Malaysia eyes UCO, POME export curbs to secure feedstock for SAF push

Malaysia is considering restricting exports of used cooking oil and palm oil residues as part of a broader strategy to secure feedstock supplies for its emerging sustainable aviation fuel sector, senior government officials said, according to local media reports.

Malaysia is targeting the production of nearly 1 million metric tons/year of SAF by 2028, underpinned by two domestic facilities, Plantation and Commodities Minister Johari Abdul Ghani told the upper house of the Malaysian Parliament Dec. 15.

A Hong Kong-based company, EcoCeres, already operates a SAF plant in Malaysia with a capacity of 350,000 mt/year, while state-owned Petronas is developing a second facility with 650,000 mt/year of capacity, expected to be completed by 2028, Ghani said, according to local media reports.

"To ensure sufficient and stable raw material supply, the government is adopting two main approaches," Ghani said.

Under the first approach, Malaysia currently continues to allow exports of used cooking oil, as domestic SAF production has yet to fully ramp up. However, the government is considering halting UCO exports in the future to safeguard feedstock availability once large-scale SAF production begins, Ghani said.

The second approach focuses on strengthening circular economy practices in the plantation sector, particularly through the use of palm oil waste streams as SAF feedstock.

Ghani said materials such as palm oil mill effluent, empty fruit bunches and other palm biomass residues that still contain recoverable oil would be reprocessed for SAF and other green energy applications, according to local media.

"Emphasis on the circular economy is crucial to ensure a sustainable supply of raw materials for the country's SAF industry," Ghani said, adding that the strategy would also support Malaysia's broader energy transition and green industry development goals.

Malaysia is the world's second-largest palm oil producer and has been positioning itself as a regional SAF hub by leveraging access to biomass-based feedstocks, streamlining licensing approvals and facilitating investment under its National Energy Transition Roadmap.

Platts, part of S&P Global Energy, last assessed POME FOB Malaysia at $1,055/mt Dec. 12, unchanged day over day, for the second half of December to January loading cargoes.

Platts assessed POME Indonesia domestic at Rupiah 12,400/kg, equivalent to $744.65/mt Dec. 12, unchanged day over day, on a DAP Dumai basis for December delivery.