Malaysia in talks with partners to produce palm oil-based bio-jet fuel

Malaysia is looking for new markets to boost demand for the vegetable oil. (Reuters)
Updated 21 November 2019

Malaysia in talks with partners to produce palm oil-based bio-jet fuel

  • Malaysia, the world’s second biggest producer of palm oil

KUALA LUMPUR: Malaysia aims to start producing palm oil-based bio-jet fuel within five years and is in talks with several potential partners about setting up a plant, the head of the industry’s marketing board said on Wednesday.

Malaysia, the world’s second biggest producer of palm oil, is looking for new markets to boost demand for the vegetable oil, widely used in everything from soap to lipstick to snack foods.

Ahmad Parveez Ghulam Kadir, director general of the Malaysian Palm Oil Board (MPOB), said Malaysia was exploring “all possibilities” with potential investors as it expected demand for bio-jet fuel to grow in the coming years.

Last month, Malaysia allocated funds in its 2020 budget to study the use of palm oil-based bio-jet fuel.

“In five years, we hope we can have our first bio-jet production in Malaysia,” Ahmad Parveez told Reuters in an interview on the sidelines of an industry conference. MPOB is a state agency responsible for the promotion and development of palm oil. He did not name the potential investors or say who would fund a plant.

In April, the Malaysian Palm Oil Council in Beijing signed a memorandum of understanding with Chinese industry body the China Chamber of Commerce of Foodstuffs and Native Produce that would see China invest at least 2 billion ringgit ($480 million) in a Malaysian bio-jet fuel plant. However, Ahmad Parveez said on Wednesday that was not a final agreement and that discussions with all potential partners were at a preliminary stage.

Malaysia’s interest in producing bio-jet fuel comes as global airlines look to reduce emissions from flying to comply with a plan by the International Civil Aviation Organization (ICAO), the UN body that sets standards for international air travel.

The plan, known as Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), looks to cap CO2 emissions from air travel at 2020 levels, mitigating the environmental impact of flying even as passenger traffic is forecast to grow.

Indonesia, the top producer of palm oil, is also eyeing aviation as a new market for palm oil. Indonesian President Joko Widodo in August asked his ministers to study further the possibility of mixing palm oil-based fuel with jet fuel.

MPOB’s Ahmad Parveez also said Malaysia's palm oil production will not exceed 20 million tons in 2019 and 2020, compared with 2018 output of 19.5 million tons.

Indonesia and Malaysia will both see little growth in output next year, potentially leading to a supply deficit and higher prices, leading industry analyst James Fry said on Wednesday.


China's aviation regulator raised concerns with Boeing on 737 MAX design changes

Updated 12 December 2019

China's aviation regulator raised concerns with Boeing on 737 MAX design changes

  • China is reviewing the airworthiness of the plane
  • China was first country to ground plane in March

BEIJING: China’s aviation regulator raised “important concerns” with Boeing Co. on the reliability and security of design changes to the grounded 737 MAX, it said on Thursday, but declined to comment on when the plane might fly again in China.
China is reviewing the airworthiness of the plane based on proposed changes to software and flight control systems according to a bilateral agreement with the United States, Civil Aviation Administration of China (CAAC) spokesman Liu Luxu told reporters at a monthly briefing.
He reiterated that for the plane to resume flights in China, it needed to be re-certified, pilots needed comprehensive and effective training to restore confidence in the model and the causes of two crashes that killed 346 people needed to be investigated with effective measures put in place to prevent another one.
China was the first country to ground the 737 MAX after the second crash in Ethiopia in March and had set up a task force to review design changes to the aircraft that Boeing had submitted.
The US Federal Aviation Administration (FAA) will not allow the 737 MAX to resume flying before the end of 2019, its chief, Steve Dickson, said on Wednesday.
Once the FAA approves the reintroduction into service, the 737 MAX can operate in the United States, but individual regulators could keep the planes grounded in other countries until they complete their own reviews.
“Due to the trade war, the jury is still out on when China would reintroduce the aircraft,” said Rob Morris, Global Head of Consultancy at Ascend by Cirium.
Chinese airlines had 97 737 MAX jets in operation before the global grounding, the most of any country, according to Cirium Fleets Analyzer.