RM2.3 BLN SAF FACILITY IN JOHOR BOOSTS MALAYSIA’S ROLE IN LOW-CARBON AVIATION SUPPLY CHAIN

By Mohamad Syazwan Mustafa

JOHOR BAHRU, Feb 19 (Bernama) -- Malaysia has strengthened its position in the global low-carbon aviation fuel supply chain with the commissioning of a US$500 million (US$1=RM3.89) sustainable aviation fuel (SAF) facility in Tanjung Langsat, Johor.

The development by Hong Kong-based renewable fuels producer EcoCeres enhances the state’s reputation as a strategic industrial and export hub.

The plant, with an annual production capacity of 420,000 tonnes, is 40 per cent larger than EcoCeres’ first biofuels facility in Jiangsu, China, which produces 300,000 tonnes annually, underscoring Johor’s growing role in advanced biofuel manufacturing and export-oriented industries.

EcoCeres co-chairman James Tam described the Johor facility as “strategically critically important” to the company’s development, noting that Southeast Asia was identified as a key location due to its abundant supply of waste-based feedstocks required for SAF production.

“We need used cooking oils and other waste oils as feedstocks. Southeast Asia is abundant in the supplies of the raw materials that we can use for sustainable aviation fuels,” he said.

Tam said Malaysia was selected after evaluating several countries in the region, citing a supportive government, a well-established legal system to protect foreign investors and strong port infrastructure that facilitates exports within the region and to Europe.

“Malaysia also has excellent port facilities… we are close to port facilities that will enable us to export our sustainable aviation fuels, not just within Malaysia and Southeast Asia, but also as a gateway to Europe when we ship our products there,” he said.

Tam highlighted that support from the Johor government facilitated the project’s implementation, enabling the facility to be completed “within record time in the history of the industry”.

The plant operates on a circular economy model, converting locally sourced waste, such as used cooking oil and palm oil mill effluent (POME), into high-value biofuels, reinforcing domestic value addition within Malaysia’s commodities and manufacturing sectors.

“All the materials that we are using right now are waste materials that otherwise would not have much economic value or would actually be harmful to the environment. What we are doing is using something that would otherwise have been of little use or even harmful to the environment into something great,” he explained, describing the approach as turning “waste into wonder”.

Tam said feedstock can be sourced domestically, processed in Johor and supplied for uplift at Kuala Lumpur International Airport, keeping the full value chain — from waste collection to fuel utilisation — within Malaysia.

Europe currently leads global SAF adoption under the Renewable Energy Directive 3 (RED III) and the ReFuelEU Aviation mandate, which require at least two per cent SAF blending in 2025, rising to six per cent in 2030 and 70 per cent by 2050.

“We are not just talking about one economic cycle. We do see that this is a multi-decade evolution and increasing demand for our products in sustainable aviation fuels,” he said.

Tam noted that similar developments are taking shape across Asia, including in Malaysia, Singapore, Indonesia, Japan and South Korea, as aviation remains a hard-to-abate sector expected to rely on liquid fuels for long-haul travel.

The Johor facility directly employs over 300 local technical staff, including engineers, technicians, and laboratory personnel. It is expected to generate further employment opportunities across feedstock collection, logistics, port operations, and downstream energy trading.

“At the plant level, we are employing 300 locals. But in the whole supply chain, we believe that we could be creating thousands of jobs for the Malaysian economy,” he said.

The company is also collaborating with local universities on research and development programmes to improve yields, explore new feedstocks and develop technical talent as the industry expands.

In conjunction with the opening of the SAF facility last month, Plantation and Commodities Minister Datuk Seri Dr Noraini Ahmad emphasised that the facility aligns with the Malaysia Aviation Decarbonisation Blueprint (MADB) and the National Energy Transition Roadmap (NETR).

This includes the initial one per cent SAF blending target aimed at creating domestic demand and supporting market growth, she said.

Noraini also said that the initiative positions Malaysia as a leading SAF producer in ASEAN while aligning national policy, economic development and environmental goals to build a sustainable and competitive low-carbon economy.

-- BERNAMA