Asia's sustainable aviation fuel projects and agreements
Recasts, updates factbox details for South Korea
SINGAPORE, Sept 20 (Reuters) -South Korea's GS Caltex, together with Japanese trading house Itochu 8001.T and major sustainable aviation fuel (SAF) producer Neste NESTE.HE, has delivered its first batch of the fuel to Japan for sale, Neste said in statement on Thursday.
The fuel is seen as crucial for the aviation sector to reach its goal of net zero carbon emissions by 2050, but its adoption remains in a nascent phase.
Following is a look at the latest SAF projects and agreements in the Asia-Pacific region.
SOUTH KOREA
South Korea aims to ensure all departing international flights use a mix of about 1% SAF from 2027.
Six South Korean airlines, including flag carrier Korean Air 003490.KS, have begun, or plan, to mix 1% of SAF in the fuel for a single international route once a week starting this year, its industry and transport ministries said.
SK Energy announced its completion of its SAF production unit on Sept. 11, with the oil major to supply the fuel to Korean Air passenger flights.
GS Caltex supplied its first SAF cargo, blended with neat SAF from Neste, to Japan in partnership with trading house Itochu on Sept. 19.
TAIWAN
Taiwan's airlines are encouraged by its civil aviation administration to use up to 5% of SAF in its fuel programme starting in 2030, although there is no mandate yet.
Refiner CPC should be importing SAF in the first half of next year, Taiwan's civil aviation administration said.
INDONESIA
Indonesia has mandated 3% biofuel blending by 2020 for jet fuel, but implementation has been delayed.
Indonesia's state-owned Pertamina in June issued its first spot purchase tender for SAF, to be delivered in August.
Indonesia flew its first commercial flight using palm oil-blended jet fuel in October 2023, after running a test flight with the same fuel on an aircraft flying from West Java to Jakarta.
SINGAPORE
Singapore announced in February it would aim for a 1% SAF target starting in 2026 and plans to raise it to 3%-5% by 2030, subject to global developments and the wider availability and adoption of SAF.
The Civil Aviation Authority of Singapore plans to introduce a SAF levy for the purchase of the fuel to be set at a fixed amount, based on the SAF target and projected SAF price at that time.
Singapore Airlines Group SIAL.SI in May ordered 1,000 metric tons of SAF from refiner Neste NESTE.HE, the first supply of such fuel in the city-state to airlines at Changi Airport.
CHINA
There is no set SAF mandate in China as of September 2024, but the Civil Aviation Authority of China launched the country's first technical centre for SAF that focuses on standard setting and product research in July.
NEW ZEALAND
There is no set SAF mandate in New Zealand as of September 2024.
Air New Zealand AIR.NZ received a 500,000-litre delivery of SAF manufactured by EcoCeres in China in Wellington in June, its first delivery to the capital city.
MALAYSIA
Malaysia's 2023 National Energy Transition Roadmap stated plans to install a 1% SAF blending mandate without providing a timeline. The target will be increased to 47% by 2050.
Malaysian state oil company Petronas and Japan's Idemitsu Kosan Co 5019.T, signed a preliminary agreement to collaborate on development and distribution of SAF in October 2023.
INDIA
India aims to have 1% SAF in aviation fuel by 2027, doubling to 2% in 2028. The SAF targets will initially apply to international flights.
Indian Oil Corp IOC.NS said in June 2023 it would set up an 80,000-metric-ton per year SAF plant with LanzaJet in Haryana. The company has a tie-up with LanzaTech for converting waste gas to ethanol and into jet fuel.
JAPAN
Japan is mandating that 10% of aviation fuel for international flights using Japanese airports be sustainable starting in 2030, the Ministry of Economy, Trade, and Industry has said.
Fuji Oil 5017.T began planning production of bio-SAF at Sodegaura Refinery with Itochu Corp 8001.T in May 2023.
Japan's top airlines, All Nippon Airways (ANA) 9202.T and Japan Airlines 9201.T, have expanded their SAF purchases by adding supplies from trading house Itochu and U.S. producer Raven SR.
Other companies exploring SAF production in Japan include Mitsubishi 8058.T, Boeing BA.N, and TotalEnergies TTEF.PA.
PHILIPPINES
Cebu Pacific CEB.PS flew a plane from Singapore to Manila powered by a 35% SAF blend from Neste in September 2022. The airline signed a long-term strategic partnership with Shell Eastern Petroleum to make SAF more widely available for its fleet, but the country does not have a mandate yet.
AUSTRALIA
Qantas Group QAN.AX launched the Sustainable Aviation Fuel Coalition (SAF Coalition) in collaboration with Australia Post, KPMG Australia, Macquarie Group, the local arm of Boston Consulting Group and Woodside Energy in November 2022.
Qantas and Airbus AIR.PA said in March 2023 they would jointly invest A$2 million ($1.34 million) in a biofuel refinery being set up in Australia's Queensland state to convert agricultural by-products into SAF.
Australia does not have a mandate yet.
Reporting by Cassandra Yap，Trixie Yap and Colleen Howe; Editing by Kevin Liffey and Jamie Freed
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