On the 10th, SK Energy announced that it has signed a contract with Cathay Pacific Airways, a Hong Kong national airline, to supply more than 20,000 tons of sustainable aviation fuel (SAF) by 2027.
SK Energy noted that just two months after exporting SAF to Europe in January, it achieved another supply contract with Hong Kong's largest airline. The Asia-Pacific region is the largest market, accounting for over 80% of the export volume of domestic refiners.
Hong Kong International Airport ranked fifth worldwide in passenger numbers last year, establishing itself as a major transfer hub in the Asia-Pacific region. Accordingly, SK Energy plans to accelerate its efforts to penetrate the SAF market in the Asia-Pacific region through this supply contract.
SK Energy established a mass production system for low-carbon products with an annual production capacity of 100,000 tons last September and commenced commercial production of SAF using the co-processing method. Co-processing is a process that produces low-carbon products such as SAF and bio-naphtha by connecting separate supply pipelines for bio raw materials to existing petroleum product production lines.
Global SAF demand has increased since the International Air Transport Association (IATA) passed a resolution in 2021 to reduce carbon dioxide emissions from the aviation industry by 50% compared to 2005 levels by 2050.
The European Union (EU) has mandated a 2% mixture of SAF starting this year, with plans to expand the mandatory ratio to 6% by 2030 and 70% by 2050. The United States has set a goal to replace all aviation fuel with SAF by 2050.
In August last year, the Ministry of Trade, Industry and Energy and the Ministry of Land, Infrastructure and Transport announced that they would mandate the mixing of SAF for all international flights departing from the country starting in 2027.
According to market research firm Global Market Insights, the global SAF market is expected to grow at an average annual growth rate of 46.2%, reaching $74.6 billion (approximately 108.96 trillion won) by 2034, up from $1.7 billion (approximately 2.5 trillion won) last year.
Lee Yong-cheol, head of the marketing division of SK Energy, said, "We will closely monitor market conditions, including changes in domestic and international SAF policies and demand fluctuations, and collaborate with a variety of strategic partners, including Cathay Pacific Airways, to establish a stable global SAF supply chain."