Malaysia and China's state-owned Shanxi Construction Investment Group have signed a memorandum of understanding (MoU) to collaborate on the production of second-generation biodiesel and sustainable aviation fuel (SAF) plant.
Shanxi Construction plans to invest in a hydrogenated vegetable oil (HVO) plant in Malaysia's southern state of Johor, Reuters has reported.
"The HVO plant has the potential to produce SAF which is also known commonly as biojet fuels," the ministry said, adding there was increasing demand for HVO including from Europe.
Each HVO plant is expected to bring foreign investment worth $712.25 million (€631 million), it said.
The MoU is between the Malaysian Palm Oil Board, Pengerang Maritime Industries, Shanxi Construction, and the Institute of Coal Chemistry, Chinese Academy of Sciences.
Wang Chongjun, general manager of Shanxi's overseas department, said the firm is exploring development of a green diesel refinery and related storage facilities in Johor's Pengerang Maritime Industrial Park using China's technology and Malaysia's palm oil products.
"The current order of the production planning is bio-jet fuel or sustainable aviation fuel, green diesel, and the corresponding green chemical products that accompany the production," Wang said.
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