How SK Energy is Fuelling Cathay's Flights Sustainably

SK Energy, South Korea's largest refiner, has signed a contract with Hong Kong's Cathay airline to supply at least 18,000 tonnes of sustainable aviation fuel (SAF) by 2027. 

This initiative is part of SK Energy's ambitious strategy to solidify its position within the Asia-Pacific SAF market.

Following the success of its European SAF exports that began in January 2025, the company is keen to expand further in this sector.

Lee Young-chul, Head of SK Energy’s Marketing Division, says: “We will closely monitor changes in SAF policies and market dynamics both domestically and abroad.

“By collaborating with Cathay Pacific and other partners, we aim to build a stable global SAF supply chain.”

Expanding SAF

SK Energy has made impressive progress in SAF production and distribution:

• In September 2024, the company established a facility capable of producing 100,000 tonnes of SAF annually using co-processing technology
• The company successfully exported SAF to Europe in January 2025, becoming the first Korean oil refiner to do so
• SK Energy began supplying ISCC-certified SAF to Cathay at Incheon International Airport in November 2024.

The co-processing method it uses integrates bio-feedstocks into existing refinery infrastructure, enabling large-scale production of lower-carbon fuels such as SAF and bio-naphtha.

Aviation in Asia-Pacific

The Asia-Pacific region plays a critical role in SK Energy's global strategy, being the destination for more than 80% of its exports.

The company's deal with Cathay Pacific shows the significance of Hong Kong International Airport, which not only catered to more than 53 million passengers in 2024 but also serves as a key logistical hub in the region.

With more than 1,100 daily flights operated by more than 120 airlines, the integration of SAF at this scale could significantly contribute to the reduction of aviation-related carbon emissions in Asia.

The move to increase SAF supply to Hong Kong is seen by SK Energy as a strategic step towards capturing a larger share of the Asia-Pacific market, amidst growing global concerns over carbon footprints of airline operators.

Worldwide SAF demand

Global demand for SAF is on the rise, driven by international commitments to reduce carbon emissions in the aviation industry:

• The European Union has mandated that all flights departing from Europe must use a minimum of 2% SAF in their fuel mix, increasing to 6% by 2030 and 70% by 2050
• The United States aims to replace all conventional jet fuel with SAF by 2050
• Singapore plans to implement a SAF levy with a 1% usage target in 2026
• South Korea will introduce a 1% SAF blending mandate in 2027.

Despite this,  IATA reported “disappointingly slow” growth in SAF production in 2024.

“With airlines, the core of the value chain, earning just a 3.6% net margin, profitability expectations for SAF investors need to be slow and steady, not fast and furious,” said Willie Walsh, IATA’s Director General.

“But make no mistake that airlines are eager to buy SAF and there is money to be made by investors and companies who see the long-term future of decarbonisation.”

Market research firm Global Market Insight predicts that the global SAF market will grow at a compound annual growth rate of 46.2% – from approximately US$1.7bn in 2024 to US$74.6bn by 2034.

Cathay's SAF approach

Cathay Pacific is not new to environmental initiatives; its Corporate SAF Programme kickstarted in 2022 aims to speed up SAF adoption in Asia.

The airline sources SAF certified by internationally recognised sustainability standards, such as SK Energy’s ISCC certified SAF.

SK Energy has been providing SAF to Cathay at Incheon International Airport since November 2024.

Customers who use the Corporate SAF Programme help to scale up the use of SAF on Cathay Pacific and Cathay Cargo flights and the company will issue a verified emissions reduction certificate with a third-party assurance letter to help businesses reduce Scope 3 emissions.

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