SK Energy has become the first Korean oil refiner to export Sustainable Aviation Fuel (SAF) to Europe, aligning with the European Union’s new mandate on SAF usage. Announced on January 5, this milestone marks a significant step in the company's low-carbon energy initiatives.
The European Union has introduced regulations requiring at least two percent of aviation fuel to consist of SAF, effective from January 2025. This policy is part of broader climate goals aimed at reducing carbon emissions within the aviation sector, which is under increasing pressure to adopt sustainable practices.
SK Energy's SAF is produced using innovative Co-Processing technology, which incorporates bio-based materials like used cooking oil and animal fats alongside traditional petroleum production. This innovative method allows for the efficient production of lower-carbon alternatives such as SAF and bio-naphtha. The company officially launched its commercial SAF production back in September 2024, boasting an impressive annual production capacity of approximately 100,000 tons.
To maintain efficiency and support its new export initiative, SK Energy has established strong global value chains. The company partnered with SK On Trading International, which has invested significantly in waste-based raw material companies. Together, they have built comprehensive systems covering acquisition, production, and sales to support the SAF supply.
Lee Chun-kil, the Chief Strategy Officer at SK Energy and head of SK Innovation’s Ulsan Complex, expressed optimism about these developments, stating, “We will closely monitor domestic and international SAF policies. We will expand SAF production and exports accordingly.” His comments reflect the company’s commitment to adapting to rapidly changing market demands.
The aviation industry globally is advocating for innovative and sustainable solutions to mitigate carbon emissions. The International Air Transport Association (IATA) has set ambitious targets of achieving net-zero emissions by 2050, which includes cutting CO2 emissions by fifty percent compared to 2005 levels. The EU is also intensifying its commitment to SAF, planning to increase its usage to six percent by 2030 and seventy percent by 2050. Similarly, the United States aims to transition all aviation fuel to SAF by 2050.
On another front, increased opportunities for seafood exports from Iceland to the EU have emerged following the introduction of eight new duty-free import quotas, effective January 1. This new development broadens market access for Icelandic seafood products and responds to long-standing aspirations by Iceland to integrate more fully with the EU market.
The agreement, reached on November 30, 2023, allows for seafood tariff quotas covering more than fifty tariff numbers over the contract period extending from May 1, 2021, to April 30, 2028. The Icelandic government indicated some of the negotiations had taken longer than anticipated, but adjustments implicate unused quotas from previous periods will be redistributed across the remaining years of the agreement.
The agreed total quotas amount to 15,000 tons annually, but the government clarified they would see more than double this volume for the remainder of the agreement. Any unutilized quotas could be carried over until April 30, 2030, or until new agreements are created.
This agreement was accompanied by a comprehensive review of trade terms between Iceland and the EU, aiming to create channels for easier access for Icelandic seafood within the EU internal market. Interested parties can view the complete list of quotas available on the Government of Iceland’s official website.
Both SK Energy’s advancements within the aviation fuel sector and the new frameworks for Iceland’s seafood exports signify the changing dynamics of trade relationships between non-EU countries and European markets. These developments not only reflect economic opportunities but also echo global calls for sustainability and reduced environmental impact.
With growing momentum surrounding green initiatives and sustainable practices across various industries, it will be intriguing to see how these trends evolve and reshape international trade standards going forward.