South Korea's SK Innovation lays foundation to boost green aviation fuel production

South Korea's SK Innovation has acquired official qualifications to verify greenhouse gas emissions in accordance with Carbon Offsetting and Reduction Scheme for International Aviation, or CORSIA, setting the stage for the country's top refiner to accurately assess GHG emissions in aviation fuel's production-consumption cycle and boost output of eco-friendly jet fuel.

With an exception of China, most of the Asian nations are moving out of their respective COVID-19 lockdown phases with international borders opening up rapidly for quarantine free air travels.

Jet fuel demand and production are back in focus and the push for eco-friendly aviation fuel would also gain traction, middle distillate marketers at SK Innovation and other major South Korean refiners told S&P Global Commodity Insights over April 11-14.

SK Innovation said its Institute of Environmental Science & Technology has become the first CORSIA Verifier in Korean petroleum and refinery industry, allowing it to verify the greenhouse gas emissions for international flights.

SK Innovation can now verify the greenhouse gas emissions in accordance with CORSIA and the company plans to additionally acquire the Life Cycle Assessment, or LCA, capability to ensure objectivity and transparency in calculating GHG emissions during the production phase and consumption of aviation fuel, the top South Korean refiner said in a statement.

The company indicated that the LCA is a methodology that comprehensively evaluates the impact on the environment by quantifying the input and output of the life cycle of a product, and even measures its potential impact on the environment.

"We plan to complete the LCA of all products of SK Innovation's subsidiaries, including the battery materials, to contribute to achieving the company's 'Carbon to Green' strategy, building up the foundation for Green Transformation," said Seong-jun Lee, the Head of the Institute of Environmental Science & Technology.

South Korea produced 97.2 million barrels of jet fuel in 2021. The country's refining industry is poised to produce around 135 million barrels of aviation fuel in 2022, around 80% of 171 million barrels produced before the outbreak of COVID-19 in 2019, according to middle distillate marketers at three major South Korean refiners surveyed by S&P Global.

These major refiners aim to increase the share of the eco-friendly products to around 7%-10% of the overall aviation fuel output within the next three years, buoyed by adoption of such fuels by multiple airlines in South Korea and across Asia, according to the middle distillate marketers.

"Thanks to the CORSIA and LCA capabilities, SK Innovation can not only calculate the greenhouse gas emitted during the production of aviation fuel but also have much more accuracy and transparency in assessing the emission during consumption," SK Innovation said in a statement.

SK Innovation indicated that it will complete establishing the LCA system within this year.

"It will quantitatively assess the environmental impact of all production activities of SK Innovation and its subsidiaries, from crude oil and raw materials to production," Lee said.

Partnership with airlines

In September 2021, South Korea's national flag carrier Korean Air used carbon-neutral jet fuel produced by SK Innovation's refining unit SK Energy for a period of one month as a trial.

Korea Air had indicated that the airline would expand purchases of eco-friendly jet fuel for additional routes on a longer term in line with global efforts to reduce air travel's carbon footprint.

SK Innovation said it has calculated the amount of GHG emissions in the aviation industry and suggested measures on how to reduce them. The company has set up a system that supports the aviation companies in Korea to attain eco-friendly competitiveness.

In 2017, Korean Air became the country's first airline to use sustainable aviation fuel, SAF, for an international flight by trialing it on a flight departing from Chicago to Incheon.

Apart from SK Energy, Korean Air also partnered with Hyundai Oilbank in 2021, for manufacturing and consuming SAF.

In Korea, nine airline companies, including Korean Air, are participating in the CORSIA.

Every year, these companies submit the annual greenhouse gas emission report and verification report to the Ministry of Land, Infrastructure and Transport regarding their international flight service, and any company whose emissions go above the limit purchases the credit to offset the requirements.