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The leaf sheath of sugarcane are agricultural residues. In the past, the agriculturists used to burn leaf sheath of sugarcane which caused pollution. This research aims to develop the management process of leaf sheath of sugarcane and to reduce the burning of sugarcane. In addition, to eliminate the leaf sheath of sugarcane to effectively utilize suitable for agriculture and agro-industry as well as to add value to the leaf sheath of sugarcane. This research has developed biomass energy rod from the leaf sheath of sugarcane using natural rubber as binder during drying process by microwave energy. The ingredients for forming biomass energy rod using the designed machine are sugarcane leaves of 19 %w/w, water of 57 %w/w, tapioca flour of 6 %w/w and natural latex of 19 %w/w. The biomass energy rod has diameter of 5 cm, length of 10 cm, and weighs between 150-153 g is required. The effects of heat source namely microwave drying, hot air drying and microwave-hot air drying is studied. The drying time, net heating value and residual moisture content of biomass energy rod are compared with each drying heat source. The results showed that in case study 2 using microwave energy (8 microwave sources are turned on, 250 W each) in the drying process has the lowest drying time, highest net heating value and has the lowest residual moisture content of biomass energy rod when compared to each drying heat source. The results of this research help to develop innovations in the forming and drying process of biomass energy rod using agricultural products such as leaf sheath of sugarcane.