Refining Industry Accelerates Development of SAF and Bio-Marine Fuel Technologies Amid Expectations for Government Support
The oil refining industry is expected to face significant uncertainty this year due to complex factors such as the prolonged global economic downturn and rising exchange rates. In response, there is a growing trend of seeking breakthroughs through eco-friendly business initiatives. According to industry sources on January 5, the European Union (EU) has mandated that all aircraft departing from European airports must use a fuel blend containing at least 2% Sustainable Aviation Fuel (SAF) starting this year. The mandatory blending ratio is set to increase to 6% by 2030 and 70% by 2050. Similarly, the United States has set a goal to replace all aviation fuel with SAF by 2050. In line with this trend, the need for government support in the fields of SAF and bio-marine fuel was highlighted at the recent government-led "Petroleum Conference." Consequently, the industry is optimistic that concrete support measures will be introduced starting next year. On December 26, the Ministry of Trade, Industry, and Energy, along with the Ministry of Land, Infrastructure, and Transport, held the second plenary meeting of the "SAF Blending Mandate Design Task Force." SAF (Sustainable Aviation Fuel) is an alternative aviation fuel that reduces carbon emissions by up to 80% compared to conventional jet fuel. The SAF market, valued at approximately 1 trillion KRW in 2021, is projected to grow to around 29 trillion KRW by 2027, according to industry forecasts. Previously, the government announced plans to mandate a 1% SAF (Sustainable Aviation Fuel) blending requirement for all international flights departing from South Korea starting in 2027. This aligns with the International Civil Aviation Organization's (ICAO) Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which will become mandatory that year. In response, the oil refining industry has begun developing SAF to pioneer the eco-friendly aviation fuel market. SK Energy, a subsidiary of SK Innovation, has established a dedicated production line for SAF using the co-processing method and has commenced commercial production. Notably, SK Energy became the first South Korean oil refiner to export SAF to Europe. The exported SAF was produced through the co-processing method, which processes bio-feedstocks such as used cooking oil and animal fats. HD Hyundai Oilbank became the first in South Korea to export SAF to Japan in May 2024. The company reportedly exported products certified under the ISCC EU system, which is recognized by the European Union. GS Caltex supplied CORSIA-compliant SAF to Japan last year by blending general aviation fuel with SAF sourced from Finland’s Neste. The company also plans to invest in facilities (CAPEX) for direct production of SAF in the future. S-Oil also established a co-processing production line and began supplying SAF to Korean Air's regular passenger routes once a week in August 2024. In September, the company expanded its supply to include Asiana Airlines and T'way Air's regular passenger routes. Bio-marine fuel is emerging as a key eco-friendly business area for oil refiners. The market is projected to grow to 11 trillion KRW by 2034. Bio-marine fuel is a blend of traditional marine fuel and biodiesel, offering significant advantages such as eliminating the need to retrofit ship engines or fuel supply systems. Additionally, it can utilize the existing marine fuel supply infrastructure, making it a highly practical alternative. The government conducted a 1.5-year pilot project on bio-marine fuel from July 2023 to December 2024. Based on the results of this study, the Ministry of Trade, Industry, and Energy plans to establish quality standards and refine legal and institutional frameworks to support the domestic commercialization of new biofuels. As a result, bio-marine fuel is expected to become commercially available in South Korea as early as this year. An industry official stated, "Eco-friendly fuels such as SAF and bio-marine fuel are gaining attention as growth drivers for refiners, especially in light of stricter global regulations." They added, "With government support and advancements in technology, the domestic refining industry can secure a competitive edge in the global market." ChatGPT를 사용하여 번역한 기사입니다.
