Malaysia’s ambitions to develop a sustainable aviation fuel (SAF) industry face significant challenges as stakeholders seek to balance environmental goals with economic realities, industry leaders said at Aviation Sustainability Day 2026 held on October 19 at Kuala Lumpur International Airport.
The event, co-hosted by Malaysia Aviation Group (MAG) and Malaysia Airports Holdings Bhd (MAHB), highlighted the need for enhanced coordination across the aviation sector to support the country’s target of achieving net-zero carbon emissions by 2050. Both airports and airlines must align their infrastructure development, investment strategies, and operational priorities to advance this transition, officials emphasized.
Datuk Mohd Izani Ghani, managing director of MAHB, stressed that achieving decarbonisation objectives requires integrated planning and long-term commitments from all parties involved. MAG president and group CEO Captain Nasaruddin A Bakar echoed this view, underscoring the importance of a collective approach involving government, regulators, industry partners, and the broader aviation ecosystem.
MAG has set ambitious sustainability targets, including reducing emissions intensity by 30% to 35% by 2030 and 40% to 45% by 2035. In addition, the group aims to cut building energy intensity by 20% and increase waste diversion to 55% by 2030. The airline group recently became the first in ASEAN to receive certification under the Sustainable Procurement module of the International Air Transport Association’s Integrated Sustainability Programme and has already retired over 80,000 emissions units under the Carbon Offsetting and Reduction Scheme for International Aviation.
Despite these commitments, scalability of SAF production remains a key concern. Industry representatives pointed to the need for clearer regulatory frameworks, a reliable supply of sustainable feedstocks, and stronger market demand to support a commercially viable domestic SAF sector. Sustainable materials such as used cooking oil and agricultural residues present opportunities but are constrained by availability, cost, and processing challenges.
Captain Mohd Radzi Mohamad Alias, deputy CEO (regulatory) of the Civil Aviation Authority of Malaysia, noted the country’s strategic advantages including its energy infrastructure, manufacturing base, and logistics network as factors that could favor SAF development. However, MAG’s group chief sustainability officer Philip See Yew Jin warned that even in optimistic scenarios, feedstock limitations may hinder the ability to meet potential SAF mandates by 2035, necessitating careful planning to avoid undermining the industry’s competitiveness.
Hardeep Singh Kirpal Singh, head of commercial business at PETRONAS Dagangan Bhd, emphasized the role of affordability and economies of scale in determining the pace of SAF production. He highlighted that production decisions must weigh commercial viability alongside ambition, with demand certainty critical for producers’ investment confidence.
Panelists agreed that SAF adoption should proceed incrementally to manage cost impacts. See cautioned that SAF is expected to carry a price premium over conventional jet fuel, and Malaysia’s price-sensitive market may struggle with aggressive mandates. However, delaying definitive policy could lead to sharper price hikes later, posing challenges for consumer acceptance and industry sustainability.
As Malaysia progresses toward its aviation decarbonization goals, stakeholders underscored the importance of a coordinated, measured approach that balances environmental imperatives with economic and operational considerations.