Petronas Aims to Expand SAF Supply to International Airlines
07.24.2023 By News - NEWS

July 24, 2023 [New Straits Times]- National oil firm Petroliam Nasional Bhd (Petronas) is looking to expand its Sustainable Aviation Fuel (SAF) supply to international airlines, said executive vice president of downstream Datuk Sazali Hamzah.


In May this year, its subsidiary Petronas Dagangan Bhd signed an SAF offtake agreement with Malaysia Aviation Group (MAG), the parent company of Malaysia Airlines, as part of efforts to develop the green fuel on a commercial scale in Malaysia.

“We are looking for international airlines as well. SAF is not only for Malaysia but also Europe because they are willing to pay higher,” Sazali told Bernama on the sidelines of a recent media trip to the Mercedes-AMG Petronas F1 Team headquarters in Brackley, England.However, he did not elaborate on the plan.

Under the agreement with MAG, Petronas Dagangan will supply more than 230,000 tonnes of SAF to MAG’s airlines – national carrier Malaysia Airlines, and Firefly and MASwings – with the first delivery expected from 2027 at the Kuala Lumpur International Airport (KLIA).During its Annual General Meeting (AGM) in Istanbul in June, the International Air Transport Association (IATA) announced its expectation for overall renewable fuel production to reach an estimated capacity of at least 69 billion litres (55 million tonnes) by 2028.

SAF will account for a portion of this growing output which is being achieved through new renewable fuel refineries and the expansion of existing facilities.Importantly, it noted, the expected production has a wide geographic footprint covering North America, Europe and Asia-Pacific.

However, IATA has called on airlines in Asia-Pacific to strengthen their readiness in the transition to the SAF mandate, aided by government policies and incentives to encourage the scaling up of SAF production.This is due to the development of the SAF mandate in Asia-Pacific is not progressing as fast as in other regions.

IATA regional vice president for Asia-Pacific Philip Goh said a wide range of countries in the region were at different levels of awareness.”Japan and Singapore are quite forward. In the case of Malaysia, we have been talking to the Transport Ministry about SAF and its policies. We are quite happy that a task force which is involved in SAF development and policies have invited IATA to join in as part of the discussion,” Goh told Bernama.

He noted that the Asia-Pacific region needs to start building up SAF production.”It is going to take some years before we need material changes such as government policies that support more production of SAF and we are advocating that the government should introduce policies that will be friendly and incentivise its production.

“It is not meaningful to impose mandates on anything when there is not enough supply,” he added.Putrajaya is encouraging more local airlines to use SAF to reduce the rate of carbon emissions in the country and in line with the efforts towards a low-carbon economy.

This is in addition to meeting commitments under the mandatory phase of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

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