SK Energy has announced a significant agreement to provide a Hong Kong-based airline with a large amount of sustainable aviation fuel (SAF). This move follows their recent successful export of SAF to Europe and positions them as a key player in the growing Asia-Pacific SAF market, reports Biomass Magazine.
On March 10th, SK Energy revealed that they have signed a deal with Cathay Pacific, Hong Kong’s main airline, to supply at least 20,000 tons of SAF until 2027. Since November of last year, they have already started supplying certified SAF to Cathay at Incheon International Airport. Both companies plan to increase SAF usage on more routes in the future.
This agreement is a major step for SK Energy, securing a steady SAF supply contract with Hong Kong’s largest airline just two months after they became the first Korean refinery to export SAF to Europe. The Asia-Pacific region is SK Energy’s biggest export market, accounting for over 80% of their sales.
Hong Kong International Airport, a major travel hub in the Asia-Pacific region, ranked fifth globally in passenger numbers last year. SK Energy aims to use this export to Hong Kong to expand their reach in the Asia-Pacific SAF market.
Industry experts credit SK Energy’s success to their early adoption of large-scale SAF production. Last September, they established a production capacity of 100,000 tons per year and began producing SAF using a process that combines bio-materials with regular petroleum processing. This allows them to create lower-carbon products like SAF.
The demand for SAF is increasing worldwide. In 2021, the International Air Transport Association (IATA) set a goal to reduce the aviation industry’s carbon emissions by 50% by 2050.
The European Union has mandated that all flights departing from Europe must use a minimum of 2% SAF this year, with that number increasing to 6% by 2030 and 70% by 2050. The United States has set a target to replace all regular jet fuel with SAF by 2050.
In Asia, Singapore will introduce a SAF requirement of 1% in 2026, and South Korea will require a 1% blend in 2027.
Market research firm Global Market Insight predicts the global SAF market will grow significantly, from about $1.7 billion in 2024 to $74.6 billion by 2034.
In South Korea, the government plans to set SAF usage targets later this year, in preparation for a mandatory SAF blending requirement in 2027. Starting in 2027, all international flights leaving South Korea will be required to use SAF blends.
Lee Young-chul, Head of SK Energy’s Marketing Division, said, “We will pay close attention to changes in SAF policies and the market, both in Korea and internationally. We want to build a reliable global SAF supply chain by working with Cathay Pacific and other partners.”
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