Petronas calls for cross-sector cost-sharing to scale domestic SAF

Durable cross-sector partnerships aimed at building a domestic sustainable aviation fuel market require alignment on financial risks and cost-sharing rather than just a shared environmental goal, according to a senior official from state-owned oil and gas company Petronas.

Speaking at the MyAero Sustainable Aviation Asia-Pacific Symposium, Harlina Pikri, General Manager of Strategy & Sustainability at Petronas, said that while Malaysia possesses the structural infrastructure and raw feedstocks to become a credible regional producer rather than a mere importer, scaling the nascent value chain hinges on how costs and commercial risks are distributed fairly across policymakers, airlines and financiers.

"We have the ingredients to become a credible regional SAF ecosystem player, not just a SAF user," Fikri said in a panel, citing Malaysia's population of roughly 32 million alongside 42 million annual visitors, an established aviation sector, existing airport fueling infrastructure across 13 terminals and accessible sustainable feedstock pathways as core structural advantages.

The oil company delivered Malaysia's first locally blended SAF for Malaysia Airlines flights in 2025. The initiative aligns with the Malaysian government's National Energy Transition Roadmap, which aims to achieve a 47% SAF blending mandate by 2050.

Cross-sector alignment

On collaboration, Fikri argued that durable cross-sector partnerships require alignment on shared outcomes rather than shared interest, stressing that policymakers, fuel producers, airports, airlines, financiers and infrastructure operators must agree not just on the goal of lower emissions but on how roles, costs and risks are distributed fairly across the value chain.

"Everyone wants to lower their emissions, but the real test is whether policymakers, fuel producers, airports, airlines, financiers, and infrastructure operators are aligned on what success looks like, who carries which roles, and how costs and risks are managed fairly," she said, noting that Malaysia's SAF value chain is "still moving" and the industry is "still finding the right solution."

She said Petronas is evaluating a potential 1% SAF blending mandate as a starting point to provide sufficient investment certainty for the company's biorefinery commitments and broader collaboration efforts in Malaysia.

Diversifies feedstock beyond HEFA and Euglena partnerships

Fikri said Petronas is investing in partnership with Euglena biorefinery projects, signaling a deliberate move to diversify beyond hydroprocessed esters and fatty acids (HEFA) as the supply of used cooking oil becomes increasingly constrained globally, echoing concerns raised elsewhere about post-2035 feedstock limitations facing the dominant HEFA pathway.

"As more biorefineries are built on HEFA, and as UCO becomes constrained, there is clearly a need to establish the next pathway, and to determine how the industry can enable that," she said, framing feedstock pathway diversification as central to generating broader bio-economy growth for Malaysia.

Fikri added that Petronas views its own entry into SAF and biorefinery investments as a deliberate step into the energy transition, distinct from the company's historically oil-dominant portfolio, and describes collaboration across feedstock supply, technology, airlines, and government policy as essential to building a "sustainable and credible" SAF ecosystem in Malaysia.

The Pengerang Integrated Complex in Johor, with a capacity of about 650,000 mt/year, is a joint venture between Petronas, Eni and Euglena. This facility has received a license to construct but has not yet commenced production.

Platts, part of S&P Global Energy, assessed sustainable aviation fuel HEFA-SPK FOB Straits at $2,405/mt July 7, down $20/mt from July 6.

The SAF FOB Straits premium was assessed at $1,497.50/mt over Platts Jet Kero FOB Singapore forward curve (MOPs), down $34.50/mt from July 6.