Southeast Asia sits on one of the world’s largest concentrations of bio-based feedstocks suitable for advanced biofuels and Sustainable Aviation Fuel (SAF). Yet much of the region still risks replicating a familiar pattern: exporting low-value feedstocks while importing back high-value refined products at substantial premiums.
A recent African SAF development initiative provides an important strategic lesson for ASEAN policymakers, airlines, agribusinesses and energy investors. See reference case at: https://bleriotgroup.com/
The Structural Challenge
For years, a regional agribusiness company aggregated oilseeds from semi-arid farming regions and exported crude vegetable oils to a major European energy company. These feedstocks were refined in Europe into SAF and then sold back into the originating country’s aviation market at prices several times higher than conventional jet fuel.
When the national airline explored the possibility of local SAF production, the international refiner reportedly showed little interest in building domestic refining capacity. The reason was not technological — it was structural.
The existing business model was designed around exporting low-cost feedstocks, leveraging centralised refining infrastructure in developed markets and capturing the majority of value creation offshore.
This is a challenge highly relevant to Southeast Asia. Across ASEAN, countries possess abundant biomass resources:
- palm residues
- used cooking oil
- coconut waste
- rice husks
- cassava
- sugarcane residues
- forestry by-products
- algae potential,
- municipal organic waste
- rapidly growing industrial agricultural streams.
Yet, much of the region still largely exports either raw materials or low-value intermediate rather than developing integrated domestic SAF ecosystems.
The Strategic Lesson for Southeast Asia
The African initiative has adopted a fundamentally different approach. Rather than beginning with a large centralised refinery model, the project focuses on distributed modular production, local feedstock aggregation, farmer economics and phased market development.
Instead of investing immediately in billion-dollar refining infrastructure, the company is developing smaller modular units capable of incremental scaling. Initial production targets biodiesel and renewable diesel markets where economics are already commercially viable before progressively scaling into SAF production.
This phased approach mirrors the long-term evolution of Brazil’s biofuels industry, which was built progressively over decades rather than through single mega-projects.
For Southeast Asia, this model raises several important considerations.
1. Moving Up the Value Chain
ASEAN countries risk becoming long-term feedstock suppliers to external SAF markets unless domestic refining and upgrading capacity is developed.
Without local conversion capability, value capture remains offshore, aviation decarbonisation costs remain high, and domestic energy security benefits are limited.
The strategic question is therefore not simply: “Do we have feedstocks?" but rather: “Who captures the refining margin, intellectual property, fuel certification capability and long-term strategic value?” This is particularly important given the growing international SAF mandates in Europe and other jurisdictions, which are rapidly increasing the demand for sustainable feedstocks globally.
2. Modular and Distributed Refining May Be More Suitable Than Mega-Projects
Much of Southeast Asia’s bio-based feedstock availability is geographically fragmented. Large centralised SAF facilities may therefore face feedstock aggregation challenges, transport and inefficiencies, sustainability traceability issues and elevated logistics costs.
Within this context, distributed modular systems could offer advantages such as lower capital intensity, faster deployment, easier replication, significant regional economic development advantages and greater alignment with rural agricultural ecosystems and related industrial development objectives.
3. SAF Should Not Be Viewed in Isolation
Perhaps one of the most important lessons is the importance of sequencing. The emerging model starts with biodiesel, renewable diesel, industrial biofuels, and other readily accessible, lower-barrier renewable fuel markets before scaling into SAF. This reduces early commercial risk whilst building feedstock supply chains, farmer participation, logistics systems, refining expertise, and, above all, investor confidence.
Southeast Asia should therefore avoid viewing SAF purely as an aviation problem. It needs to be part of a broader industrial bioeconomy strategy.
4. Farmer Economics Are Central
Perhaps the most important insight is that feedstock systems succeed only if local agricultural communities benefit directly. The African initiative focused heavily on assistance with planting drought-resistant crops, utilising marginal land, providing supplementary farmer income and developing agriculturally non-food energy crops compatible with existing agricultural ecosystems.
This is highly relevant for Southeast Asia, where concerns around palm oil sustainability, deforestation, land-use change, biodiversity, and food security are becoming increasingly politically sensitive in an age when “resilience” and climate adaptation are seen as non-negotiable national and regional development objectives.
Future SAF systems in ASEAN will require increasingly integrated agroforestry, regenerative agriculture, waste-based feedstocks, circular-economy integration, and strong resilience and sustainability governance frameworks.
5. Development Finance Will Be Critical
A major conclusion from the case study is that commercial capital alone is unlikely to finance early-stage energy agriculture ecosystems. This has direct implications for ASEAN. Building these ecosystems requires a more integrated approach to managing feedstock ecosystems, aggregation networks, rural infrastructure and standards & certification systems, among others.
Early-stage modular refining needs blended finance, including consortia ready to invest in long-term ecosystem development. Development banks, sovereign wealth funds, climate finance, export credit agencies, and, ultimately, public-private partnerships must all play a more coordinated role….Together!
Conclusion
The emerging African SAF experience highlights a broader strategic question for Southeast Asia:-
Will the region position itself merely as a supplier of raw sustainable feedstocks to external markets — or will it build integrated domestic value chains capable of capturing the industrial, economic and energy security benefits of the low-carbon fuels transition?
The answer may ultimately determine whether Southeast Asia becomes a passive participant in the global SAF market or one of its future industrial leaders.
