Cathay Pacific, DHL expand SAF use in Asia through new cargo partnership

Cathay Pacific Airways and DHL Express have signed a cooperation agreement to expand the production and uptake of sustainable aviation fuel across Asia, marking the first SAF uplift on Air Hong Kong-operated flights.

Under the agreement, Cathay will supply DHL with 2,400 mt of SAF for international cargo flights departing from Seoul Incheon, Tokyo Narita and Singapore Changi airports through 2025, it said in a statement Aug. 13.

Operated by Air Hong Kong, Cathay's express freight subsidiary, these services will deliver an estimated 7,190 mt in life cycle greenhouse gas reductions, equivalent to more than 100 Airbus A330 freighter flights between Hong Kong and Singapore.

Strategic significance for cargo decarbonization

Air transport accounts for a disproportionate share of the logistics industry's GHG footprint, and freight-focused SAF uptake has been slower than in passenger aviation due to cost and supply constraints.

"SAF is the only practical short- to medium-term option for reducing aviation emissions," said Peter Bardens, DHL Express' senior vice president for Asia-Pacific network operations and aviation.

Bardens highlighted DHL's target to reach 6% SAF use by the end of 2025 and 30% by 2030, in line with the group's Strategy 2030 "green logistics" priorities.

Tom Owen, Cathay's cargo director, framed the collaboration as a milestone in the airline's SAF strategy.

"SAF remains a core pillar of our carbon reduction strategy, and collaboration is essential to scaling its use," Owen said. "We are excited to work with like-minded partners like DHL to make SAF more accessible and scalable, particularly in Asia."

Building a regional SAF ecosystem

The deal makes DHL the latest participant in Cathay's corporate SAF program, launched in 2022 to help partners address emissions from travel and freight through SAF procurement.

In 2024, the program facilitated more than 6,000 mt of SAF with 16 partners, including HSBC, AIA and Standard Chartered.

Cathay has also secured upstream supply partnerships to stabilize pricing and availability in a market where SAF still costs roughly three times more than conventional jet fuel.

Recent moves include a deal with Sinopec to uplift SAF at Hong Kong International Airport and a multiyear supply agreement with SK Energy in South Korea through 2025-2027.

DHL, meanwhile, has inked long-term SAF agreements with Neste, BP, World Energy, and Japan's Cosmo Oil Marketing, as well as a separate 7,400-mt deal with Neste for flights out of Singapore.

Policy, market outlook

SAF accounts for less than 1% of global jet fuel consumption, but the International Air Transport Association estimates production will need to scale from roughly 1.5 million mt in 2024 to 449 million mt annually by 2050 to meet net-zero targets.

Asia currently lags behind North America and Europe in SAF production capacity, with most supply concentrated in Singapore and Japan.

Industry analysts say cross-border partnerships like Cathay-DHL are crucial in the near term to aggregate demand, send market signals to producers and justify investments in regional refining capacity. Without supportive policy frameworks -- such as blending mandates, tax credits or life cycle carbon accounting recognition -- SAF pricing in Asia is expected to remain a barrier to large-scale adoption, particularly in the cost-sensitive cargo segment.

Platts, part of S&P Global Commodity Insights, assessed the Asia SAF-jet fuel spread at $1,266.23/mt on Aug. 14, up $15.61 day over day.