Cathay Pacific has teamed up with the State Power Investment Corporation (SPIC) to drive the further development of the Sustainable Aviation Fuel (SAF) supply chain in China. SPIC is one of the largest state-owned energy companies in the Chinese Mainland and a company with the world’s largest solar power installed capacity.
SPIC and Cathay Pacific have recently signed a Memorandum of Understanding (MoU) covering four SAF plants under SPIC. Witnessed by SPIC Chairman Qian Zhimin and Vice President Chen Haibin, Cathay Pacific Group Chief Executive Officer Ronald Lam, and Chief Operations and Service Delivery Officer-designate Alex McGowan, the MoU was signed by SPIC International Finance (HK) Co. Ltd. Chairman Yin Guoping and Cathay Pacific General Manager Corporate Affairs Andy Wong at Cathay Pacific’s Hong Kong headquarters.
SPIC Chairman Qian Zhimin said: “The signing of our cooperation pact is an important milestone in SPIC’s sustainable development pursuits, and a significant contribution by a Chinese enterprise towards supporting sustainable development in the global aviation sector. We hope both parties can build on our collaboration in the certification and purchase of SAF to further cooperate in areas pertaining to the industry supply chain, project development and securing the necessary policy support.”
Cathay Pacific Group CEO Ronald Lam said: “We are very excited to be partnering with SPIC to support and accelerate the development of the SAF industry in China. Cathay Pacific has a target of using SAF for 10% of its total fuel consumption by 2030, which is a core component towards reaching our goal of net-zero carbon emissions by 2050. This collaboration brings together the complementary advantages of SPIC’s strengths in the field of clean energy with Cathay Pacific’s expertise as an end-user of SAF. We hope this partnership will play an important role in the decarbonisation of the aviation industry. Under the MoU, Cathay Pacific will share international experience, and also feedback on the SAF certification process, value chain and overall market know-how to facilitate SPIC in the successful establishment of four SAF plants in the Chinese Mainland. Building and strengthening the SAF supply chain is an ambitious goal and one that requires extensive collaborative work with many stakeholders to achieve. We want to send a clear message that SAF is going to be the most important lever for achieving net-zero carbon emissions within the aviation industry, and that there will be clear and stable demand from airlines.”
The four SAF plants are expected to be commissioned between 2024 and 2026, and each will have the capacity to produce 50,000 to 100,000 tonnes of SAF annually. The plants will use a pathway similar to “Power-to-Liquids” (PtL) to generate the SAF, converting renewable electricity into liquid fuels.
Cathay Pacific is committed to pioneering the aviation industry’s move towards more substantial use of SAF, especially in Asia. In 2014, it was the first airline investor in Fulcrum BioEnergy, from which the airline has already committed to purchasing 1.1 million tonnes of SAF over 10 years, which covers around 2% of its pre-COVID-19 fuel requirements on an annual basis.
The airline also launched the Cathay Pacific Corporate SAF Programme – the first major programme of its kind in Asia – in 2022. The programme provides corporate customers the opportunity to reduce their carbon footprint from business travel or airfreight by contributing to the use of SAF, which was uplifted and used at Hong Kong International Airport for the first time as part of the programme. Cathay Pacific plans to scale up the programme in 2023, extending the service to more corporate customers.
Queensland refinery to use ag by products for SAF
Agricultural by-products including sugarcane will be turned into jet fuel through investment from the Qantas Group, Airbus and the Queensland Government, at a Queensland biofuel production facility being developed by Jet Zero Australia in partnership with leading sustainable aviation fuel technology company LanzaJet.
The Qantas Group and Airbus will jointly invest $2 million of an initial $6 million capital raising, with the Queensland Government contributing $760,000 and other Australian and international institutional funds providing additional funding. The money will be used to conduct a detailed feasibility study and early-stage project development.
The proposed facility will utilise LanzaJet’s world-leading alcohol-to-jet technology to produce up to 100 million litres of SAF per year. Construction is expected to start in 2024.
The Qantas Group and Airbus have committed to investing up to US$200 million to accelerate the establishment of a SAF industry in Australia. The facility is the first project funded under the Qantas and Airbus Australian Sustainable Aviation Fuel Partnership.
Qantas Group Chief Sustainability Officer Andrew Parker said the early project funding was an important first step towards building a domestic SAF industry, which will power flights around Australia. “Qantas will be the largest single customer for Australian-made SAF to meet our emissions reduction targets, which is why we’re investing in the ideas and technology that will build a local SAF industry,” Parker said. “This is one of several projects that we are looking to fund this year, all of which will help accelerate the decarbonisation of the aviation industry.”
The Qantas Group is currently purchasing SAF sourced overseas, including 10 million litres for flights out of London in 2023, and from 2025, 20 million litres per year for flights out of California. Domestically produced SAF will be a key part of Qantas reaching its commitment to use 10 percent SAF in its overall fuel mix by 2030 and achieve net zero emissions by 2050.
Qantas has also recently joined forces with five leading companies in Australia to form the SAF Coalition, which aims to demonstrate demand for SAF in Australia. The founding companies, Australia Post, Boston Consulting Group, KPMG Australia, Macquarie Group and Woodside Energy, are using SAF to reduce their carbon emissions alongside traditional carbon offsets.