Industrial Transformation in ASEAN A Cluster-Driven Model for Regional and Global Collaboration 2026

CASE STUDY 2 PETRONAS’ Pengerang Integrated Complex (PIC): The PIPC’s leading initiative driving Malaysia’s low-carbon fuel future Context: PETRONAS is setting up its first bio-refinery, marking a key milestone in advancing low-carbon fuels solutions within its refining, marketing and trading division. The project will produce sustainable aviation fuel (SAF) and hydrogenated vegetable oil (HVO), supporting Malaysia’s energy transition and emissions reduction goals. It is listed as a catalytic project under the National Energy Transition Roadmap (NETR). Objective: Recognizing the global energy transition required diversification beyond traditional oil and gas, and raising demand for sustainable fuel, PETRONAS aims to establish a regional hub for low-carbon fuels that meets domestic demand and captures export market potential. Intervention: PETRONAS sought strategic partners with proven biofuel production expertise, technology leadership and market access. Enilive and Euglena emerged as the ideal collaborators to form a joint venture company, Pengerang Biorefinery. Enilive has demonstrated success in SAF and HVO production using Ecofining technology, extensive feedstock supply networks and strong European market presence. Meanwhile, Euglena complements this by bringing algae-based biofuel R&D capabilities and opening access to the Japanese offtake market.106 The joint venture is intended to own and operate a biorefinery with a capacity of 650 kilotonnes per annum (ktpa), to be located within the Pengerang Integrated Complex.107 The biorefinery is currently under construction and is designed to adapt to diverse feedstock options and evolving market dynamics. Used cooking oil (UCO) will be used as one of the main feedstocks, which requires robust supply chain strategies given its rising global demand and tightening availability. The project is progressing as planned and remains on track for its targeted start-up in the second half of 2028. Additionally, the joint venture will work with Pengerang Terminal (PT2SB) which is owned by Royal Vopak, Dialog, PETRONAS and the state of Johor, to expand dedicated biofuel storage infrastructure by 272,000 cubic metres.108 PETRONAS selected Johor’s Pengerang Integrated Petroleum Complex for its biofuel’s development, using state incentives, integrated infrastructure and proximity to petrochemical value chains, enabling operational efficiency and supporting the group’s wider low-carbon transition ambitions. Also, they are collaborating with key ministries and ASEAN partners to harmonize SAF policies, secure feedstock supply, align blending mandates and position Malaysia as a regional low-carbon fuel leader. As South-East Asia accelerates its shift towards cleaner energy, biofuels remain essential for strengthening energy security and reducing emissions. With the right policies, collaboration and continued innovation, the region can scale sustainable fuels that support global diversification into cleaner energy. Our biorefinery in Pengerang, which is currently being developed in partnership with ENI and Euglena, highlights how international partnerships and integrated clusters can expand regional supply of sustainable, low-carbon fuel. Datuk Sazali Hamzah, Executive Vice-President and Chief Executive Officer, Downstream, PETRONAS Industrial Transformation in ASEAN: A Cluster-Driven Model for Regional and Global Collaboration 18Note: This image is for illustrative purposes only and does not depict the Pengerang Integrated Complex.