Putrajaya, Malaysia – Petronas, the national oil and gas company of Malaysia, has announced a significant milestone in its strategic plan to lead in the Sustainable Aviation Fuel (SAF) sector. By 2028, Petronas will establish Malaysia’s first SAF production facility, marking a major step forward in meeting the rising demand for SAF within the region.
Transport Minister Anthony Loke, speaking at the launch of the Malaysian Aviation Sector Decarbonisation Roadmap (MADB), confirmed that Petronas has partnered with international companies, including Enilive from Italy and Euglena from Japan, to develop a biorefinery within Johor’s Pengerang Integrated Complex (PIC). The facility, which is expected to be operational by the second half of 2028, will produce SAF along with other biofuels such as renewable diesel and hydrogenated vegetable oil (HVO).
This development is seen as a critical move in positioning Malaysia as a key player in the SAF market, especially in Southeast Asia. The collaboration is not just about reducing carbon emissions; it’s also a strategic economic initiative aimed at enhancing Malaysia’s competitiveness in the global SAF market.
Addressing Market Challenges
One of the key challenges highlighted by Minister Loke is the current high cost of SAF, which is approximately three times higher than conventional jet fuel. The limited production and supply of SAF have kept its adoption low among airlines in Malaysia. However, with the new biorefinery, Petronas aims to make SAF more accessible and cost-competitive for regional airlines.
“Petronas is leading the charge in SAF production. By 2028, we anticipate that the market conditions will improve, making SAF a viable option for more airlines,” Loke stated. He also mentioned that while there are no mandates currently in place for airlines to use SAF, the government is exploring various incentives and market-based mechanisms to encourage its adoption
“Petronas is leading the charge in SAF production. By 2028, we anticipate that the market conditions will improve, making SAF a viable option for more airlines.” – Anthony Loke, Transport Minister
Strategic Framework and Industry Collaboration
The MADB outlines a comprehensive framework for reducing carbon emissions in the aviation sector by 2050. This includes technological advancements, operational improvements, and the use of alternative fuels like SAF. The roadmap is closely aligned with Malaysia’s National Energy Transition Roadmap (NETR) and the New Industry Master Plan (NIMP) 2030, both of which support the development of a sustainable and competitive SAF market.
Loke also called for the development of a National Carbon Market Strategy to further support these initiatives, with the Natural Resources and Environmental Sustainability Ministry taking the lead.
In addition to the SAF production plans, Petronas has been active in forming partnerships to strengthen its position in the SAF supply chain. A memorandum of understanding (MoU) with Japan’s Idemitsu Kosan was recently signed to optimize the route to market for SAF and enhance the company’s supply chain capabilities.
Positioning Malaysia in the Global SAF Market
The establishment of a SAF production facility in Malaysia is a significant step toward capturing a share of the growing global demand for sustainable fuels. The partnership with international players like Enilive and Euglena ensures that Malaysia is not only participating in but also contributing to global SAF innovation.
By 2028, Malaysia could emerge as a regional hub for SAF production, attracting further investments and creating a robust market for sustainable fuels. The biorefinery at Pengerang Integrated Complex is expected to play a central role in this transformation, providing a scalable and economically viable source of SAF for airlines in Malaysia and potentially across Southeast Asia.
Technical Details:
The Pengerang facility will leverage advanced biorefining technologies to produce SAF from various feedstocks, including waste oils and other renewable sources. The facility is designed to integrate seamlessly with existing infrastructure, allowing for efficient production and distribution of SAF.
Analysis:
This move by Petronas represents a strategic alignment with global trends towards sustainable energy and fuel sources. As the aviation industry faces increasing pressure to reduce its carbon footprint, the demand for SAF is expected to rise significantly. By positioning itself as a leader in SAF production, Petronas is not only contributing to environmental sustainability but also securing a competitive advantage in a burgeoning marketSource: Petronas Press Release
