Malaysian state-owned oil major Petroliam Nasional Berhad (PETRONAS) and Japan-headed petroleum product supplier Idemitsu Kosan Co., Ltd. (Idemitsu) have signed a Memorandum of Understanding (MoU) to enhance capabilities across the sustainable aviation fuel (SAF) supply chain and optimize the route to market for SAF, marking a significant step in both companies' ongoing commitment to producing lower carbon energy solutions for customers worldwide.
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Under the terms of the MoU, PETRONAS, and Idemitsu will focus on a feasibility study to scale up bio feedstock possibilities, production cost analysis, and security in ensuring a steady and efficient supply chain for the sustainable development of SAF.
Develop feedstocks and distribution
This includes exploring the supply potential of non-edible oil feedstock trees suitable to produce SAF, such as Pongamia and Jatropha.
In addition, both companies will also work on establishing a robust SAF sales and distribution network to ensure SAF accessibility to airlines.
With ongoing endeavours in the space of cleaner energy solutions, PETRONAS will soon have the capacity for large-scale production of SAF and other types of biofuels by 2026 through its biorefinery in Pengerang, Johor, and co-processing in Melaka.
This will enable PETRONAS to capture markets beyond aviation to include transportation as well as Formula One and its logistics team.
PETRONAS also boasts a strong global presence which the partnership is able to tap in order to access a broader range of feedstocks while seizing market growth opportunities within the expanding SAF sector worldwide.
Our partnership with Idemitsu builds on a legacy of almost five decades of shared ambition to address the everchanging energy needs worldwide. In the latest collaboration, our valued partner will continue to have access to our distinctive advantage, enabling us to collectively deliver impactful outcomes for the benefit of our end customers. This is the standard of value we consistently offer to our business-to-business customers, said Datuk Sazali Hamzah, EVP and CEO of Downstream at PETRONAS.
Utilize SAF technologies
Idemitsu’s expertise resides in its technologies to produce SAF from non-fossil renewables to help create a competitive future for the aviation industry. This is exemplified by its ATJ and HEFA technologies, which convert ethanol and used cooking oils (UCO) respectively into SAF.
Idemitsu is working to establish a domestic SAF production system of 500 million litres per year to achieve the goal set by the Government of Japan and the aviation industry to replace 10 percent of jet fuel consumption refuelled by airlines in Japan with SAF by 2030.
To this end, in addition to a demonstration using ATJ technology at the Chiba Complex, Idemitsu is also considering deployment of HEFA technology for Unit 2 and beyond, with the aim of starting supply in the late 2020s.
As the two companies have overcome various challenges together, we expect this new initiative will contribute to the achievement of carbon neutrality in the aviation industry through the early implementation and deployment of SAF in society. Idemitsu is engaged in the development of various raw materials and marketing for SAF, and we will utilise and further develop them in this joint study, said Masahiko Sawa, Director and Managing Executive Officer at Idemitsu Kosan.