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Malaysia Embraces Sustainable Jet Fuel with 2027 SAF Roadmap

  • Writer: thefxigroup
    thefxigroup
  • Dec 24, 2024
  • 2 min read
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The government’s plan to produce SAF from palm-derived waste opens national opportunities—impacting policy, industry frameworks, and climate goals.

Malaysia is making a strategic move to join the global race for low-carbon aviation with its plan to begin producing sustainable aviation fuel (SAF) by 2027. With SAF expected to be a cornerstone of the country’s decarbonisation strategy, the announcement places Malaysia among a growing number of nations aligning environmental priorities with industrial development. The initiative, spearheaded by the Ministry of Transport and Ministry of Economy, will see the development of two biorefineries with a projected capacity of one million metric tons of SAF annually. The projects, led by EcoCeres and a joint venture involving Petronas, Enilive, and Euglena, will use feedstocks such as palm oil mill residue, used cooking oil, and microalgae—allowing Malaysia to tap into its biomass advantage without compromising food security.


This move is closely aligned with the government’s National Energy Transition Roadmap (NETR), a long-term plan to position Malaysia as a regional clean energy hub. Under the roadmap, the country aims to introduce a 1% SAF blending mandate in the aviation sector, scaling up gradually to 47% by 2050. The government has also signaled potential tax incentives and policy levers to attract investment, reduce barriers to entry, and stimulate innovation in the biofuel sector. These incentives are critical to building a comprehensive SAF ecosystem that includes feedstock supply chains, processing infrastructure, research capacity, and end-user adoption.


While the vision is bold, implementation will not be without challenges. One key concern is feedstock security. As demand grows, ensuring a consistent and sustainable supply of used cooking oil, agricultural waste, and biomass becomes increasingly complex. Without a coordinated national framework for feedstock collection, fragmentation could lead to inefficiencies, price volatility, and even sustainability risks. Infrastructure readiness is another issue. While Malaysia has refining expertise through Petronas, scaling SAF production requires specialised biorefinery facilities, logistics networks, and certification systems aligned with global SAF standards like CORSIA.


While the national plan shows strong potential, cost competitiveness remains one of the key barriers to wider adoption of sustainable aviation fuel. SAF is currently estimated to be two to five times more expensive than conventional jet fuel, which makes widespread commercial adoption a challenge—particularly in price-sensitive markets like Southeast Asia. Without regulatory mandates, subsidies, or carbon pricing mechanisms, SAF demand may not grow at a pace that matches planned production capacity.


Other limitations include the readiness of supporting infrastructure and market certainty. Scaling SAF output requires more than just refinery development—it also involves specialised logistics, feedstock supply systems, certified blending facilities, and fuel distribution mechanisms that meet international aviation standards. A lack of clear long-term procurement frameworks, including firm blending mandates and purchasing commitments, could dampen investment interest and slow ecosystem development.

Despite these challenges, the roadmap sets a clear direction. As regulatory frameworks evolve and production matures, opportunities may arise across the entire SAF value chain—from feedstock supply to logistics, pre-processing, refining, and certification. Ongoing engagement between policymakers, corporations, and supply chain stakeholders will be key to shaping a viable and inclusive SAF industry in Malaysia.


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