Malaysia reviews 1% SAF blending mandate for international flights from KLIA

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1% SAF mandate review at KLIA

Highlights

Malaysia is reviewing the 1% SAF blending mandate for international flights from KLIA, taking into account operating costs and financial pressures on the industry.
EcoCeres’ operations in Johor and PETRONAS’ biorefinery in Pengerang are expected to provide SAF production capacity of more than one million metric tonnes per year by 2028.
The government approved RM1.37 billion for the Oil Palm Smallholders’ Replanting Financing Incentive Scheme and RM485.69 million for the ministry under the 2027 Budget.

This article was translated from the original. Read the original version by our correspondent here.

SAF policy review and supply readiness

As reported by The Edge Malaysia, Plantation and Commodities Minister Datuk Seri Noraini Ahmad said her ministry is holding engagement sessions with stakeholders to plan the mandate’s implementation. She said the government recognises the challenges facing the aviation industry, particularly rising operating costs and financial pressures.

Noraini said Malaysia had entered the commercial production phase with the EcoCeres plant in Johor beginning operations in October 2025, with a licensed capacity of 420,000 metric tonnes per year. Meanwhile, PETRONAS’ biorefinery in Pengerang is expected to begin operations in the second half of 2028, with an annual capacity of 650,000 metric tonnes. The two projects are expected to provide combined production capacity of more than one million metric tonnes per year by 2028, strengthening Malaysia’s position as a regional SAF production hub.

Biodiesel allocations and support for smallholders

In a related development, the government is also strengthening the country’s biodiesel infrastructure to support its target of increasing the biodiesel blending rate to B30 by 2030. Under the First Rolling Plan of the 13th Malaysia Plan, allocations have been approved to upgrade blending facilities at four strategic petroleum depots: Sandakan, Tawau and Sepanggar in Sabah, and Bintulu in Sarawak.

Under the Second Rolling Plan of the 13th Malaysia Plan, the government also approved funding to upgrade blending facilities at two more depots in the Klang Valley. At the same time, the government allocated RM1.37 billion under the 13th Malaysia Plan for the Oil Palm Smallholders’ Replanting Financing Incentive Scheme to boost productivity and output in the country’s palm oil industry.

Noraini said that, based on the 2027 Budget allocation for oil palm replanting programmes, the ministry expects 1,500 independent smallholders covering 5,900 hectares to benefit from the Oil Palm Smallholders Replanting Programme 2.0. Meanwhile, 740 oil palm smallholders covering 11,110 hectares are expected to benefit from the Oil Palm Replanting Financing Programme.

She said Agrobank is among the financial institutions offering financing facilities under the programme, while Bank Rakyat has also agreed to join the latest programme. The House of Representatives subsequently approved an allocation of RM485.69 million for the Ministry of Plantation and Commodities under the 2027 Budget, covering operating and development expenditure, with majority support following a debate by 16 Members of Parliament.

Approval of 27 data center projects under the Data Centre Task Force through July 2026 was previously reported by us as one of the key drivers of Malaysia’s digital infrastructure development, concentrated in Johor, Selangor and Negeri Sembilan. The article also detailed estimated investment value, projected high-skilled job creation, as well as minimum local content requirements and regular monitoring to ensure projects are implemented as required.

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