KUALA LUMPUR: Straits Energy Resources Bhd will enter the marine biofuel trading and bunkering business in the first quarter of 2024 (Q1 2024).
Managing director Datuk Sri Ron Ho Kam Choy said this expansion is expected to be a key contributor to the company's future earnings growth.
The certification from the International Sustainability and Carbon Certification (ISCC EU) scheme granted to its wholly-owned unit, Tumpuan Megah Development Sdn Bhd, has paved the way for the company's entry into the marine biofuel trading and bunkering industry.
Tumpuan Megah is the first Malaysian industry player to achieve ISCC EU certification as a supplier and trader of biofuels, spearheading the industry's efforts to lower shipping's carbon footprint.
With ISCC EU certification, maritime industry players can demonstrate compliance with the sustainability and GHG emission-saving criteria of the European Union (EU).
This includes the EU Renewable Energy Directive (RED II), which has set strict guidelines for which biofuels can be considered sustainable.
According to Ho, the certification is recognised in key energy markets, including the EU, the United Kingdom, Japan, and Singapore.
"Compared to road transport and aviation, shipping is the least carbon-intensive way to transport goods. However, the shipping industry has begun transitioning to alternative fuels and energy sources to reduce its impact on the environment, in line with the 2023 International Maritime Organization's (IMO) Greenhouse Gas Strategy.
"The IMO has set an industry target to reduce greenhouse gas (GHG) emissions by at least 40 per cent by 2030, up from 2008 levels. For these reasons, the market for sustainable marine biofuels is growing at an explosive rate," he said.
Ho said that according to a maritime industry advisor, global production of sustainable biofuels is expected to grow from 11 million tonnes of oil equivalent (mtoe) per year to 23 mtoe by 2026.
However, if shipping were to decarbonise fully by 2050 primarily using biofuels, the maritime industry advisor estimates that 250 mtoe of biofuels would be required annually, representing a more than tenfold expansion of this market.
