The Malaysian government has announced state-owned oil company Petronas will collaborate with major palm oil producers to manufacture sustainable aviation fuel from palm oil waste. The feedstock is contentious in many western countries as development of commercial palm oil plantations often comes at the expense of tropical forests, displacing and endangering wildlife. The Malaysian move, announced in the government’s 2025 federal budget, is part of a broader drive to strengthen the country’s palm oil industry, one of the largest in the world and a key national exporter. Meanwhile, its northern neighbour Thailand is to pump first supplies of SAF to Bangkok’s two main airports, while to the south, Singapore Airlines Group is preparing to receive 500 tonnes of the fuel from Neste’s local refinery. Both the latter SAF consignments were produced from waste oils and fats.

The decision that Petronas would work with palm oil producers to make low emission aviation fuel was announced by Malaysia’s prime minister, Anwar Ibrahim, as he handed down the country’s 2025 financial budget.

But rather than a specific sustainability initiative, the announcement was buried on page 83 of the PM’s budget speech in a section dedicated to strengthening the country’s palm oil sector.

While the volumes, delivery timeframe and prospective users of the palm oil SAF were not disclosed, the PM specifically referenced the Petronas initiative as part of a broader endorsement and defence of the palm oil industry, which in the new fiscal year will also receive incentives totalling 100 million Malaysian ringgit ($23m) to replace ageing, unproductive palm trees with new crops.

The PM also encouraged major palm oil companies to support small adjacent landholders “by supplying the latest seeds and the best fertilisers, as well as helping them achieve compliance with sustainability standards.”

And he announced an allocation of 65 million Malaysian ringgit ($15m) “to counter misconceptions in Europe and enhance the sustainability of palm oil,” but provided no further details of how this campaign would be delivered.

Meanwhile, Malaysia Aviation Group (MAG), parent of Malaysia Airlines, has joined the national CEO Action Network – a coalition focused on sustainability advocacy, capacity building, action and performance. MAG will contribute to the Diversity Equity Inclusion workstream, which aligns with its commitment to IATA’s 25by2025 initiative aimed at improving women’s representation in the aviation sector.

“We are proud to join CAN, focusing on establishing collective commitments to climate action and social stewardship,” commented Datuk Captain Izham Ismail, Group Managing Director of MAG. “This initiative aligns seamlessly with our sustainability ambitions, particularly our decarbonisation goals and our commitment to creating a positive socio-economic impact.”

Across Malaysia’s northern border, Thai energy company Bangchak Corporation is delivering first supplies of blended SAF into the fuel pipeline system supplying Bangkok’s two international airports, Suvarnabhumi and Don Mueang.

The fuel was delivered as part of a pilot programme with Bangkok Aviation Fuel Services and BAFS Pipeline Transportation to help prepare infrastructure for SAF production and use in Thailand, and to help achieve recognition as a renewable energy leader within the broader Southeast Asia region.

“Bangchak has invested over 8.5 billion Thai Baht ($250m) in developing SAF production from used cooking oil through its subsidiary BSGF,” reported the energy company.

“The construction of the SAF production unit at Bangchak Refinery in Phra Khanong, near Bangkok, is progressing as planned, with production expected to commence in early Q2 of 2025 with a capacity of 1 million litres per day.

“This initiative aims to prepare the aviation industry, both domestic and international airlines within the SAF alliance, to support the industry’s goal of achieving net zero greenhouse gas emissions by 2050 in alignment with standards set by the International Civil Aviation Organisation and the International Air Transport Association.”

In Singapore, renewable fuels producer Neste is due this quarter to deliver the second of two 500-tonne consignments of blended SAF to the Changi Airport for use by Singapore Airlines and its low-cost sibling Scoot.

Earlier this year their parent company, Singapore Airlines Group (SIA), purchased 1,000 tonnes of the fuel from Neste’s refinery near the border with Malaysia. During the second quarter, the airlines became the first to receive the waste oil SAF from Neste through the airport’s fuel supply system.

Soon after, a Vietnam Airlines Airbus A321 destined for Hanoi became the first visiting carrier from the Asia-Pacific region to uplift Neste SAF from Changi, followed by a long-haul Emirates Boeing 777-300.  

Neste’s refurbished plant, opened mid last year, is the world’s largest SAF manufacturing facility, capable of producing 1 million tonnes of the fuel per year. As well as supplying the Singapore hub, the facility also produces SAF for export to other markets including North America and Europe, where demand is currently far higher than in the Asia-Pacific region. The Singapore government has decreed that from 2026, at least 1% of the fuel used by each departing flight will need to be SAF, with mandated proportions to increase to between 3% and 5% by 2030.

Photo (Martijn Gijsbertsen): Malaysia Airlines flew an inaugural flight from Amsterdam to Kuala Lumpur in December 2021 with SAF supplied by Neste and Petronas

Tony Harrington

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The transition of Asia-Pacific markets to sustainable aviation fuel has just been boosted in five nations, with fresh developments in Australia, Singapore, Japan, Malaysia and Thailand. The Australian government, in its 2024 budget, has announced plans to fast-track support for a low-carbon liquid fuel sector, with a specific initial focus on SAF, while Singapore Airlines and its low-cost sibling Scoot have announced their first purchase of the fuel at Changi International Airport from the newly activated Neste Singapore refinery, currently the world’s largest single SAF production plant.  Two major collaborations have also been announced between Japanese and Malaysian partners, in which SAF produced in Malaysia will be supplied to Japan, to help meet that country’s 2030 mandate of 10% SAF usage. Another regional collaboration will see used cooking oil sourced from another Japanese company used to help produce SAF at a new refinery due to open in Thailand in the first half of 2025.

Following strong lobbying from the aviation and energy sectors, the Australian government has committed to supporting the production of low-carbon liquid fuels, including SAF, in the Net Zero strategy of the nation’s Future Made in Australia Plan.

Over the next decade, the government will invest A$1.7 billion ($1.14bn) to support the Australian Renewable Energy Agency in commercialising net zero innovations including low-carbon fuels. 

Additionally, over four years starting in 2024-25, the government will commit A$18.5 million ($12.4m) to develop a certification scheme for low-carbon fuels including SAF and renewable diesel by expanding the national Guarantee of Origin scheme, which is already being developed to track and verify emissions linked to the production in Australia of hydrogen and renewable electricity.

A further A$1.5 million ($1m) will be spent over two years to investigate costs and benefits of introducing mandates or other demand-side measures to drive up the use of low carbon liquid fuels. The government will also undertake a “targeted” consultation on production incentives to support local production of new fuels. 

“Two years ago in Australia, SAF was an acronym with barely a skerrick of interest,” said Andrew Parker, Chief Sustainability Officer of the Qantas Group, one of the strongest advocates of developing a local SAF sector and mandates to drive up demand.

“The commencement of this funding and related policy measures are significant first steps on our path to decarbonise aviation here,” said Parker. “A progressive universal SAF mandate remains the most essential policy lever we have to secure capital and technology and ensure consistency and maintain competitiveness with our major trading partners.”   

Airbus, another strong advocate of and investor in Australian SAF, welcomed the government’s initiatives. “They will help move SAF from plans today into planes tomorrow,” said Stephen Forshaw, the airframer’s chief representative in Australia, New Zealand and the Pacific. “The world is moving to scale up production of SAF with supply-side support by governments helping to derisk early projects. Australia’s announcements recognise this.”

At Singapore’s Changi International Airport, the first SAF produced locally by global refiner Neste will be supplied to SIA Group‘s two carriers, Singapore Airlines and its low-cost sibling Scoot.

The carriers’ parent company, Singapore Airlines Group, has agreed to buy 1,000 tonnes of neat SAF, which Neste will then blend and transfer into the airport’s fuel system, one batch in the second quarter of 2024, the other in the fourth. The SAF will be produced from recycled waste and residue raw materials.

“This supply of locally produced SAF to Changi Airport is a milestone in our journey of supporting the aviation industry and governments in the region to achieve their emissions reduction goals,” said Alexander Kueper, Neste’s VP, Renewable Aviation. “We are looking forward to expanding our cooperation with Singapore Airlines as well as supplying visiting carriers at Changi Airport.”

The airline’s Chief Sustainability Officer, Lee Wen Fen, said the deal was an important step towards a target of including 5% SAF in its total 2030 fuel use. As well, from this month, SIA will offer 1,000 SAF book-and-claim units (BCUs) for purchase by corporate travellers, shippers and freight forwarders to help compensate for their flight emissions. Each BCU will equate to 1 tonne of neat SAF and its associated carbon dioxide reduction benefit.

Three Japanese corporations have also entered new SAF deals, with two in Malaysia and one in Thailand.

Tokyo-based biotechnology company Euglena, which produces renewable fuels from used cooking oils and microalgae, has formed a new partnership with Malaysia’s national oil company Petronas to build and operate a commercial biofuels production plant in Malaysia. Euglena has also signed a Memorandum of Understanding with Japan Airport Terminal (JAT), which operates Tokyo’s Haneda Airport, to jointly develop a SAF supply chain to the airport, with the two also looking to commercialising and providing the fuel to airlines.

If the Japanese government’s mandate of 10% SAF usage by 2030 was applied to Haneda Airport’s total jet fuel consumption in 2022, the companies estimate the airport would require 220 million litres of SAF per year. Eugena and JAT claim they would be able to supply 50 million litres of SAF per year, or 23% of the total required.

Marubeni Corporation, another major Japanese industrialist, has just announced an MoU with InvestSarawak, a government agency in the Malaysian state of Sarawak, to study the feasibility of producing SAF from biomass resources in the region. No details of fuel volumes or production timeframes were disclosed.

Meanwhile, a third Japanese company, Sumitomo Corporation, has agreed to provide used cooking oil to Thailand’s Bangchak Group, which is developing a new SAF plant with capacity to produce 1 million litres of fuel per day, commencing in the second quarter of 2025. The UCO will supplement supplies collected by Bangchak through its 162 service stations in Thailand. In a separate deal, Sumitomo and Japan’s Cosmo Oil will buy SAF produced by Bangchak.

Photo: Neste’s Singapore refinery

Tony Harrington

Correspondent

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The Singapore Airlines (SIA) Group, which includes low-cost carrier Scoot, has launched a voluntary carbon offset programme that allows passenger and cargo customers to offset emissions at any time before or after a flight through dedicated microsites. The two carriers will match the offsets purchased for the first six months from the launch of the programme. SIA Cargo customers will be able to offset their carbon emissions on a dedicated microsite from late July and corporate customers are expected to participate in the programme from the fourth quarter of 2021. SIA customers can use KrisFlyer miles and HighFlyer points to offset their emissions from later this year. Contributions will help support verified carbon offset projects in Asia that include the protection of native forests in Indonesia, renewable solar energy in India and clean burning cookstoves for rural families in Nepal. The offsets will be provided via the BlueHalo digital solution developed by Australia-based Tasman Environmental Markets (TEM), which allows customers to immediately calculate and offset the emissions of their journey.

“Through the SIA Group’s voluntary carbon offset programme, our customers now have an opportunity to offset their emissions through accredited projects that provide clear benefits to people and the planet. Matching their offsets is our ways of encouraging our customers to fly carbon neutral,” said Lee Wen Fen, SVP Corporate Planning, Singapore Airlines.

In May, the Group committed to achieving net zero carbon emissions by 2050 (see article) through investments in new-generation aircraft, higher operational efficiency and low-carbon technology such as sustainable aviation fuels. Beyond reducing direct emissions, it says high-quality carbon offsets can play an important and complementary role, pointing to its participation in ICAO’s CORSIA carbon offsetting scheme for capping international aviation emissions at 2019 levels and projected to run until 2035.

“While offsetting is particularly important in the mid-term, it is also expected to remain relevant in the long run to mitigate residual emissions,” says the airline group.

According to the SIA carbon offsetting microsite, the cost of offsetting a calculated 1.68 tonnes of emissions from return economy flights between Singapore and London would be 21.86 Singapore Dollars (US$16.26). Calculated emissions of 4.88 tonnes for a return business class flight between the two cities would push up the offsetting cost to 85.28 Singapore Dollars (US$63.43).

The Katingan Mentaya Project in Indonesia, said to be the world’s largest emission reduction forest project, protects vital peatland from destruction and preventing the release of emissions stored within the forests. It also secures habitat for five critically endangered species including the Bornean Orangutan, Proboscis Monkey and the Southern Bornean Gibbon. In partnership with 34 local villages, the project builds community capacity and sustainable development through employment and education. The project claims over 7.5 million tonnes of GHG emissions are prevented each year and employs more than 500 local people. The solar energy projects across India produce renewable electricity where power would otherwise be generated by a fossil-fuel power plant, preventing over 815,000 tonnes of GHG emissions per year. The Nepalese projects have distributed to families over 47,000 clean burning cookstoves, which reduce smoke pollution and the associated health risks while reducing carbon emissions because they require less firewood. Over 50,000 tonnes of GHG emissions are prevented each year.

TEM is Australia’s largest carbon offset provider and its BlueHalo Journey API-driven software enables travel and transport businesses to integrate offsetting into the online booking system. In 2014, Qantas and TEM co-developed the Qantas Future Planet programme that provides a carbon offsetting solution for corporate businesses, with more than 40 joining since inception. Last September, Australian online travel agency Webjet launched its Sustainable Traveller programme using TEM’s BlueHalo technology.

Commenting on the SIA launch, TEM CEO Peter Castellas said: “Empowering customers to take action on climate change by offsetting their emissions is an imperative in the way we will be returning to travel. We are thrilled to partner with a powerful global airline to make a positive impact on people and the planet.”

Photo: Singapore Airlines