Straits Energy Resources Berhad, a Bursa Malaysia-listed company, announced today that its subsidiary, Tumpuan Megah Development Sdn Bhd (“Tumpuan Megah”), has been awarded certification from the International Sustainability and Carbon Certification (“ISCC EU”) scheme, paving the way for the Company’s entry into the marine biofuel trading and bunkering business in the first quarter of 2024 (“Q12024”).

This milestone development comes as the maritime industry accelerates its transition to low-carbon alternative fuels, such as sustainable biofuels, as part of the global decarbonization agenda. According to DNV, a maritime industry advisor, global production of sustainable biofuels is expected1 to grow from 11 Mtoe (million tonnes of oil equivalent) per year to 23 Mtoe by 2026. However, if shipping was to decarbonize fully by 2050 primarily using biofuels, DNV estimates that 250 Mtoe of biofuels would be required annually, representing a more-than-tenfold expansion of this market.

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. ISCC certification is recognised in key energy markets, including the European Union, the United Kingdom, Japan and Singapore.

Dato’ Sri Ron Ho Kam Choy, Managing Director of Straits Energy Resources Berhad, said:

“Compared to road transport and aviation, shipping is the least carbon-intense 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 (IMO) Greenhouse Gas Strategy.

Dato’ Sri Ron Ho Kam Choy, Managing Director of Straits Energy Resources Berhad

The IMO has set an industry target to reduce greenhouse gas (GHG) emissions by at least 40% by 2030, from 2008 levels. Here, the usage of sustainable biofuels, with significantly lower GHG emissions than fossil fuels, is expected to play an important role.

For these reasons, the market for sustainable marine biofuels is growing at an explosive rate. We are thrilled to announce that Straits, via Tumpuan Megah, will start bunkering and trading marine biofuels in Q12024, and expect it to be a key contributor to our future earnings growth.

In line with the global emission reduction agenda, shipping industry players must be able to prove that the bio-content in their fuels is sustainable. With Tumpuan Megah’s newly-acquired ISCC EU certification, customers can be assured of the sustainability of their biofuel feedstock, the traceability of these products throughout the supply chain, as well as credible, verified emission reductions.

Achieving ISCC EU certification demonstrates our commitment and capability to drive the adoption of sustainable biofuels, and will help our customers prove their compliance with environmental regulations.”
Source: Straits Energy Resources Berhad