Partnership with UAE poised to transform aviation sector, operational by 2029
KUALA LUMPUR: Airlines will have greater access to sustainable aviation fuel (SAF) with the setting up of a state-of-the-art refinery in Port Klang, a US$500mil (RM2.19bil) collaboration between UAE-based Bin Zayed International Group (BZI) and Malaysia’s FatHopes Energy (FHE).
The two firms announced that the facility – among the first of its kind in South-East Asia – will be one of the world’s most forward-looking SAF refineries.
It is expected to transform the regional clean aviation landscape by producing SAF via the Hydroprocessed Esters and Fatty Acids pathway, which currently accounts for over 80% of global SAF production.
According to BZI (Malaysia) Berhad managing director Datuk Seri Dr Shamir Kumar Nandy, the project is slated to break ground in 2026 and begin commercial operations by 2029.
“We are underwriting the entire sum for now by ourselves. Based on FatHopes’ findings and updates, they’re in the process of getting the necessary approvals and sanctions before they can break ground.
“So I believe that will be a year down the road – about 12 months from today,” he said at a press conference here yesterday.
Also present at the announcement was Natural Resources and Environmental Sustainability Minister Nik Nazmi Nik Ahmad.
Shamir said the partnership combines BZI’s global investment expertise and FHE’s leadership in sustainable biofuel feedstock aggregation, laying the groundwork for a highly diversified and scalable SAF platform in the region.
He added that the Port Klang refinery is a key element in Malaysia’s ambition to produce one million tonnes of SAF annually, solidifying the nation’s role in the global SAF economy.
“This initiative has the potential to reimagine the future of flight,” said Shamir.
“It’s about profit, people and the planet – but most importantly, it’s for the planet,” he added.
FHE chief executive officer Vinesh Sinha said the project, currently in the feasibility stage, will have a production capacity of 300,000 tonnes per annum, requiring roughly 330,000 tonnes of feedstock.
He noted the technology in use can process various feedstocks, guided by prevailing policies and certifications.
While BZI has fully committed to the financing, Vinesh highlighted that the primary challenges in the refinery’s development are technical in nature.
“There’s a lot of input materials we need – hydrogen and nitrogen, which are major components of the manufacturing process.
“We are in the midst of identifying sources for those. Then there’s the port infrastructure, which is also a key factor.
“On our end, we are really focused on technical readiness and securing environmental impact assessment clearance for this particular plant,” Vinesh added.
Earlier in his speech, Nik Nazmi called the project a “game-changer” for Malaysia’s energy and aviation sectors, noting its alignment with the country’s climate goals under the Paris Agreement.
“Air travel is essential, but it must become sustainable. This refinery will help decarbonise the aviation sector while enhancing our energy security and supporting Malaysia’s net-zero aspirations,” he said.
Nik Nazmi also highlighted the project’s socio-economic value, saying it will create jobs and benefit communities involved in the biofuel supply chain.
“This project shows that sustainability and economic opportunity can go hand in hand.”
