Petronas and Partners Break Ground on Malaysia’s First Large-Scale Biorefinery

PETRONAS, Enilive, and Euglena have begun construction of a 650,000-tonne-per-year biorefinery in Pengerang, Malaysia, marking a major step toward scaling up sustainable fuel production in Asia by 2028.

Pengerang Biorefinery Sdn. Bhd., a joint venture between Malaysia’s PETRONAS, Italy’s Enilive S.p.A., and Japan’s Euglena Co., Ltd, has officially broken ground on a new biorefinery complex within the Pengerang Integrated Complex (PIC) in Johor. Once operational in the second half of 2028, the facility will process up to 650,000 tonnes of renewable feedstocks annually to produce Sustainable Aviation Fuel (SAF), Hydrogenated Vegetable Oil (HVO), and bio-naphtha. Feedstocks will include waste oils, animal fats, and residues from vegetable oil processing.

The project positions Malaysia as a key regional hub for advanced biofuel production at a time when Southeast Asia’s aviation and transport sectors are under growing pressure to decarbonize. The refinery will leverage PIC’s strategic location near major international shipping routes to distribute biofuels efficiently across Asia.

PETRONAS Executive Vice President and Downstream CEO Datuk Sazali Hamzah described the project as central to the company’s strategy of developing a “holistic bio-based value chain,” reinforcing PETRONAS’ ambition to become an integrated energy leader by the next decade.

For Enilive, the facility extends its global biofuel footprint, which already includes biorefineries in Italy and the U.S., and projects under development in Italy and South Korea. CEO Stefano Ballista said the new site would contribute toward Enilive’s target of over 5 million tonnes of bioproducts and 2 million tonnes of SAF annually by 2030.

Euglena’s President Mitsuru Izumo highlighted the venture as a milestone in the company’s broader efforts to commercialize algal biofuels and expand decarbonization solutions in the ASEAN region. He noted that the project’s evolution reflects the “rapidly changing energy landscape” and the shared goal of advancing a sustainable energy supply chain.

Located within the Pengerang Integrated Complex—Malaysia’s largest downstream oil and gas facility—the new biorefinery will benefit from established infrastructure, logistics, and feedstock supply networks. The investment underscores Malaysia’s broader push to attract green industry development while positioning Johor as a regional leader in clean fuels manufacturing.

By Charles Kennedy for Oilprice.com

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