SAF Feedstock in Southeast Asia:
Why Availability Is Not the Same as Bankability
11 min read · May 21, 2026 · By Alex
The availability of SAF feedstock in Southeast Asia is not the constraint it looks like: the region’s agricultural and forestry waste could support a large sustainable aviation fuel supply. The region could produce up to 8.5 million barrels per day by 2050. Analysts project regional demand at under 700,000 barrels per day by the same year (ASEAN, January 2026). That gap gets quoted constantly as proof the region is sitting on more feedstock than it will ever need. It is true at the regional level. At the project level it is close to irrelevant, because no lender finances a share of a regional total. A lender finances one plant’s contracted, de-risked supply. For most of the SAF projects I see move through Southeast Asia, that supply narrows to a handful of feedstocks. Every other developer nearby is trying to lock down the same ones.
In short
Feedstock security is one of the first things an investor checks, on equal footing with offtake. The region’s theoretical biomass surplus does not make that check any easier for a single project. HEFA, the only commercially mature SAF pathway today, depends on used cooking oil and palm residues. Collection rates for that feedstock sit well below what the raw volumes suggest. Multiple HEFA developers end up in direct competition for the same supply. Alternative pathways, Alcohol-to-Jet and gasification routes in particular, open access to feedstocks with far less competition. That list includes cassava, rice straw, empty fruit bunches, and forestry residues. What actually makes a feedstock position bankable is aggregation, diversification, and a contract with price and volume pass-through. The size of the number a regional report quotes does not.
In this article
Why the regional SAF feedstock total in Southeast Asia tells you nothing about your project
The SAF feedstock base in Southeast Asia is real. The ICAO-recognised feedstock categories here include agricultural residues such as bagasse, cobs, husks, manure, nutshells, stalks, stover, and straw. Forestry residues add bark, branches, cutter shavings, leaves, needles, pre-commercial thinnings, and slash. Across the region, rice, cassava, corn, sugarcane, and oil palm waste are the most abundant sources. Indonesia and Thailand hold the largest volumes of agricultural and forestry waste of any Target Country. Lao PDR holds the least (GHD, April 2025).
None of that changes the underwriting question for a single plant. The regional figure is a planning number aggregated across seven countries and multiple crop types. Most of it is still uncontracted. Much of it sits with smallholder farmers who have no existing relationship with a biofuels buyer. Most of the agricultural waste identified across these countries comes from smallholder-grown crops. Contracting and aggregating it at scale is difficult. Farming practices often leave the waste on the field or burn it. Shifting that behaviour needs government and private-sector support before the volume becomes collectable at all (GHD, April 2025). For that reason, a number that large, sitting that far from being contracted, is not what an investor underwrites. What gets underwritten is the supply agreement a specific developer has actually signed.
The HEFA bottleneck: everyone chasing the same SAF feedstock pool in Southeast Asia
Of all SAF pathways, only HEFA (hydro-processed esters and fatty acids) works at commercial scale today. It also has the narrowest feedstock base of any pathway. Its feedstock list: used cooking oil, palm oil mill effluent, palm fatty acid distillate, and other oil and fat residues. Every HEFA project in the region draws from essentially the same pool. In practice, that pool is smaller than it looks.
Indonesia’s domestic collection rate for used cooking oil sits at only around 23 percent, and Indonesia exported roughly 95 percent of what it collected in 2024. The government then signalled a long-term restriction on UCO and palm oil mill effluent exports to protect domestic SAF ambitions. Malaysia’s own UCO collection rate runs around 30 to 45 percent (White & Case). Developers have announced a fast-growing count of HEFA projects across Indonesia, Malaysia, Thailand, and the Philippines. All of them price against the same limited, largely uncollected, partly export-restricted base.
There is also no established market for most of these feedstocks, and therefore no transparent pricing. Most agricultural waste feedstocks in the region currently have no formal market or benchmark price attached to them. As a result, a developer negotiating a supply agreement is often negotiating blind. There is no reference point an investor can independently verify (GHD, April 2025). That opacity is part of why SAF feedstock due diligence in Southeast Asia takes as long as it does. A developer with a signed, priced agreement moves noticeably faster through an investment committee. By contrast, one who shows up with a supply estimate does not.
Where the alternative SAF feedstock pathways in Southeast Asia open things up
HEFA’s feedstock constraint is one of the reasons Alcohol-to-Jet and gasification-based pathways are drawing attention beyond their current cost disadvantage. In a multi-criteria assessment across the region of financial, environmental, technical, and experience indicators, HEFA ranked highest overall. That result holds only because HEFA has oils and fats to work with. Where a project’s feedstock base sits outside oils and fats, ATJ ranked highest of the alternatives. Gasification and Fischer-Tropsch and Gasification and Methanol Synthesis came close behind. Each one runs on lignocellulosic feedstocks that HEFA cannot touch, and all carry ASTM approval (GHD, April 2025).
That matters because the SAF feedstock these pathways can access in Southeast Asia is far less contested. Cassava, rice straw, empty fruit bunches from palm mills, and forestry residues are all present in large volumes. None of them is currently the subject of a region-wide bidding war the way used cooking oil is. Rice straw in particular scores lowest on carbon intensity among feedstock groups across multiple Southeast Asian countries. That helps on the CORSIA eligibility side as well as the sourcing side.
Indonesia and Thailand hold most of the forestry waste. Sawmill operators already aggregate residues at the mill, so they do not carry the same seasonal variability as crop waste. As a result, residues arrive year-round rather than tied to a single harvest window. A developer who can work with a gasification or ATJ pathway chooses a harder technology curve. In exchange, it gets a feedstock position that is not already crowded.
What makes a SAF feedstock position in Southeast Asia bankable
- Aggregation, not assumption. Most of the feedstock in the region sits with smallholder farmers. It is not at a mill or a central collection point. The exceptions matter: palm oil mills already aggregate empty fruit bunches, and sugar mills already aggregate sugarcane bagasse. Instead, most mills burn that bagasse for their own power rather than sell it. Put the plant near an existing aggregation point instead of building a collection network from scratch. This removes a large part of the execution risk a lender will otherwise price in.
- Diversification across more than one feedstock. A supply plan built on a single crop carries the same concentration risk as a single offtaker. The same holds for a plan built on one waste stream. Southeast Asia’s relatively constant year-round temperatures mean farmers can grow and harvest several crops more than once a year. A multi-feedstock facility gains a seasonal advantage over regions that depend on a single annual harvest window (GHD, April 2025). A project designed to run on two or three feedstock types, rather than one, is easier to underwrite. A shortfall or price spike in one does not stop the plant.
Contract terms and storage for SAF feedstock in Southeast Asia
- Price and volume pass-through written into the contract. The absence of a formal feedstock market cuts both ways. On the one hand, it is harder to benchmark. On the other hand, contract terms matter more than they would in a commodity market with public pricing. A supply agreement without a price and volume pass-through clause leaves a project exposed when policy or the market shifts. Indonesia’s export restriction is exactly that kind of shift. Lenders increasingly treat that clause as a requirement rather than a negotiating point.
- Storage and logistics planned for the actual feedstock, not a generic one. Moisture content, bulk density, and storage duration vary widely across feedstocks. They change the transport cost per litre of SAF produced. Farmers can bale straw, husks, and most crop residues. They can also store them loose under cover for up to a year if handled correctly. Most smallholder suppliers have no storage facility of their own. That pushes cost and risk onto the developer’s side of the agreement unless the contract addresses them (GHD, April 2025).
Common mistakes I see
- Citing the regional SAF feedstock surplus in Southeast Asia to an investor as if it answers the question for one specific plant.
- Building a HEFA financial model on an assumed UCO price with no signed agreement and no reference to a benchmark that does not exist.
- Relying on a single feedstock type and a single geography, with no fallback if collection volumes fall short of the plan.
- Underestimating how much of the identified regional feedstock sits with smallholder farmers who have no existing commercial relationship with a biofuels buyer, and no plan for how that relationship gets built.
- Leaving price and volume pass-through out of the supply agreement, which looks fine until a feedstock export restriction or a price spike happens.
- Treating feedstock due diligence as faster or lighter than offtake due diligence, when for most projects in this region it runs just as long.
SAF feedstock bankability checklist for Southeast Asia
- SAF feedstock supply agreement signed, not a verbal arrangement or informal estimate, with volume, price mechanism, and term defined
- Price and volume pass-through protection written into the contract
- Supply sourced from more than one feedstock type or geography where the pathway allows it
- Aggregation point identified, ideally at or near an existing mill or collection hub rather than built from scratch
- Storage and logistics plan specific to the feedstock’s actual moisture content and bulk density
- For HEFA specifically, confirmation that no competing project in the same catchment area already claims the contracted volume
- Feedstock supplier’s creditworthiness and delivery track record checked independently, the same way the offtaker’s would be
Where this leaves you
Your financial model may cite a regional feedstock surplus instead of a signed supply agreement. Close that gap before the model reaches an investor’s desk. I am currently working across SAF projects in the Philippines, Thailand, Vietnam, and Malaysia, and the same feedstock question comes up in nearly every one of them. The question is never whether enough biomass exists in the region. It is whether this specific project has secured its share of it.
If that is useful, book a call or look at how I work on feedstock supply and offtake agreements.
Sources
- GHD / CTIF, Promoting the Production of Sustainable Aviation Fuels from Agricultural Waste in the ASEAN Region, Techno-Economic Assessment, April 2025
- ASEAN Secretariat / GHD / CTIF, ASEAN poised to produce 8.5 million barrels of sustainable aviation fuel daily by 2050, ASEAN 2050 SAF Outlook Report, January 2026
- White & Case, Ready for take-off: SAF opportunity for Indonesia and Malaysia
Frequently asked questions
Is Southeast Asia short of SAF feedstock?
Not at the regional level. The region’s agricultural and forestry waste could theoretically support a SAF supply of 7.5 million barrels per day by 2030. By 2050 the figure reaches 8.5 million barrels per day. At the project level, the answer depends on which pathway and feedstock a developer has contracted. The regional total does not matter.
Why is used cooking oil specifically so contested?
HEFA, the only commercially mature SAF pathway, runs on oils and fats. Used cooking oil is the main one available at scale. Collection rates are low: around 23 percent in Indonesia and 30 to 45 percent in Malaysia. Historically, Indonesia and Malaysia exported a large share of what they collected. Nearly every HEFA project in the region draws from the same limited pool.
Does choosing a different technology pathway solve the feedstock problem?
It changes which feedstocks are available, not whether feedstock still needs to be secured and contracted. ATJ and gasification pathways can run on cassava, rice straw, empty fruit bunches, and forestry residues. Those feedstocks are less contested than used cooking oil. Those pathways, however, carry higher capital cost and are less commercially proven than HEFA.
What does a lender actually want to see in a feedstock supply agreement?
A lender wants a defined volume and a price mechanism with pass-through protection. It wants a term long enough to match the financing tenor. A counterparty must pass independent checks on delivery and credit, the same scrutiny applied to an offtaker.
Are these feedstock dynamics the same in every Southeast Asian country?
No, and that is deliberately outside the scope of this article. Feedstock mix, aggregation infrastructure, and the level of competition for a given feedstock vary significantly by country. I am covering individual countries in more depth separately.
Not sure your project would survive a credit conversation?
A short call is usually enough to show where your project stands. It also shows what a lender or an equity investor will ask for. Tell me where your project is today, and I will tell you what the next conversation needs to look like.
I am Alex, founder of WeConnect Asia, based in Kuala Lumpur. Low-carbon fuel project developers in Southeast Asia come to me for the investors, lenders, offtakers, and feedstock partners they need to reach FID. I do not provide investment advice or arrange investments. I act as a strategic advisor and facilitator.
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