SINGAPORE, March 12 (Reuters) - Apical Group is

considering investing in one or two sustainable aviation fuel

(SAF) projects in southeast Asia and Europe as demand for lower

carbon fuels rises towards 2030, a senior company executive

said.

These could come on the back of recent investment in a 1.2

billion euros ($1.31 billion) joint venture with Spain's Cepsa

to build southern Europe's largest biofuels plant. This

will start operating in 2026 and aims to produce 500,000 metric

tons per year (tpy) of renewable diesel and SAF.

"Hopefully, we can conclude a refinery plan in the next one

or two years," Apical's Executive Director Pratheepan

Karunagaran told Reuters.

Apical, a vegetable oil processor that is a member of

Singapore-based conglomerate RGE Group, aims to meet SAF demand

forecast to reach 18 million to 20 million tpy in 2030.

The company supplies organic feedstocks such as agricultural

waste from palm plantations and used cooking oil to biofuel

producers.

Karunagaran did not rule out Singapore, where the government

recently announced a mandate to use 1% SAF from 2026, as a

possible location for its new plants. Finnish biofuels producer

Neste already operates a SAF plant in the city state.

"The two projects are not necessarily going to be the same

size," he said, adding that should the project be in Singapore

it would also export SAF to meet demand elsewhere. The cost

would be "anywhere between $1,500 per ton to $2,000 per ton of

production capacity", Karunagaran said, depending on size.

Biofuels are seen by some as essential in decarbonising

transportation, such as aviation, which is hard to electrify.

SAF, which can be made synthetically from hydrogen or from

biological materials such as used cooking oil or wood chips, can

cost five times as much as conventional fuel and accounts for

just 0.2% of the jet fuel market, requiring government mandates

and policies to drive demand.

Organic feedstocks such as agricultural waste, used cooking

oil and animal fats are limited and SAF demand may exceed raw

material supply after 2030.

Renewable diesel and SAF demand is forecast to reach 50

million tons in 2030, with raw material supply falling short by

10 to 15 million tons, Apical executive Ansul Anurag said.

($1 = 0.915 euros)