[Featured Stock] Turning Restaurant Waste Oil into Premium Aviation Fuel... DS Danseok Aims to Dominate the 195 Trillion Market

DS Danseok is showing strong performance. As the U.S. government has decided to replace 100% of its domestic aviation fuel demand with Sustainable Aviation Fuel (SAF), the California state government and the aviation industry in the U.S. are taking the lead, which appears to be influencing DS Danseok's stock price. Recently, DS Danseok signed a supply contract worth 1.0216 trillion KRW with U.S. oil and natural gas giant Phillips 66 for pre-treated products intended for SAF. The contract period extends until November 30, 2027. Simply calculated, this is a large-scale supply contract worth approximately 370 billion KRW annually. Considering that SAF prices are about 2.5 to 8 times higher than conventional aviation fuel, the related industry expects the profit margin to be substantial.

As of 2:13 PM on the 31st, DS Danseok was trading at 83,100 KRW, up 4,800 KRW (6.13%) compared to the previous trading day.

The California Air Resources Board (CARB) signed an agreement on the 30th (local time) at San Francisco International Airport with Airlines for America (A4A), representing 12 major U.S. airlines, to expand the use of SAF. The goal is to increase SAF usage within California to over 200 million gallons (approximately 757 million liters) by 2035, more than 10 times the current level, covering about 40% of the region's aviation fuel demand.

According to the U.S. Department of Energy, SAF is the only means to achieve carbon neutrality in aviation fuel. The annual SAF production in the U.S. is expected to increase from 5 million gallons in 2021 to 3 billion gallons by 2030 and 35 billion gallons by 2050, a 7,000-fold increase. Tax credits are provided for SAF produced and sold domestically to encourage fuel suppliers to expand their facility investments.

It is known that blending just 1% SAF can reduce carbon emissions equivalent to those produced by 53,000 passenger cars over one year (160,000 tons). The U.S., Europe, and other regions are strengthening regulations to increase SAF usage. Made from animal and vegetable oils, waste oils, and other sources, SAF is an eco-friendly fuel that reduces carbon emissions by up to 80% compared to conventional aviation fuel.

Just as the automotive industry is increasing the proportion of electric vehicles to reduce carbon emissions, the aviation industry is increasing SAF usage. Investments to expand SAF production facilities are surging, and demand for 'HVO pre-treatment feedstock,' the raw material for next-generation SAF, is expected to rise sharply. The fact that DS Danseok has signed overseas supply contracts even before completing its HVO pre-treatment plant indicates the market's growth potential.

The SAF market is expected to increase about 20-fold by around 2027 compared to current levels. In particular, Japan is projected to dominate the Asian SAF market, which could reach approximately 22 trillion yen (about 195.5 trillion KRW), if it secures sufficient SAF manufacturing facilities and operational capabilities.