Biofuels are seen as a promising solution for the transport sector. (Photo: iStock)
ASEAN nations see strong potential in developing bioenergy, with opportunities to export to markets such as Europe and boost trade revenues.
However, industry leaders warn that clean energy progress in the region has slowed. Fossil fuel subsidies, unstable energy policies, and aging grid infrastructure remain major obstacles, adding uncertainty to investment.
Three advantages position ASEAN for biofuel growth
Speaking at the Asia Pacific Petroleum Conference (APPEC), Ahmad Adly Alias, Vice President of Refining, Marketing and Trading at Malaysia’s Petronas, said Southeast Asia is well-positioned for biofuel exports thanks to easy access to feedstock, rising production capacity, and growing demand. If production exceeds local demand, ASEAN could emerge as a net exporter to Europe.
He noted that transport demand in the Asia Pacific will drive biofuel consumption to an estimated 250 million liters by 2030—the fastest growth globally. Sustainable aviation fuel (SAF) production alone could reach 4 million tons annually, opening new revenue streams for the region.
Energy majors across ASEAN are already expanding into biofuels. Petronas, Italy’s Eni, and Japan’s Euglena are jointly building a biorefinery in Johor, Malaysia, slated to start operations in late 2028 with an annual capacity of 650,000 tons. Thailand’s PTT and Bangchak are also actively developing biofuel projects.
Malaysia’s Petronas and other major ASEAN energy players are already expanding into biofuels. (Photo: Petronas)
Energy transition stalls, industry calls for clear policy
Despite progress, ASEAN’s energy transition faces significant roadblocks. Executives at APPEC highlighted that surging power demand from data centers, fossil fuel subsidies, and stalled renewable auctions are stifling green investment.
Lawrence Wu, CFO of EDP Renewables Asia, said subsidies for coal and the politicization of electricity and energy are among the biggest barriers.
Nitin Apte, CEO of Singapore-based Vena Energy, added that while renewable demand has quadrupled, policy—not technology—is the main bottleneck. He stressed that clear permitting processes and timelines would allow companies to assess risks. But uncertainties around auction rules or the bankability of power purchase agreements (PPAs) continue to raise investor concerns.
On data centers, Apte noted that operators prioritize reliable energy supply over carbon intensity.
Besides, both executives agreed that delays in securing permits are inflating financing costs. They urged ASEAN nations to provide long-term, predictable policies and roadmaps to unlock investment.
Source: Reuters(1), (2), S&P Global
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