Malaysia, Chinese firm sign deal on second-generation biodiesel, biojet fuel

[KUALA LUMPUR] Malaysia and China's state-owned Shanxi Construction Investment Group on Monday signed a memorandum of understanding (MoU) to collaborate on the production of second-generation biodiesel and biojet fuel.

Shanxi Construction plans to invest in a hydrogenated vegetable oil (HVO) plant, also known as second-generation biofuel, in Malaysia's southern state of Johor, Malaysia's Commodities Ministry said.

"The HVO plant has the potential to produce Sustainable Aviation Fuels which is also known commonly as biojet fuels,"the ministry said, adding there was increasing demand for HVO including from Europe.

Each HVO plant is expected to bring foreign investment worth RM3 billion (S$971.4 million) and create nearly 800 jobs, it said.

The MoU is between the Malaysian Palm Oil Board, Pengerang Maritime Industries, Shanxi Construction, the Institute of Coal Chemistry, Chinese Academy of Sciences.

Wang Chongjun, general manager of Shanxi's overseas department, said the firm is exploring development of a green diesel refinery and related storage facilities in Johor's Pengerang Maritime Industrial Park using China's technology and Malaysia's palm oil products.

"The current order of the production planning is bio-jet fuel or sustainable aviation fuel, green diesel, and the corresponding green chemical products that accompany the production," Wang said in a speech.

The biodiesel and bio-jet fuel products will be used to meet the needs of the Chinese market but will also be exported to Europe and the United States, he said.

REUTERS