Malaysia Energy Sustainable Aviation Fuel
Malaysia is capitalizing on its position as the world’s second-largest palm oil producer and a major Southeast Asian aviation hub to build out a domestic Sustainable Aviation Fuel (SAF) ecosystem. This presents commercial opportunities for U.S. companies with expertise in areas such as SAF technology, decarbonization finance, and supply-chain solutions.
On the supply side, Malaysia has moved beyond pilot activity into commercial production. Hong Kong-based EcoCeres commenced SAF production at its Johor biorefinery in October 2025, with a capacity of 350,000 metric tonnes per annum and has begun shipping SAF to Europe. A second, larger biorefinery is under development as a joint venture between Malaysia’s state-owned energy company PETRONAS, Italy’s Eni, and Japan’s Euglena. This facility will have a capacity of 650,000 metric tonnes per annum and is expected to be operational in 2028. Together, these facilities position Malaysia as one of the largest SAF production centers in the ASEAN region.
PETRONAS has already achieved a notable milestone in 2025 by delivering Malaysia’s first locally blended SAF via pipeline to Malaysia Airlines for trial use on international flights, demonstrating its capabilities in blending, logistics, and airline integration.
On the demand side, the government is developing a proposal to mandate a 1% SAF blend for all international flights departing from Kuala Lumpur International Airport, with a possible implementation date of January 2027. Such a mandate would create an initial, policy-backed SAF market at one of the world’s busiest international airports, which handled approximately 42 million international passengers in 2024. This move is in step with the Malaysia Aviation Decarbonisation Blueprint and the National Energy Transition Roadmap, which have set a long-term national target of a 47% SAF blend by 2050.
Feedstock availability represents Malaysia’s principal competitive advantage. Policymakers are working on a waste-to-fuel strategy that will utilize Malaysia’s palm oil waste streams, including palm oil mill effluent, empty fruit bunches, and used cooking oil, as feedstock for domestic SAF production. The former Minister of Plantation and Commodities, now the Minister of International Trade, Johari Ghani, has stated that the government will facilitate participation by foreign companies in Malaysia’s SAF sector, signaling that Malaysia is open for scaling up the sector.
These developments open opportunities for U.S. companies offering proven technologies, feedstock traceability, and airport fuel logistics and blending solutions that support scale-up. If you represent a U.S. company and want to learn more about opportunities in Malaysia’s growing SAF sector, please contact Commercial Specialist Mohan Gurusamy at office.kualalumpur@trade.gov.