HONG KONG — On March 10, 2025, SK Energy and Cathay Pacific Airways formalized a pivotal supply agreement at Cathay Pacific’s headquarters, cementing a partnership that positions SK Energy as the first South Korean refiner to deliver Sustainable Aviation Fuel (SAF) to a Hong Kong-based airline. Announced the following day, the deal commits SK Energy to providing over 20,000 tons of SAF through 2027, a move that underscores the aviation sector’s accelerating shift toward lower-carbon fuel alternatives.
This collaboration builds on a foundation laid in November 2024, when Cathay Pacific began using SK Energy’s SAF for all flights departing Incheon International Airport. Produced from sustainable feedstocks like waste oils, SAF offers a significant reduction in carbon emissions compared to conventional jet fuel, aligning with global efforts to meet stringent environmental targets. The agreement arrives as the SAF market gains momentum, with Global Market Insights forecasting growth from $1.7 billion in 2024 to $74.6 billion by 2034, propelled by a 46% annual growth rate.
Regulatory pressures are a key driver. The European Union mandates a 2% SAF blend in 2025, rising to 70% by 2050, while the U.S. aims for a full SAF transition by mid-century. South Korea will enforce SAF blending for international flights starting in 2027. SK Energy’s strategic response includes a robust production system, established in September 2024, with a 100,000-ton annual capacity. Its coprocessing method—integrating bio-feedstocks into existing refineries—enhances efficiency and scalability.
“We will work with strategic partners like Cathay Pacific Airways to build a stable global SAF supply chain.” — Lee Young-chul, Head of Marketing, SK Energy
Lee Young-chul, SK Energy’s head of marketing, emphasized the company’s proactive stance: “We will closely monitor market conditions, including changes in domestic and international SAF policies and demand fluctuations, and work with strategic partners like Cathay Pacific Airways to build a stable global SAF supply chain.” The Asia-Pacific region, accounting for 80% of Korean refiner export volume, amplifies the deal’s significance, with Hong Kong International Airport—a top-five global hub by passenger numbers—serving as a critical launchpad.
This partnership not only strengthens SK Energy’s foothold in the SAF market but also positions Cathay Pacific as a regional leader in sustainable aviation, leveraging a key hub to drive decarbonization efforts across its extensive network.
