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Malaysia's used cooking oil exports will face "immediate and moderate" pressure next year as a sustainable aviation fuel (SAF) plant in Johor ramps up production, Deputy Plantation and Commodities Minister Datuk Chan Foong Hin told Reuters.
Chan explained that domestic players will actively seek to secure feedstock to meet the 350,000-tonne production capacity of the EcoCeres facility. This will force them to offer competitive prices to divert used cooking oil away from lucrative international export routes.
Chan added that the EcoCeres facility began operations in October and will be the first major exporter of ISCC CORSIA and ISCC EU-certified sustainable aviation fuel in Malaysia.
Rising Exports; Singapore The Largest Market
According to the Malaysian Palm Oil Board (MPOB), used cooking oil exports reached 465,257 tonnes in 2024, up from 310,368 tonnes in 2023. Singapore was the largest importer, taking 284,116 tonnes, followed by the United States and the European Union with 158,231 tonnes and 19,819 tonnes, respectively.
Chan said: "To manage domestic feedstock supplies and secure the competitiveness of the sustainable aviation fuel industry, the ministry, in collaboration with the Malaysian Palm Oil Board (MPOB), is currently reviewing and consulting with stakeholders on the potential implementation of a policy intervention to ensure a stable and sustainable supply of used cooking oil (UCO) to meet domestic industrial needs."
Chan also expects market demand to almost triple once the joint biofuel refinery between Petronas, Enilive and Euglena in Pengerang, targeted for completion in the third quarter of 2028, comes online.
Growing Demand For Feedstock
He added: "This plant requires a substantial feedstock capacity of 650,000 tonnes. Together, these two facilities will create annual feedstock demand of up to one million tonnes, putting them in direct competition with international buyers for global supplies of used cooking oil," noting that the supply chain challenge will lie in collecting the feedstock.
Therefore, to meet domestic demand, Chan said Malaysia must expand its infrastructure for collecting used cooking oil locally from households and businesses, without undermining supplies to other biodiesel sectors or resorting to uncertified imports.
On biodiesel, Chan expects production to remain stable next year and anticipates a moderate increase in domestic consumption as more companies roll out pilot programmes for higher-ratio biodiesel blending to meet their environmental, social and governance (ESG) targets.
Malaysia currently enforces a nationwide biodiesel mandate of 10%, although a 20% mandate is applied in the Federal Territory of Labuan and the Langkawi region, as well as in the state of Sarawak, excluding the Bintulu area.
Source: Reuters