MALAYSIA CAN BECOME LEADING FEEDSTOCK SUPPLIER FOR SAF IN ASIA PACIFIC -- MIDF RESEARCH

Malaysia has the potential to become a leading supplier of feedstock for sustainable aviation fuel (SAF) production in the Asia Pacific region via collaboration with international partners to enhance capabilities and optimise the supply chain, MIDF Research said.

In a note, the research house said Malaysia also has the potential to play a role in the global SAF market, leveraging its abundant feedstock resources, established biofuel industry, government support and solid partnership with oil and gas players.

However, it said addressing challenges such as competition with conventional fuel as well as other industries that sought similar feedstocks for its clean fuel endeavours, technological constraints and environmental concerns will be crucial to realising this potential and establishing Malaysia as a key player in SAF production and distribution.

Within National Energy Transition Roadmap's (NETR) initiatives, Malaysia adopted the International Civil Aviation Organisation's (ICAO)  net-zero carbon emissions goal for aviation by 2050, and targeted up to 47% SAF blending by 2050.

MIDF Research believed recognition as a major feedstock supplier could place Malaysia in a pivotal role within the SAF environment.

“With the combination of the feedstocks and the availability of Jet A1 fuel, Malaysia is poised to be one of the major SAF producers in the region, and recently, Air New Zealand (ANZ) has highlighted Malaysia's potential to emerge as a key provider of feedstock for SAF within the Asia Pacific region,” it said.

On 20th March, Bernama reported that the carrier had launched a global open invitation to innovators and start-ups in the SAF sector, including those in Malaysia, to become its supply partner.

Hence, MIDF Research said the collaboration initiative represents a significant stride in ANZ's commitment to reducing its carbon footprint and is in line with Malaysia's NETR.

The research house also noted that Malaysia has a well-established biofuel industry, particularly in the production of biodiesel from palm oil, and this existing infrastructure, as well as expertise, could be leveraged to transition towards SAF production.

MIDF Research added that government policies and incentives aimed at supporting the biofuel industry could be extended to include SAF production, such as financial incentives, tax breaks and research grants that would encourage investment in SAF projects and facilitate market development.

Besides that, it said international collaboration and partnerships in SAF research, development, and commercialisation with other countries, industry stakeholders and research institutions would facilitate knowledge exchange, technology transfer and market access.

“In the anticipation that demand for commercial air travel is growing around 3.9% pa for the next 20 years, we believe that the development, production and implementation of SAF is timely,” it said.