PETRONAS Biorefining: How Sustainable Fuels Are Shaping F1 and Industrial Markets

Formula 1's 2026 season is bringing advanced sustainable fuels into sharper focus, connecting motorsport engineering with the wider transition toward lower-carbon transport. PETRONAS is using its fuel-development expertise to support the Mercedes-AMG PETRONAS Formula One Team while expanding its work across sustainable aviation fuel (SAF), hydrotreated vegetable oil (HVO) and bio-naphtha.

For chemical traders, procurement managers and industrial buyers, this development signals a growing intersection between renewable feedstocks, fuel technology and established refining infrastructure. PETRONAS's planned biorefinery in Pengerang, Malaysia, also highlights the importance of feedstock availability, processing flexibility and logistics in building commercially viable bio-based supply chains.

The commercial significance extends beyond the racetrack. As fuel producers develop renewable alternatives for aviation, road transport and industrial applications, buyers will need to understand how production capacity, raw material quality and sustainability requirements influence future sourcing opportunities.

How Formula 1 Is Advancing Sustainable Fuel Technology

Formula 1 offers a demanding environment for developing and evaluating fuel technologies. Engines must deliver high performance under intense operating conditions, so fuel formulation requires careful attention to combustion behaviour, energy density and compatibility with advanced hybrid power units.

For the 2026 season, Formula 1 introduced advanced sustainable fuels as part of its wider commitment to reaching net-zero carbon emissions by 2030. PETRONAS has developed Advanced Sustainable Fuel for its Formula One partnership, linking motorsport research with its broader commercial fuel strategy.

The relevance for the chemical industry lies in the connection between specialised formulation and scalable production. Fuel developers must balance technical performance with raw material availability, processing costs and the ability to maintain consistent product quality.

Motorsport can help generate valuable knowledge about fuel behaviour and formulation. However, translating these developments into commercial markets requires additional work on production economics, supply infrastructure and end-user requirements.

PETRONAS Biorefining and Its Three Target Products

PETRONAS is developing a biorefinery at the Pengerang Integrated Complex in Johor, Malaysia, in partnership with Enilive and Euglena. The project reached a final investment decision in July 2024 and is designed to process approximately 650,000 tonnes of renewable feedstock annually, with operations targeted for the second half of 2028.

The facility will produce three principal products:

- Sustainable aviation fuel: SAF offers aviation a renewable fuel pathway that can work within the sector's existing transition toward lower-emission operations. Airlines and fuel suppliers will need dependable production, blending and distribution arrangements to expand its use.

- Hydrotreated vegetable oil: HVO, also known as renewable diesel, provides an alternative to conventional diesel in suitable applications. Its potential markets include road transport and other transportation segments seeking lower-carbon fuel options.

- Bio-naphtha: This renewable hydrocarbon product can support selected chemical and industrial applications. Its development creates a potential link between renewable fuel production and markets that use naphtha-derived materials.

The facility's integrated design will give PETRONAS and its partners flexibility to adjust production according to feedstock availability and market demand. That flexibility matters because the three products serve different customers and operate within different commercial and regulatory environments.

Renewable Feedstocks Will Shape Production Economics

A biorefinery's commercial performance depends on more than its processing equipment. Producers also need reliable access to suitable raw materials that meet technical specifications and support the intended sustainability criteria.

PETRONAS's planned facility will use waste and residue feedstocks, including used vegetable oils, animal fats and waste from vegetable oil processing. The partners have also identified microalgae oils as a potential feedstock for exploration over the medium term.

This approach creates several procurement priorities for feedstock suppliers and industrial buyers.

- Reliable collection networks: Used oils and processing residues often originate from dispersed sources. Producers need organised collection, storage and transport systems to maintain a consistent supply.

- Quality control: Renewable raw materials can differ in composition, moisture content and impurity levels. Suppliers must meet agreed specifications to help refiners manage pretreatment requirements and maintain stable operations.

- Traceability: Buyers and producers need clear documentation about feedstock origins and handling. Traceability helps businesses demonstrate compliance with relevant sustainability requirements and reduces uncertainty across the supply chain.

- Long-term availability: Competition for suitable waste-based materials can influence procurement costs and contract negotiations. Diversifying supply sources can help producers manage shortages and market volatility.

What SAF, HVO and Bio-Naphtha Mean for Buyers

The three products create different purchasing opportunities, so buyers should evaluate each market according to its own technical and commercial requirements.

SAF procurement depends on aviation fuel specifications, certification requirements, supply arrangements and the ability to deliver consistent volumes. Airlines, aviation fuel distributors and blending operators must also consider the infrastructure needed to move and handle the fuel.

HVO procurement requires buyers to evaluate fuel specifications, compatibility with the intended equipment and applicable market requirements. Logistics operators and fuel distributors may assess renewable diesel as part of their broader fuel-sourcing strategies.

Bio-naphtha procurement calls for a different set of questions. Chemical manufacturers and other industrial users should assess composition, consistency, suitability for their processes and the availability of dependable commercial volumes.

For all three products, procurement teams should establish clear expectations around delivery schedules, quality documentation and contract terms. They should also distinguish between announced production capacity and the volumes that a supplier can actually offer under a confirmed commercial agreement.

PETRONAS's planned annual processing capacity provides a useful indication of project scale, but buyers should base purchasing decisions on confirmed product availability and agreed specifications rather than capacity figures alone.

How Supply Chains and Partnerships Support Market Growth

Renewable fuel production requires coordination across feedstock suppliers, technology providers, processors, logistics operators and end users. PETRONAS's partnership with Enilive and Euglena brings together expertise in biorefining, process technology and feedstock development.

The Pengerang location also offers an important logistical advantage. Its integration with existing industrial facilities and access to international shipping routes can support the movement of raw materials and finished products into regional and international markets.

Nevertheless, renewable feedstock markets have their own constraints. Weather-related disruptions, competing uses for waste oils, collection costs and changing international trade requirements can all affect the economics of sourcing.

Buyers can prepare by establishing relationships with multiple qualified suppliers, agreeing on measurable quality standards and reviewing delivery terms carefully. Where possible, they should also assess whether suppliers can provide consistent documentation covering origin, processing and applicable sustainability certifications.

For chemical traders, the developing market may create opportunities to connect renewable raw material suppliers with refiners and industrial users. Success will depend on understanding the technical requirements of each transaction rather than treating all bio-based materials as interchangeable commodities.

Sustainability Standards and Commercial Considerations

Renewable origin alone does not establish the environmental performance of a fuel. Buyers need to understand how producers source raw materials, process them and document the resulting product's sustainability credentials.

PETRONAS has already demonstrated progress in SAF supply. In September 2025, the company reported delivering Malaysia's first locally blended SAF to Kuala Lumpur International Airport for Malaysia Aviation Group, using its blending facilities and integrated distribution infrastructure.

That experience highlights the importance of building supply capabilities alongside production capacity. Producers must coordinate blending, quality assurance, transport and customer requirements to move renewable fuels from development projects into practical commercial use.

Procurement teams should consider several factors when evaluating offers:

• Certification and documentation: Check which sustainability schemes and product standards apply to the intended market, then confirm that the supplier can provide the required evidence.

• Delivered cost: Evaluate feedstock costs, processing expenses, transport, storage and any additional handling requirements rather than comparing headline prices alone.

• Product consistency: Agree on specifications, sampling procedures and acceptance criteria before committing to recurring deliveries.

• Contract flexibility: Consider volume commitments, delivery windows and arrangements for managing changes in feedstock availability.

• Market eligibility: Confirm that the fuel meets the relevant requirements for its intended application and destination.

These checks can help buyers compare suppliers on a consistent basis and avoid confusing sustainability claims with demonstrated product compliance.

What the F1 Fuel Programme Means for the Chemical Industry

PETRONAS's motorsport activities and its biorefining investments represent related but distinct parts of its wider fuel strategy. The Formula 1 programme focuses on advanced fuel performance, while the biorefinery will expand renewable feedstock processing for SAF, HVO and bio-naphtha.

For chemical manufacturers, bio-naphtha is particularly relevant because it connects renewable feedstocks with selected downstream chemical applications. Its commercial potential will depend on product quality, available volumes, processing suitability and the economics of replacing conventional feedstocks.

Traders can also monitor developments in feedstock collection, pretreatment technology and renewable fuel distribution. These areas influence the cost and reliability of supply, even for buyers who do not purchase finished fuels directly.

However, companies should assess opportunities product by product. A development in sustainable aviation fuel does not automatically translate into greater availability or lower prices for every renewable chemical or hydrocarbon derivative.

The broader lesson is that renewable fuel growth depends on coordinated investment throughout the value chain. Producers need competitive processing technology, suppliers need reliable feedstock networks and buyers need transparent commercial terms.

What Procurement Teams Should Watch Through 2028

As PETRONAS advances its biorefining plans, buyers can prepare by tracking developments that affect future availability and sourcing conditions.

First, monitor the project's progress toward its targeted operational start in the second half of 2028. Construction milestones, commissioning and production ramp-up will help clarify when commercial supply may become available.

Second, evaluate the feedstock market. Used vegetable oils, animal fats and other processing residues will remain important inputs for the planned facility, making collection networks and material quality central considerations.

Third, identify the specifications and documentation required for the products your business intends to purchase. Early preparation can help procurement teams compare suppliers, assess delivered costs and establish suitable contract terms as additional supply becomes available.

Finally, follow developments in Formula 1 and commercial fuel applications without assuming that motorsport innovations will immediately reach every market. The most useful indicators for buyers will be confirmed production volumes, demonstrated product performance and dependable distribution arrangements.

PETRONAS's investment illustrates how fuel innovation can connect motorsport, renewable feedstocks and industrial processing. For procurement professionals, the opportunity lies in understanding these connections early and preparing sourcing strategies that balance sustainability requirements with cost, quality and supply reliability.