The Edge Markets
13th December, 2021

KAJANG (Dec 13): Malaysia has ventured into the production of second-generation biodiesel and biojet fuels, which are expected to be commercialised for the global market in the next four to five years, according to Plantation Industries and Commodities Minister Datuk Zuraida Kamaruddin.

She said this significant milestone was achieved following the signing of a memorandum of understanding (MoU) on the technical exchange on the production of second-generation biodiesel and biojet fuels in Malaysia on Monday (Dec 13).

The MoU, entered into by the Malaysian Palm Oil Board, Pengerang Maritime Industries Sdn Bhd, Shanxi Construction Investment Group Co Ltd, and the Institute of Coal Chemistry, Chinese Academy of Sciences will see the setting up of a hydrogenated vegetable oil (HVO) plant in Pengerang, she said.

The HVO plant has the potential to produce sustainable aviation fuels (SAFs) known as biojet fuels, which involve the cracking and hydrogenation of palm oil to become a hydrocarbon fuel that can be utilised for the aviation industry.

Approximately RM3 billion investment is needed for the construction of the plant, including land acquisition and infrastructure, Zuraida said, citing the first phase of the plant would have 500,000-tonne-capacity production per annum.

“This collaboration on the HVO plant in Malaysia will further promote economic growth. I firmly believe that this project will add more value to Malaysian palm oil products by strengthening trade exchange of high-value-added products,” she told a press conference after the MoU signing ceremony here.

Zuraida said a study of second-generation biodiesel and biojet fuels involving green energy technology was carried out in the past six months and would likely be completed over the next six months.

“Currently, the industry is led by Finland-based company Neste Corp, which produces HVO in Singapore, [both of which are] non-palm oil producing countries.

“Malaysia is the world’s second-largest palm oil producer and China is one of the countries importing our palm oil … I think we should be able to do better than them (Neste) in time to come,” she pointed out.

Shanxi general manager of oversea department Wang Chongjun said construction of the HVO plant would start once the study is completed to determine the type of technology and facilities required.

“We are planning to use Malaysian palm oil products, which can be palm oils that have refined all nutrients, such as vitamins or waste oils, for the second-generation biodiesel and biojet fuel production.

“The current order of the production planning is biojet fuels or SAFs, green diesel and the corresponding green chemicals products that accompany the production,” he said, adding that the products are targeted to be exported to the European and Chinese markets.