KUALA LUMPUR (Nov 4): The government is reviewing the proposed implementation of a 1% sustainable aviation fuel (SAF) blending mandate for international flights departing from the Kuala Lumpur International Airport (KLIA) effective January 2027, taking into account current geopolitical developments that are affecting the global energy market.
Plantation and Commodities Minister Datuk Seri Noraini Ahmad said her ministry is currently holding engagement sessions with stakeholders to plan the implementation of the mandate.
“The government acknowledges the challenges currently faced by the aviation industry, particularly rising operating costs and financial pressures,” she said.
She was speaking during the winding-up session of the Supply Bill 2027 (Budget 2027) and the motion on the 2027 development expenditure estimates at the committee stage for the Plantation and Commodities Ministry in the Dewan Rakyat on Wednesday.
Noraini said Malaysia has entered the commercial production phase through the operations of the EcoCeres plant in Johor since October 2025, with a licensed capacity of 420,000 metric tons per year, while the PETRONAS biorefinery in Pengerang is expected to begin operations in the second half of 2028 with an annual capacity of 650,000 metric tons.
“The two projects are expected to provide a combined production capacity of more than one million metric tons annually by 2028. This will indirectly strengthen Malaysia’s position as a regional SAF production hub,” she said.
In a related development, Noraini said the government is also strengthening the country's biodiesel infrastructure to support its target of raising the biodiesel blending rate to B30 (30% palm-based methyl ester) by 2030.
She said that the allocation under the First Rolling Plan of the 13th Malaysia Plan (13MP) has been approved to upgrade blending facilities at four strategic petroleum depots — in Sandakan, Tawau and Sepanggar in Sabah, as well as Bintulu in Sarawak.
Under the Second Rolling Plan of the 13MP, the government has also approved an allocation to upgrade blending facilities at two additional depots in the Klang Valley.
Meanwhile, the government has allocated RM1.37 billion under the 13MP for the Oil Palm Smallholders Replanting Financing Incentive Scheme to support efforts to boost productivity and output of the country's palm oil industry.
“Based on the Budget 2027 allocation for oil palm replanting programmes, the ministry expects 1,500 independent smallholders, covering a total area of 5,900 hectares, to benefit from the Oil Palm Smallholders Replanting Programme 2.0.
“Meanwhile, 740 oil palm smallholders, covering a total oil palm area of 11,110 hectares, are expected to benefit from the Oil Palm Replanting Financing Programme,” she said.
The minister said Agrobank is among the financial institutions providing financing facilities under these programmes, while Bank Rakyat has also agreed to participate in the latest programme.
“The Plantation and Commodities Ministry will assist in facilitating the applications, as our target is to achieve a 4% oil palm replanting rate. The current rate is already above 3%, and we want to ensure that this replanting target is achieved,” Noraini said.
The Dewan Rakyat subsequently approved the RM485.69 million allocation for the Plantation and Commodities Ministry under Budget 2027, covering both operating and development expenditure, with a majority vote in favour following debates by 16 members of Parliament.
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