The global upstream sector has seen several companies pivoting to bio-feedstock production as the new year comes into focus. The Asian continent has been identified as a major driver in the biofuel production sector as several nations aim to enter the sector for the first time or expand existing operations to meet an increase in demand from the international market. Now, a leading Malaysian energy company has outlined its plans to pivot towards the sector in 2026, marking a shift in the conventional energy market.
Indonesia plans a gradual shift to biodiesel production in 2026
Several industry experts have noted the role that Asia will play in diversifying the energy market in 2026, with Indonesia planning to implement a gradual shift to biodiesel production this year.
Indonesia’s government is planning a concept to produce biodiesel up to B100 as part of its efforts to diversify its biofuel production sector. At the moment, biofuel diesel is required to consist of 35 percent fatty acid methyl esters from palm oil and 65 percent diesel fuel under the government’s directive. However, the Indonesian officials have plans to gradually increase that number over time.
“We are preparing concepts up to B100, but this will be done gradually. We will report the developments in due time.” – Indonesian Minister of Energy and Mineral Resources Bahlil Lahadalia
Indonesia’s government is preparing for a surge in biofuel usage in 2026 and beyond
The government has noted its intention to construct various supporting infrastructures, including ports, shipping, and logistics, to ensure a smooth, gradual roll-out of the new mandated percentages of bio-feedstock. Industry experts and analysts all point to the Asia continent playing an integral role in the energy transition to the biofuel sector.
Malaysia is planning to boost bio-feedstock production in the new year
Malaysia is following the trend that has emerged in Indonesia to develop a more welcoming environment for bio-feedstock production this year, as the government has noted the opportunity to become a key player in the global shift towards sustainable aviation fuel (SAF) production.
Cathay Pacific, a global leader in sustainability projects, has committed to pivoting its focus to developing the bio-feedstock sector in the nation. Several industry analysts have noted the important role that Asia will play in diversifying the energy market in the new year, such as International Air Transport Association (IATA) director general Willie Walsh.
“All of these countries have an opportunity to provide feedstock that can be used for the development of sustainable fuels. It’s not just for air transport, it’s also for road transport. When we look at Asia and Southeast Asia, we see lots of feedstock opportunities there. So, there’s an opportunity to develop a whole new industry, generate employment, reduce dependence on importing oil, and create a positive outcome for the environment as well. – International Air Transport Association (IATA) director general Willie Walsh
Reshaping the global energy market to expand alternative energy development options will be key in the coming years, as the slow phasing out of oil and gas production enters a new era.
Despite the clear promotion of biofuels in Asia, the conventional upstream sector is still dominating the sector
Asia’s potential in the biofuel industry aside, the conventional upstream energy sector will continue to play a vital role in meeting the expected increase in energy demand that has been reported across several regions of the world. With PETRONAS reaching a major development step in South America recently, the traditional oil and gas sector is not going anywhere anytime soon. Asia will no doubt become a leader in the biofuel sector in 2026, but can the region continue on its path to diversify its energy sector beyond 2026?
