• SAF demand is rising and will grow further as regulatory policies favour it.
• South Korea to introduce a 1% SAF blending mandate in 2027.

South Korea's leading renewable energy and chemicals producer, SK Energy, has signed an agreement with Hong Kong's Cathay to supply the latter with 20,000 tonnes of sustainable aviation fuel (SAF) by 2027.

This is the first deal in which a Korean refinery provides a large quantity of SAF to a Hong Kong-based airline. It comes on the heels of SK Energy’s first SAF export to Europe in January, highlighting its interest in growing within the expanding SAF market.

READ MORE: Honeywell and AM Green Sign Deal to Produce SAF in India

The deal amplifies SK Energy's 100,000-tonne annual SAF production capacity, using a co-processed method that integrates bio-feedstocks into traditional fuel production to create lower-carbon alternatives, including SAF and bio-naphtha.

Globally, demand for SAF is ratcheting up as a result of stricter environmental policies. In Europe, a 2% SAF mandate applies to all flights taking off from the continent and will rise to 70% by 2050. Meanwhile, the U.S. is primed to replace conventional jet fuel with SAF by 2050, South Korea will announce a 1% SAF blending mandate in 2027, and Singapore is mulling over SAF policies.

ALSO READ: UK Sustainable Aviation Fuel Mandate Takes Effect Today

The SAF demand is expected to grow from USD 1.7 billion in 2024 to USD 74.6 billion by 2034, and SK Energy is turning the tables to build its SAF supply chain by partnering with airlines like Cathay.

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Source: SK Energy