KUALA LUMPUR, 10 September 2025 — Southeast Asia is gearing up to emerge as a major net exporter of biofuels, especially toward Europe, as its production capacity begins to outstrip domestic demand, said Ahmad Adly Alias, Vice President of Refining, Marketing and Trading at Petronas, during the APPEC conference in Singapore.
A Region Ramping Up Production and Capacity
Petronas forecasts that by 2030, Asia’s sustainable aviation fuel (SAF) capacity will reach 4 million metric tons annually, supported by plentiful feedstocks and a rapidly expanding production infrastructure. Additionally, the region’s biofuel transport demand is expected to balloon to 250 million litres per year by the same year—the highest growth rate globally—highlighting robust future consumption.
Petronas’ Strategic Expansion: Pengerang Biorefinery
To tap this growth, Petronas has launched a joint venture biorefinery project in Pengerang, Johor, in partnership with Enilive (a subsidiary of Italy’s Eni) and Japanese firm Euglena. The facility is designed to produce 650,000 metric tons of advanced biofuels per year, with operations slated to commence in the second half of 2028.
Strategic Relevance for Southeast Asia
1. Boosting Regional Energy Export Credentials
The anticipated surplus in biofuel production positions Southeast Asia—notably Malaysia—as a key supplier to global markets. Europe, under pressure to reduce aviation emissions, is a particularly strategic export destination. Petronas’ Pengerang facility could make Malaysia a critical node in the emerging sustainable fuel supply chain.
2. An Inflection Point for Investment and Infrastructure
Expanding capacity, including major projects like Pengerang, signals a deeper shift in Southeast Asia’s energy trajectory—from traditional, imported fuels to regional, high-tech energy production and export capabilities.
3. Elevating ASEAN’s Role in Global Climate Transition
Growing biofuel output enhances the region’s relevance to global decarbonisation goals. Southeast Asia may increasingly attract foreign capital and industrial partnerships, such as Petronas’s collaboration with Enilive, reinforcing its emergence as a sustainable energy hub.
4. Strengthening Energy Security and Economic Diversification
By ramping local biofuel production, ASEAN countries lower reliance on fossil fuel imports while building resilience against energy price shocks—especially important for economies balancing growth with green transition.
