Asia is emerging as a major growth area for sustainable aviation fuel, driven by increasing government initiatives promoting environmental regulations

The Rise of Sustainable Aviation Fuel in Asia

Hidden within Singapore’s Tuas industrial area lies the globe’s largest sustainable aviation fuel (SAF) refinery. Here, waste materials such as used cooking oil and animal fats are transformed into fuel that powers aircraft.

This facility, established by Finnish energy company Neste in 2010, underwent a significant $1.9 billion upgrade in 2019. After reopening in 2023, it now has the capacity to produce up to one million tonnes of SAF each year. While most of Singapore’s sustainable jet fuel is shipped to Australia and Europe, Neste executive Mario Mifsud believes that Asia is poised to become a major market for SAF in the near future.

“We’re seeing Asian governments begin to introduce regulations supporting SAF,” said Mifsud, who manages renewable fuel sales and trading for EMEA and APAC at Neste, in an interview with Fortune. “Europe led the way, and as one country adopts these policies, others tend to follow.”

Singapore, for example, has announced that by 2026, SAF must account for 1% of all jet fuel used at Changi and Seletar airports, with plans to increase this share to 5% by 2030. This aligns with the International Civil Aviation Organization’s (ICAO) target of achieving net-zero carbon emissions by 2050.

“The initial 1% requirement may seem modest, but it’s a crucial first step,” Mifsud noted. “Other countries in the region will likely follow Singapore’s lead.”

Thailand is also moving forward, with plans to introduce national SAF standards this year. In July, Bangkok Air began using a 1% SAF blend, reducing carbon emissions by approximately 128 kilograms per flight. For comparison, a single passenger flying from London to New York typically generates about 493 kilograms of carbon emissions, according to Atmosfair, a German nonprofit.

South Korea joined the movement in May, becoming one of the first Asian nations to require SAF on international flights starting in 2027. The country aims to raise SAF’s share to between 7% and 10% by 2035.

On a global scale, Europe is leading the adoption of SAF, with the ReFuelEU policy mandating a 2% SAF blend by 2025 and a 70% target set for 2050.

As the aviation sector—responsible for about 2.5% of worldwide emissions—seeks greener solutions, the push for sustainable fuels is gaining momentum thanks to stronger government policies.

Expanding SAF Production

According to the ASEAN SAF 2050 Outlook report, Southeast Asia’s demand for SAF is expected to surge from 15,000 barrels per day in 2030 to over 700,000 barrels daily by 2025. Production is also projected to climb, with ASEAN forecasting up to 8.5 million barrels of SAF produced each day by 2050.

Malaysia’s Entry into SAF Manufacturing

On January 26, EcoCeres, an energy company based in Hong Kong, launched Malaysia’s first commercial-scale SAF plant in Johor Bahru, near Singapore. The facility can produce as much as 420,000 metric tonnes of SAF annually.

During the opening ceremony, Malaysia’s plantation and commodities minister, Noraini binti Ahmad, announced that the country would soon set its own SAF targets. “The National Energy Transition Roadmap includes an initial 1% SAF blending goal to stimulate demand and support the market’s growth,” she said. “This strategy positions Malaysia’s commodity sector as a responsible contributor to the global energy transition, while certified waste-based biomass adds value, strengthens supply chains, and encourages higher-value downstream activities.”

The Johor Bahru plant is EcoCeres’ second SAF facility, following its factory in Jiangsu, China, which produces 350,000 metric tonnes of SAF each year.

EcoCeres CEO Matti Lievonen described the new plant as the company’s first step toward international expansion. “Johor is an ideal location, with access to feedstock from Malaysia and neighboring countries, excellent shipping routes, and a skilled local workforce,” he said.

Challenges and the Path Forward

Aviation is responsible for about 2.5% of global carbon emissions, but decarbonizing the industry remains a challenge, especially for long-distance flights.

• Electric planes are only practical for very short routes due to battery limitations—jet fuel contains 30 times more energy per kilogram than even the best lithium-ion batteries.
• SAF production is also limited by the availability of suitable feedstock. The International Energy Agency has called on the industry to seek alternative sources beyond used cooking oil and animal fats.

“Renewable fuels are still in their early stages,” said Mifsud of Neste. “Unlike traditional oil extraction, collecting waste materials for renewable fuels is a much more complex process.”

This article was originally published on Fortune.com.