New Straits Times
13th December, 2021

KUALA LUMPUR: Malaysian Palm Oil Board (MPOB) has partnered with Pengerang Maritime Industries Sdn Bhd, Shanxi Construction Investment Group Co Ltd (SCIG) and Chinese Academy of Sciences’ Institute of Coal Chemistry to produce biodiesel and biojet fuel in Malaysia.

Plantation Industries and Commodities Ministry said MPOB had signed a Memorandum of Understanding (MoU) for the production of second-generation biodiesel and biojet fuel at Pengerang Maritime Industrial Park (PMIP) in Johor.

“Malaysia wishes this bilateral cooperation will strengthen the relationship between the two countries. China is among the biggest importing country of Malaysian palm oil,” the ministry said in a statement today.

China imported 2.73 million tonnes of palm oil from Malaysia in 2020.

The ministry said the collaboration can be a catalyst for China’s acceptance of the Malaysian Sustainable Palm Oil (MSPO) certified palm products as feedstock for biofuel production which will enhance MSPO recognition in the global market.

“This investment can be seen as a commitment between Malaysia and China in exploring new advanced technology involving palm oil products in lieu of the United Nations Climate Change Conference (COP26) to reduce carbon intensity (against GDP) by 45 per cent by 2030 for Malaysia, and the Dual Carbon commitment for China targeting carbon neutral by 2060.”

SCIG is a state-owned enterprise (SOE) wholly owned and operated by the Shanxi Provincial People’s Government of China.

The ministry said the SOE intends to invest in a hydrogenated vegetable oil (HVO) plant in Malaysia.

HVO is also known as second generation biofuel in which palm oil is cracked and hydrogenated to become hydrocarbon fuel.

The development project for each HVO plant is expected to bring foreign direct investment worth RM3 billion with job creation of nearly 800 workers for Malaysia.

The project provides a platform for both countries to further strengthen technical collaboration in producing second generation biofuel in the future.

The HVO plant has the potential to produce sustainable aviation fuel (SAF) which is also known commonly as biojet fuels.

The project will also add more value to Malaysian palm oil products by strengthening trade exchanges in the high value-added product.

The HVO can be produced using waste and off-spec oils or by-products which complement the waste-to-wealth holistic approach of the industry, other than using normal palm oil products (CPO, RBD palm olein or RBD palm stearin).

HVO is the next potential market for palm biofuel as increasing demands can be seen in many countries including Europe.

The HVO plant from the investment would target these important markets aiming at higher value additions.