SK Energy is poised to make history as the first Korean refinery to supply a significant volume of Sustainable Aviation Fuel (SAF) to a Hong Kong-based airline. This milestone follows SK Energy's successful export of SAF to Europe earlier this year, reinforcing its strategic push to lead the Asia-Pacific (APAC) SAF market.

On March 10, SK Energy announced a contract with Cathay, Hong Kong's flagship airline, to supply 20,000 tons of ISCC-certified SAF through 2027. Since November 2024, SK Energy has been providing SAF to Cathay at Incheon International Airport. Both companies intend to expand SAF utilization across additional routes in the near future.

This agreement marks a pivotal achievement for SK Energy, occurring just two months after the company became the first Korean refinery to export SAF to Europe. The APAC region is critical for SK Energy, accounting for over 80% of its export volume. With Hong Kong International Airport ranking as the fifth busiest airport globally in passenger traffic, this partnership allows SK Energy to further solidify its presence in the region. Leveraging this strategic foothold, the company is actively working to strengthen its position in the APAC SAF market.

Industry experts highlight SK Energy’s success as a result of its innovative SAF production system. In September 2023, SK Energy established a production capacity of 100,000 tons per year using a co-processing method. This technique integrates bio-feedstock supply systems into existing petroleum processing lines, enabling the efficient production of low-carbon fuels such as SAF and bio-naphtha.

Global SAF demand is rising following the International Air Transport Association's (IATA) 2021 resolution to reduce aviation industry carbon emissions by 50% by 2050 compared to 2005 levels. The European Union now mandates that all departing flights must include at least 2% SAF in their fuel mix starting this year, increasing to 6% by 2030 and 70% by 2050. The United States has also committed to replacing conventional jet fuel with SAF by 2050. In APAC, Singapore plans to introduce a 1% SAF usage requirement by 2026, and South Korea will require airlines to blend 1% SAF in 2027. In preparation, South Korea’s Ministry of Land, Infrastructure, and Transport will set SAF usage targets by mid-2025.

Lee Young-chul, SK Energy's Marketing Division Head, affirmed the company’s commitment to monitoring global SAF policies and collaborating with Cathay and other partners to build a robust SAF supply chain.