SK Energy Co. has signed an agreement to supply Cathay Pacific Airways Ltd. with more than 20,000 tons of sustainable aviation fuel through 2027, becoming the first South Korean refiner to provide biofuel to a Hong Kong airline.
The deal, announced Tuesday, builds on an existing partnership that began last November when Cathay Pacific started using SK Energy’s sustainable fuel for all flights departing from Incheon International Airport.
The aviation industry faces mounting pressure to reduce carbon emissions as regulators worldwide implement stricter environmental standards. The European Union has mandated a 2% blend of sustainable aviation fuel this year, with requirements rising to 6% by 2030 and 70% by 2050.
SK Energy, which established a 100,000-ton annual production capacity for low-carbon products last September, is positioning itself in a market projected to grow from $1.7 billion last year to $74.6 billion by 2034, according to Global Market Insights.
The Asia-Pacific region, where Hong Kong’s airport ranked fifth globally in passenger numbers last year, accounts for 80% of South Korean refiners’ export volume, making it a strategic focus for SK Energy’s sustainable fuel business.
SK Energy’s marketing head Lee Young-chul said the company plans to monitor policy changes and market conditions while working with partners like Cathay Pacific to build a stable global supply chain.
