KUALA LUMPUR (Nov 26): The Plantation and Commodities Ministry (KPK) is considering several tax incentives to attract investors into Malaysia to build a production hub for sustainable aviation fuel (SAF).

Its minister Datuk Seri Johari Abdul Ghani said Malaysia, as the world's second-largest palm oil producer, is in a strategic position to become a leading global SAF producer.

He said it can leverage raw materials (feedstock) including empty fruit bunches (EFBs), palm oil mill effluent (POME), animal fat, microalgae and used cooking oil to produce SAF.

"Each flight can use up to 46 to 47% mixed oil from this biofuel with the excess exported to countries that lack this capability," he said during the minister's question time in response to Khairil Nizam Khirudin's (PN-Jerantut) question on SAF and its potential added value to the national economy at the Dewan Rakyat on Tuesday.

Johari said in line with the Malaysia Aviation Decarbonisation Blueprint (MDB), the KPK in collaboration with the Investment, Trade and Industry Ministry (Miti) is working to develop a document on a national strategy for SAF to support Malaysia's SAF production and consumption industries.

He also emphasised the need for SAF production factories such as EcoCeres Renewable Fuels Sdn Bhd (Hong Kong)'s first factory which has a 350,000-tonne capacity, and the second factory by Petronas, which is planned to produce 650,000 tonnes.

"When both these factories are operational, Malaysia can potentially produce up to one million tonnes of SAF a year," he said.

He added that Malaysia is expected to start producing SAF in 2027, with capacity to rise in stages depending on plant capacity and raw materials availability.

He said this initiative is in line with Malaysia's agenda to become Southeast Asia's main SAF producer.

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