petronas reaches final investment decision for first biorefinery in pengerang, johor
petronas announced that it reached the final investment decision for its first biorefinery in Pengerang, Johor, in July, with commercial operations planned for 2028. the move expands the national oil‑and‑gas company’s…
Source: The Star · September 20, 2026 at 8:20 PM · AI-assisted report
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SINGAPORE, 20 SEPTEMBER 2026 —
petronas announced that it reached the final investment decision for its first biorefinery in Pengerang, Johor, in July, with commercial operations planned for 2028. the move expands the national oil‑and‑gas company’s downstream portfolio amid volatile oil markets and a global shift toward cleaner energy.
Market Impact
the company said the past twelve months have been marked by fluctuating demand, geopolitical tensions and macro‑economic uncertainty. to stay competitive, petronas is accelerating projects that support its aspiration to become a progressive energy hub. the 2022 launch of Gentari, its renewable‑energy arm, was cited as an earlier step toward diversification.
the biorefinery will be built with Italy’s Enilive and Japan’s Euglena, according to a petronas statement. the facility will produce sustainable aviation fuel, hydrotreated vegetable oil and bio‑naphtha, targeting rising demand in Asia and beyond. petronas highlighted that the plant aligns with Malaysia’s National Energy Transition Roadmap and will help advance the global bioeconomy.
petronas Dagangan and petronas Trading have already begun supplying biofuels ahead of the plant’s completion. the firms delivered sustainable aviation fuel to several airlines and provided HVO100 to power the Mercedes‑AMG petronas Formula One team’s trucks in the 2023 and 2024 European seasons. in partnership with Vitol, petronas also completed its first marine biofuel bunkering in Singapore, supplying B24—a blend containing 24 % used cooking oil—on the MT Lady Aegina.
to secure raw materials, petronas signed a memorandum of understanding with the Malaysian Palm Oil Board. the agreement explores the use of palm‑oil waste and other bio‑feedstocks for sustainable aviation fuel production. petronas said the collaboration will strengthen the domestic feedstock supply chain and create new markets for palm‑oil residues.
the biorefinery is expected to generate a domestic source of low‑carbon fuels for Malaysian industry. analysts note that linking the plant to the palm‑oil sector could boost demand for waste streams and diversify income for growers. the project also reduces reliance on imported biofuels, supporting national energy security.
datuk sazali hamzah, executive vice‑president and chief executive officer for downstream, said the new facility will strengthen petronas’ position in the bio‑fuel supply chain beyond trading. he added that the partnership with Enilive and Euglena will help build a comprehensive bio‑based ecosystem in Malaysia and advance the company’s net‑zero carbon emissions goal for 2050.
petronas expects the biorefinery to start up in 2028 and meet accelerating demand for sustainable aviation fuel, hydrotreated vegetable oil and bio‑naphtha across aviation, maritime and motorsport sectors. the company also plans to supply advanced sustainable fuel to the Mercedes‑AMG petronas Formula One team to comply with the sport’s 2026 regulation requiring 100 % sustainable fuel.
the project signals petronas’ longer‑term shift toward bio‑based energy solutions and its commitment to a greener energy future for Malaysia.