Chemicals Advance Materials – Oleochemicals

Global oleochemical demand is surging due to the growing preference for eco-friendly products in sectors like personal care and cleaning. Malaysia remains a key player in this market, both as a significant consumer and producer of oleochemicals. It’s the second-largest market for Malaysian palm oil since 2019 and contributes about 20% to the global oleochemical capacity.

In 2022, the oleochemicals sector saw remarkable growth in exports, reaching RM37.2 billion, a 26% rise from the RM29.5 billion recorded in 2021. Imports also surged by 33% to RM10.9 billion, compared to RM8.2 billion in 2021.

Malaysian chemical industry players acknowledge their crucial role in ESG efforts, considering their involvement in emissions-intensive material manufacturing and transportation. ESG initiatives focus on sustainably sourcing raw materials, recycling, and waste reduction.

Prominent chemical firms like Linde, BASF, and Arkema S.A. are committed to ESG initiatives. They are actively working to curtail greenhouse gas emissions throughout their supply chains. This involves incorporating energy-efficient and clean fuels such as green hydrogen, a strategy that is anticipated to extend to Malaysia in due course.

Oleochemicals industry players are devoted to incorporating sustainability into their operations, aligning with ESG standards and guidelines. They prioritise compliance with regulations, including implementing practices for environmental management, human rights, workplace conditions, community development, and social impact.

An essential aspect of their sustainability effort involves obtaining Roundtable on Sustainable Palm Oil (RSPO) supply chain certification for palm-oil-based products. Vertical integration across the supply chain, from plantations to manufacturing, enhances the ability to source certified materials for oleochemical production. This approach bolsters transparency and traceability, bolstering industry credibility.