MPOB to kick-start biojet fuel research, seeks RM5m from govt

The project, which is expected to start in 1H20, will include a pilot plant for the blended fuel, says MPOB DG


THE Malaysian Palm Oil Board (MPOB) could partner firms from Japan, China and the US to develop palm-based jet fuel using byproducts from the country’s second-biggest export commodity.

MPOB DG Dr Ahmad Parveez Ghulam Kadir (picture) said the Primary Industries Ministry is seeking RM6 million in the upcoming budget to undertake the biojet fuel project.

“We have requested between RM5 million and RM6 million for some initial work. When we have to set up the complete facility, it will require more.

“So far, the potential collaborators are firms from China, the US and Japan, and they are willing to provide the technologies to develop the blended fuel. The bottleneck is now to get some funding,” he told The Malaysian Reserve (TMR).

Ahmad Parveez said the project, which is expected to start in the first half of 2020 (1H20), will include a pilot plant for the blended fuel.

He said further research on the economies of scale is also critical for the green jet fuel.

“The funding will be used for the initial setup to produce biojet fuel on a small scale and we will work from there on how to expand into commercial production.

“We have done some work with another firm in the US to generate input. It showed that we can use our biomass and palm fatty acid distillate (PFAD) for biojet fuel materials,” he said.

He added that the project will also test the sustainability of using other renewable sources such as biomass in producing aviation biofuel.

“It is necessary to keep our options open, and we are not targeting only PFAD as we try to get many potential raw materials for testing.

“We want to see what is the most economical and logistically sustainable raw materials that we can use to produce biojet fuel. From the pilot plant, we will get a better understanding,” he said.

The move, he said, would help reduce Malaysia’s palm oil inventories.

Ahmad Parveez said PFAD is chosen for the test over crude palm oil (CPO) as the latter faces continuous objection from the European countries.

“It is also quite important for Malaysia to venture into this to meet the sustainability target for the aviation industry.

“In doing so, Malaysia cannot use CPO yet as there will be other issues that we have to face later such as the indirect landuse change. All things considered, waste products would be more suitable.

“PFAD is a byproduct and it does not normally use for edible purposes, and we would prefer it for the time being,” he said.

Despite the environmental benefit of green aviation fuel, enforcing the blended fuel as a mandatory industry requirement would be a herculean task for petroleum and airline companies, said Maybank Investment Bank Bhd analyst Mohshin Aziz.

“It has been done before by Virgin Atlantic Airways Ltd but the logistic requirement is just too much and many firms who tried after that have given up.

“You need to have a special tank to mix the conventional fuel and biofuel while keeping in check of the oxidation rate of the blended fuel in different climates,” he said.

Mohshin added that the sustainable blended fuel, however, has been proven to reduce carbon emission and lower the aviation’s share in the negative environmental impacts.

“Virgin Atlantic proves that the biojet fuel is workable. What they did was they mix the conventional aviation fuel with sustainable materials by about 10% to 20%.

“In terms of technical perspective, it works, considering biofuel is sustainable than conventional fuel. It reduces the carbon footprint, but it comes with additional cost and complexity,” he said.

MIDF Amanah Investment Bank Bhd analyst Adam Mohamed Rahim said the cost of biojet fuel would be difficult to determine at the moment as the commodity sources are not widely available.

“The cost of biojet fuel is difficult to determine as it is not a readily available commodity, and the contracts for the purchase of biojet fuel do not usually disclose the price.

“Existing analysis should be treated with caution, as assumptions that have been made are not necessarily accurate and could result in wide ranges for cost estimates, such as the common one where the biojet fuel currently costs anywhere from two to seven times more,” he told TMR.

Adam said the lack of mature technologies in producing the biofuel should also be taken into consideration in valuing the effect of its usage in the aviation industry.

“The cost of the oleochemical feedstock is high, at about 80% of the cost of making biojet fuel and could potentially be higher than the cost of fossil-derived jet fuel.

“The cost of vegetable oil has historically tracked the price of crude oil, making it likely that feedstock costs will always be challenging. Thus, Malaysia needs to formulate not just accommodative policies for biojet fuel, but also invest extensively in its research and development given Malaysia’s rich agricultural resources,” Adam said.

According to a National Aeronautics and Space Administration study, jet engines powered by blended aviation fuel consisting of 50% sustainable resources could reduce carbon emissions by 70%.

The biojet fuel was approved to be used commercially for daily flights in July 2011, which had then prompted research and experiments by airlines globally.