Malaysia’s Green Flight Path: Becoming Southeast Asia’s Sustainable Aviation Fuel Hub

Globally, air travel demand is surging. Passenger numbers are rebounding strongly post-pandemic, with the International Air Transport Association (IATA) forecasting more than 4.7 billion travelers in 2025—surpassing pre-COVID levels. However, this boom in aviation comes with increased scrutiny over the sector’s carbon footprint. Under the International Civil Aviation Organization’s (ICAO) Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), airlines are now required to cap and offset emissions growth beyond 2019 levels. Compliance is no longer optional—regulators and customers alike are demanding more sustainable flight options. Despite the current cost premium, demand for SAF is rapidly rising, as airlines race to meet environmental targets and secure long-term fuel supply contracts. Importantly, this demand is expected to grow exponentially as global production capacity increases, helping bring down costs through economies of scale and innovation.

Sustainable aviation fuel—especially when produced from waste oils and residues—offers a dramatic reduction in life-cycle CO₂ emissions compared to fossil-derived jet fuel. Studies consistently show that SAF made from waste feedstocks can cut greenhouse gas emissions by up to 80%. But the climate benefits of SAF go beyond just carbon dioxide. SAF contains significantly lower levels of sulfur and aromatic compounds, which means that it produces far less soot during combustion. This reduction in soot results in fewer contrails and thinner cirrus cloud formations—short-lived but potent contributors to climate forcing. In test flights using 100% SAF, researchers observed a reduction in contrail ice particles of more than 50% compared to traditional jet fuel.

However, the climate effects of these high-altitude clouds are nuanced. While contrails and the cirrus clouds they generate can trap outgoing heat (a warming effect), they also reflect incoming solar radiation (a cooling effect), especially during daytime. The net climate impact of contrails depends heavily on flight altitude, latitude, time of day, and local atmospheric conditions. Interestingly, studies have shown that regional flights—such as those operating within Asia—often cruise at lower altitudes and under conditions where contrails can have a neutral or even net cooling effect. In this context, using SAF on regional routes not only reduces CO₂ and particulate emissions, but may also enhance the cooling benefits associated with specific flight profiles in the region.

This complex interplay of atmospheric science makes Malaysia’s potential role in the SAF value chain even more strategic. By capitalizing on its extensive palm oil and waste oil infrastructure, Malaysia can offer a high-volume, low-carbon feedstock supply to SAF producers. The country is already home to companies like FatHopes Energy, which has built a sophisticated collection and logistics network for UCO and palm oil byproducts. With the right policy support and investment incentives, Malaysia could become the de facto SAF manufacturing hub for ASEAN—producing clean fuel not just for its own carriers, but for the entire region’s growing aviation sector.

More than just an environmental win, this pivot represents a major economic opportunity. A strong SAF industry could invigorate Malaysia’s downstream palm oil sector, create high-skill jobs, and attract international investment in refining technologies. Additionally, SAF deployment in the region would improve local air quality by reducing particulate matter and nitrogen oxides—especially important in urban airport corridors. And while SAF is the headline today, the momentum it generates could position Malaysia at the forefront of broader renewable fuel innovation. The same feedstock and refining technologies used for SAF can be adapted for the production of hydrotreated vegetable oil (HVO)—a second-generation biofuel that can replace diesel in road, marine, and industrial engines.

In short, Malaysia stands at the intersection of agricultural sustainability, energy innovation, and regional climate leadership. With its existing strengths in palm-based resources and waste aggregation, it is ideally placed to fuel Southeast Asia’s transition to cleaner skies. As global airlines seek lower-carbon solutions and SAF becomes a non-negotiable part of aviation’s future, Malaysia’s readiness to scale SAF production—combined with its capacity to lead in second-generation biofuels—could give the country a powerful edge in the emerging green economy.