South Korea to mandate 1% sustainable aviation fuel by 2027

The South Korean government plans to mandate a 1% blend of sustainable aviation fuel by 2027, marking a significant step toward reducing carbon emissions in the aviation sector, according to the Ministry of Land, Infrastructure and Transport.

This initiative is part of a broader policy that will include obligations for airlines to comply with fuel supply regulations. Details will be outlined in a road map scheduled for release in September, said a public relations manager at the Transport Ministry May 22.

The International Civil Aviation Organization adopted a target in November 2023 to cut carbon emissions by 5% through SAF usage by 2030. Member countries are encouraged to regularly update their national implementation plans to promote SAF adoption.

Specific blending ratios for subsequent years will be detailed in the upcoming road map.

SAF can decrease emissions by up to 80% compared with conventional jet fuel and has emerged as an alternative for reducing aviation carbon emissions. This aligns with global efforts to combat climate change, leading to increasing SAF mandates, according to senior official Lee Jong-jin from the Transport Ministry.

The mandatory blending ratio for SAF by 2030 will be determined by considering international agreements, refinery supply capacity and the cost burden on airlines, Lee said, emphasizing the need for a long-term goal for SAF to facilitate investment and infrastructure development in the industry, with plans to finalize the mandatory blending ratio by 2035.

Supply, demand policy support

With the implementation of the 1% SAF blending mandate in 2027, South Korea's annual domestic demand for SAF is projected to reach approximately 76,000 mt or around 556,000 barrels, according to the Transport Ministry.

Comparatively, South Korea consumed 32.9 million barrels of jet fuel in 2024 and 34.7 million barrels in 2023, state-run Korea National Oil Corp. data showed.

The Ministry of Land, Infrastructure and Transport is preparing to impose fuel supply obligations on suppliers and regulations for airlines regarding fuel tankering -- the practice of refueling at airports where fuel is either scarce or expensive, exceeding legal fuel limits.

Lee stressed the importance of a carefully considered regulatory framework, adding that if the government imposes SAF supply obligations solely on refineries, it must also address airline compliance concerns.

"We are currently reviewing tankering regulations, but it is essential to apply them flexibly after analyzing the long-standing regulations and procedures in the EU, as well as trends in supply and demand and jet fuel prices both domestically and internationally," Lee said.

As far as domestic supply is concerned, airlines and airports will not be deprived of both conventional jet fuel and SAF for many years to come as South Korean refiners are already the top aviation fuel suppliers in the Asian market, according to middle distillate and product marketing executives at major refiners, including SK Innovation and S-Oil.

At the very minimum, four domestic major refiners combined would be able to provide 400,000 barrels, or around 80% of the projected domestic SAF demand in 2027, according to Platts' calculation of production and sales target data provided by middle distillate marketing managers at four major domestic refiners. Platts is part of S&P Global Energy.

"We are already focusing on establishing firm export market share across Asia and Europe as well ... supplying and fulfilling domestic demand requirements won't be a problem," a product marketing manager at a major refiner based in Ulsan said.

In March, the country's top refiner, SK Innovation, signed a contract to supply 20,000 mt, or around 146,000 barrels of SAF to Hong Kong's Cathay Pacific until 2027. Deliveries have been underway at Incheon International Airport since November 2024, SK Innovation's refining arm SK Energy said.

The country's third-biggest refiner by capacity, S-Oil, said it achieved three green certifications for its sustainable and low-carbon products in 2024, marking a significant milestone for the company. S-Oil is the first South Korean refiner to obtain the ISCC CORSIA certification in the aviation sector, enabling it to produce SAF, the refiner said in a statement.