This article is also published on the Jakarta Post.
As global aviation faces mounting pressure to cut emissions, ASEAN has a chance to position itself at the forefront of a cleaner aviation future. Aviation remains one of the most challenging sectors to decarbonize, accounting for 2.5 percent of global energy-related carbon dioxide emissions in 2023, with that figure projected to grow rapidly. Unlike power generation and most other transport sectors, aviation remains heavily dependent on liquid fuels because of current battery limitations.
With air traffic in Southeast Asia continuing to surge and emission policies tightening globally, sustainable aviation fuel (SAF) offers the most scalable near-term tool to reduce emissions while improving regional energy security.
Backed by abundant regional resources, ASEAN is uniquely positioned to become an international SAF hub - delivering significant economic and climate benefits. However, capturing this market will depend on how quickly member states can turn regional potential into a credible, scalable and internationally recognized supply chain.
The growing
urgency around SAF is closely tied to global mandates aimed at mitigating
aviation’s climate impact.
Under the International Civil Aviation Organization’s (ICAO) Carbon.
Offsetting and
Reduction Scheme for International Aviation (CORSIA), countries have agreed to
systematically reduce emissions from international flights. Starting in 2027,
these rules will apply more broadly across international routes, making
compliance a necessity for regional carriers.
In
response, several ASEAN countries are accelerating national measures to
integrate SAF into commercial fuel blends. Regional demand for SAF is projected
to skyrocket from 15,000 barrels per day in 2030 to over 700,000 barrels per
day by 2050, with Indonesia, Malaysia and Singapore driving the bulk of this
consumption.
This shifting
demand is reflected
in aggressive new national policies.
As the region’s primary air
hub, Singapore will require departing flights to use a 1 percent SAF blend
starting this year, scaling up to 3-5 percent by 2030. Indonesia is targeting
an initial 1 percent blend in 2027, with a long-term goal of achieving a 50
percent blend by 2060.
Meanwhile, Malaysia
is aiming for a 47 percent SAF blending mandate
by 2050 as part of its
broader target to achieve net-zero aviation emissions by the same year.
ASEAN
is already laying the production and commercial foundations to meet this
upcoming demand. Indonesia’s state-owned oil and gas company Pertamina has
developed a 2.4 percent SAF blend - one of the region’s earliest commercial
products - while its refining subsidiary has secured the CORSIA-aligned
International Sustainability and Carbon Certification (ISCC). In Malaysia,
Petronas signed a landmark agreement with the Malaysia Aviation Group in 2023
to supply over 230,000 tonnes of SAF starting in 2027.
Singapore and
Thailand are also among the region’s first movers in commercial production.
Singapore’s leading facility boasts an annual capacity of 1 million tonnes,
while Thailand’s current production of 6 million liters annually is slated to
scale up to 24 million liters.
Beyond refining
capacity, ASEAN’s true competitive advantage lies in its diverse feedstock base. A recent regional techno-economicassessment highlights vast potential to produce SAF from agricultural residues, forestry waste, and household
biowaste - including used cooking oil,
cassava, rice, corn, coconut, palm fruit and forestry byproducts.
If fully mobilised, the potential SAF supply from these regional feedstocks could reach up to 8.5 million
barrels per day by 2050. Combined with emerging refinery capacity and strategic
trading hubs, ASEAN has the structural elements to become a dominant global
supplier.
Realizing this potential will require more than just ramping up raw supply;
ASEAN must establish the
credibility and international compliance of its SAF production.
Under CORSIA, a fuel's environmental and commercial value depends strictly
on its lifecycle emissions
calculation. This accounting factors in everything from feedstock type and
production pathways to land-use impacts and supply-chain logistics. Feedstock
classification is highly sensitive;
whether a material is classified as a "waste," "residue,"
"by-product" or "coproduct" directly alters its assessed
carbon intensity.
Thailand
illustrates this exact challenge: the country is currently exploring a
country-specific emissions factor for
molasses-based alcohol-to-jet SAF. Under default global frameworks, molasses is treated as a coproduct, whereas domestic agricultural practices classify it as a low-value
byproduct of sugar production. Resolving these accounting discrepancies is
vital for regional competitiveness.
Current regional
development relies heavily
on used cooking oil utilized
via the Hydroprocessed Esters and Fatty Acids (HEFA) pathway. While commercially mature,
HEFA alone cannot provide
the volumes required
to meet long-term demand. ASEAN must diversify its technology roadmap
by investing in scalable alternative pathways for agricultural and forestry residues, such as Alcohol-to-Jet (ATJ), Fischer-Tropsch (FT) and Hydrothermal Liquefaction (HTL).
To
transform SAF ambitions into bankable infrastructure projects, national
frameworks must provide clear demand signals, subsidize certification processes
and derisk investments in feedstock supply chains.
At the
bloc level, existing platforms like the ASEAN Plan of Action for Energy
Cooperation (APAEC) and the ASEAN Sustainable Aviation Action Plan should be leveraged to harmonize
sustainability standards, map regional readiness gaps and facilitate
cross-border feedstock trading.
By strategically
linking feedstock-rich economies with regional refining centers and aviation
hubs, ASEAN can transform its fragmented strengths into a highly competitive,
integrated global value chain.
Cover image source: Freepik
