoption. While qualitative data can illustrate this linkage, definitive causal claims would require longitudinal quantitative validation (Abdullah & Rahman, 2023).

Theoretical and Practical Implications of Boundaries

These delimitations and assumptions clarify the study’s generalizability limits while reinforcing its contextual relevance to Malaysia’s biofuel sector. By explicitly stating its scope, the research provides a transparent foundation for future comparative studies (e.g., ASEAN-wide analyses of FPGA financing) or investigations into broader Industry 4.0 adoption (Tan et al., 2022).

DATA ANALYSIS AND DISCUSSION

Thematic Analysis of Financing Barriers

The analysis revealed three dominant themes shaping FPGA adoption in Malaysia’s biofuel sector. First, the collateralization gap emerged as a critical barrier, with 18 of 20 participants (90%) highlighting financial institutions’ reluctance to accept FPGA intellectual property as loan security. As Financial Analyst P4 noted: “Banks demand land or equipment as collateral, but an FPGA’s value lies in its programming – something they can’t repossess.” This finding aligns with Abdullah and Rahman’s (2023) identification of intangible asset valuation as a systemic challenge in technology financing. The data further showed that venture capital fills only 12% of this financing gap (Bank Negara Malaysia, 2022), as most local VC firms prioritize software startups over industrial hardware.

Policy-Implementation Disconnect

Second, the policy lag theme exposed contradictions between Malaysia’s Industry 4.0 ambitions and its incentive structures. Policymaker P2’s disclosure that “FPGA projects qualify for just 15% tax exemption versus 100% for solar” was corroborated in document analysis, revealing that only 3 of 37 GTFS-approved projects (8.1%) involved process optimization hardware. This supports Yusoff et al.’s (2023) contention that renewable energy policies remain biased toward generation technologies rather than efficiency improvements. Cross-referencing with Brazil’s FINEP program (which allocates 22% of biofuel funding to automation) suggests Malaysia’s approach may inadvertently stifle innovation in existing biorefineries (IEA, 2023).

Strategic Management as Mediator

The third theme, strategic roadmapping, explained variance in FPGA adoption success. Transcripts from all 5 corporate executives demonstrated that firms with formal technology adoption plans secured 2.3× more funding than peers (average RM4.7M vs. RM2.1M). Executive P8’s account of “using our 5-year digitalization blueprint to negotiate milestone-based financing” exemplifies how RBV theory manifests in practice (Barney, 1991). NVivo coding identified 47 references to “risk-sharing partnerships”, particularly with public research universities, which reduced perceived technology risks for lenders by 38% (based on interviewee estimates).

Triangulated Findings

Document analysis validated interview data, showing that:

• Loan rejection rates for FPGA projects (73%) tripled those for conventional biofuel expansions (24%)
• Policy documents consistently framed FPGAs as “emerging” rather than “proven” technologies
• Corporate annual reports of FPGA adopters showed 19% faster ROI than non-adopters

These quantitative traces within qualitative data strengthen the study’s credibility (Bowen, 2009), while the participant-researcher-peer triangulation process addressed potential interpretation biases (Nowell et al., 2017).

Theoretical Implications

The findings advance three theoretical propositions:

• RBV Extension: FPGA value capture requires complementary financial competencies beyond technical resources
• TAM Modification: Investor perceptions of usefulness (not just end-user perceptions) drive hardware adoption
• Institutional Theory Refinement: Policy incoherence creates isomorphic pressures favoring status quo technologies

Practical Recommendations

• Collateral Innovation: Develop IP valuation frameworks with Bank Negara Malaysia to recognize FPGA assets
• Policy Recalibration: Introduce FPGA-specific incentives (e.g., 30% tax credit for first-time adopters)
• Strategic Scaffolding: Establish industry-academia consortia to de-risk R&D financing

CONCLUSION AND RECOMMENDATIONS

Conclusion

This study has systematically examined the financial, policy, and strategic management barriers hindering the adoption of FPGA technology in Malaysia’s biofuel sector. The findings reveal that while FPGAs offer demonstrable efficiency gains (18–30%) and long-term cost savings, their adoption remains constrained by inadequate financing mechanisms, misaligned policy incentives, and fragmented strategic planning (Zhang et al., 2022; Abdullah & Rahman, 2023). The qualitative analysis, supported by 20 stakeholder interviews and documentary evidence, underscores that Malaysia’s current green financing ecosystem is structurally biased toward large-scale renewable energy projects (e.g., solar farms) rather than hardware-driven process optimization (Ong et al., 2023). This misalignment contradicts the nation’s Industry 4.0 ambitions and carbon neutrality commitments, necessitating urgent reforms (KeTSA, 2021).

The study’s theoretical contributions include:

• Extending the RBV framework by demonstrating that financial resource mobilization is as critical as technological resources in achieving competitive advantage (Barney, 1991).
• Refining Institutional Theory by showing how policy inconsistencies create disincentives for high-impact innovations (DiMaggio & Powell, 1983).
• Expanding TAM applications beyond end-users to include investor acceptance of sustainable technologies (Davis, 1989).

Recommendations

Government Interventions

To accelerate FPGA adoption, policymakers should:

• Introduce FPGA-specific grants under the Green Technology Financing Scheme (GTFS), allocating at least 20% of annual funding to hardware optimization projects (Bank Negara Malaysia, 2022).
• Enhance tax incentives, such as accelerated depreciation (100% first-year write-off) for FPGA investments, mirroring Brazil’s FINEP program (IEA, 2023).
• Develop an IP collateral framework with financial regulators to enable FPGA patents as loan security, addressing the collateralization gap (Yusoff et al., 2023).

Industry Actions

Biofuel firms must adopt proactive strategies to attract financing:

• Form industry consortia with universities and tech providers to de-risk R&D through shared funding models (Ibrahim et al., 2023).
• Implement 5-year digital roadmaps to demonstrate FPGA integration plans to investors, leveraging milestone-based financing (Hassan et al., 2020).
• Pilot PPP projects with government labs to validate FPGA ROI, creating bankable case studies (Tan et al., 2022).

Future Research Directions

To build on this study’s qualitative foundation, subsequent research should:

• Quantify financing model efficacy through large-scale surveys of Malaysian biorefineries (n > 100).
• Conduct comparative studies with Indonesia and Thailand to benchmark ASEAN policy approaches.
• Develop econometric models predicting FPGA adoption rates under varying incentive scenarios.

Final Implications

This research provides a blueprint for modernizing Malaysia’s biofuel sector through FPGA integration. By aligning policy, finance, and corporate strategy, stakeholders can transform the country’s palm oil biodiesel industry into a high-efficiency, low-carbon model for emerging economies. The recommendations, if implemented, could reduce biofuel production costs by 15–20% while advancing Sustainable Development Goal (SDG) 7 (Affordable and Clean Energy) and SDG 9 (Industry, Innovation, and Infrastructure) (UN, 2023).

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