Palm waste emerges as key SAF feedstock in SE Asia amid UCO constraints

Up to 500 million mt of palm-based residues and biomass in Southeast Asia in Southeast Asia could be tapped to produce sustainable aviation fuel, helping the region diversify, beyond limited used cooking oil supplies, experts said at the MyAero SAF Symposium this week from July 1-3.

In a wide-ranging panel titled “Beyond UCO – Sustainable Palm-Based Feedstock as a Game Changer for SAF Development in APAC,” experts from technology licensors, leading palm industry companies, and sustainability organizations stressed the urgent need to diversify SAF sources, emphasizing waste and residue streams from palm oil production as a largely unused solution.

“We’re seeing a high level of interest in certified sustainable palm-derived feedstocks,” said moderator Thareq Ariffin Mohd Tajmi of the Roundtable on Sustainable Palm Oil (RSPO). “We’re not talking about virgin palm oil—this is about second-generation waste and residues like empty fruit bunches, palm oil mill effluent, and sludge oils that can be valorized for SAF.”

Throughout the discussion, panelists agreed that while UCO has helped jumpstart SAF production, its limitations in volume and price volatility mean Southeast Asia must now unlock its indigenous advantages in sustainable palm-based feedstocks.

UCO is currently the primary feedstock for HEFA-SAF but faces significant supply constraints. The IEA estimates global UCO supply at 6 million mt/year, mainly concentrated in China, the US, and the EU.

Southeast Asia, despite being a significant biofuels region, imports UCO to meet biodiesel mandates. This raises concerns about UCO’s scalability for SAF in the region.

Mature tech, emerging potential

Technology providers Topsoe and Axens emphasized the readiness of HEFA (Hydroprocessed Esters and Fatty Acids) pathways—already dominant in today’s SAF market—but highlighted the limitations in UCO availability.

“From now until 2030, HEFA will remain the leading SAF pathway due to maturity and lower cost,” said Colin Choong, Key Account Manager at Topsoe. “But post-2030, feedstock constraints will push the market toward alcohol-to-jet (ATJ), Fischer-Tropsch (FT), and e-fuels. Flexibility in feedstock and hydrogen sourcing will become crucial.”

Topsoe’s integrated HydroFlex™ and HydrogenBridge™ technologies were presented as key enablers for reducing carbon intensity, especially when plant off-gases are reused to generate hydrogen.

Axens’ Sebastien Huchette echoed this view: “The SAF story is no longer just about HEFA. We’re advancing ATJ and BTL [biomass-to-liquids] technologies and working on future methanol-to-jet (MTJ) pathways. Local feedstock, from palm biomass to alcohol sources, will define each country’s SAF strategy.”

Palm players pave way

Malaysia and Indonesia together account for approximately 85% of global palm oil production. For every metric ton of crude palm oil (CPO) produced, several tonnes of by-products are generated: Empty Fruit Bunches, POME, PKS, and PAO, among others.

These are considered second-generation, non-food, non-feed biomass and meet sustainability thresholds under many SAF frameworks.

Representing one of Malaysia’s largest palm producers, FGV’s Dr. Noor Azam Md Saad confirmed growing interest from the palm industry to engage in SAF ventures. “Our ecosystem—from plantations to mills—is already optimized for biomass valorization. While CPO remains our core business, we’re actively exploring partnerships to unlock SAF potential using residues like POME and sludge oils.”

Malaysia’s Loken, a homegrown energy firm, also outlined plans to increase SAF production using domestic palm waste. “Feedstock availability isn’t the issue,” said Navin Kumar, COO. “The challenge is logistics—collecting, aggregating, and processing scattered biomass at a viable cost.”

Economics, logistics, and policy

While technology advances quickly, panelists warned that costs and policy barriers still exist. Alternative SAF pathways, although promising, require significant capital. The geographic spread of palm residues adds logistical challenges, especially for producers focused on exports.

“The price premium airlines are willing to pay increasingly depends on carbon intensity,” noted Topsoe’s Choong. “That makes hydrogen sourcing and process efficiency a make-or-break factor in plant economics.”

Both Axens and Topsoe emphasized the importance of policy support and carbon credit schemes that acknowledge low-carbon SAF production pathways. Indonesia’s geothermal potential, Malaysia’s biomass infrastructure, and Thailand’s alcohol supply could each support different SAF technologies—if they receive the right investment signals.

Looking ahead

As UCO volumes plateau and global mandates become more stringent, the Asia-Pacific SAF sector is being encouraged to pursue deeper feedstock innovation. Sustainable palm residues, once viewed as by-products or waste, are emerging as strategic assets in a more localized, resilient SAF ecosystem.

“It’s not just about technology,” concluded RSPO’s Thareq. “It’s about connecting feedstock producers, technology providers, and off-takers under a long-term, sustainable vision for aviation decarbonization in the region.”

The Roundtable on Sustainable Palm Oil has certified over 4.9 million hectares worldwide and encourages the use of waste and residues from certified mills as a low-ILUC (Indirect Land Use Change) risk option for biofuels.

RSPO-certified feedstocks are increasingly being sought for SAF and renewable diesel production, especially in markets like Europe and Singapore, where traceability is essential.

EU’s RED II and RED III include stricter criteria for UCO traceability and indirectly promote diversification toward waste and residue-based SAF.

Moreover, the International Civil Aviation Organization’s Carbon Offsetting and Reduction Scheme for International Aviation permits a wide variety of feedstocks—including palm mill residues—if they meet sustainability and lifecycle GHG criteria.

Additionally, Malaysia’s National Energy Transition Roadmap (NETR) and Indonesia’s B40+ biodiesel programs are boosting interest in higher-value uses of palm residues, including for SAF.

Platts, part of S&P Global Commodity Insights, assessed Asia SAF-jet fuel spread at $1,096.67/mt on July 4, down $4.08/mt day over day.

Tags: palm oil, biofuel