"Now Even Airplanes Are Eco-Friendly"… SK Energy Supplies Large Amounts of SAF to Hong Kong National Airline

Supplying 20,000 Tons... Annual Production Capacity Reaches 100,000 Tons
Expanding SAF in Response to Global Demand and EU Regulations

SK Energy, a subsidiary of SK Innovation's refining division, will become the first domestic oil refiner to supply large quantities of Sustainable Aviation Fuel (SAF) to a Hong Kong-based airline. SAF refers to eco-friendly aviation fuel made from biofuels and other sources to replace fossil fuel-based jet fuel. It is known that SAF can reduce carbon emissions by up to 90% compared to conventional jet fuel.

On the 11th, SK Energy announced that it signed a contract on the 10th to supply more than 20,000 tons of SAF to Cathay Pacific Airways, a Hong Kong-based airline, by 2027. Previously, Cathay Pacific had been supplied with jet fuel from SK Energy for the past 10 years, and since November last year, all aircraft departing from Incheon International Airport have been fueled with SAF supplied by SK Energy. Based on their amicable relationship, the two companies plan to expand the routes using SAF in the future.

Lee Young-chul, Head of Marketing Division at SK Energy (left), and Alex McGowan, Chief Operating and Service Officer at Cathay Pacific Airways (right), signed a sustainable aviation fuel (SAF) supply contract the previous day (10th) at Cathay Pacific Airways headquarters located on Chek Lap Kok Island, Hong Kong. Photo by SK Innovation

After exporting SAF to Europe in January, SK Energy entered the Asia-Pacific market in just over two months. The Asia-Pacific region is the largest hub market, accounting for more than 80% of domestic refiners' export volumes. Hong Kong Chek Lap Kok International Airport functioned as a major transfer hub in the Asia-Pacific region, ranking 5th worldwide in passenger numbers last year. Accordingly, SK Energy has set a policy to accelerate its penetration into the Asia-Pacific SAF market through this supply contract.

SK Energy has established the fastest large-scale production system domestically. In September last year, SK Energy completed production lines capable of producing low-carbon products, including SAF, at an annual level of 100,000 tons.

Global SAF demand has continuously grown since 2021, when the International Air Transport Association (IATA) passed a resolution to reduce the aviation industry's carbon dioxide emissions by 50% by 2050 compared to 2005. The European Union (EU) has mandated a 2% SAF blending rate starting this year and plans to increase the mandatory blending rate to 6% by 2030 and 70% by 2050. The United States has set a goal to replace all jet fuel with SAF by 2050.

Lee Young-chul, Head of Marketing at SK Energy, said, "We will closely monitor market conditions such as domestic and international SAF policy changes and demand fluctuations," adding, "By cooperating with various strategic partners, including Cathay Pacific Airways, we will build a stable global SAF supply chain."