Cathay Pacific collaborates with China’s State Power Investment Corp. to develop SAF supply chain

Witnessed by Qian Zhimin, the chairman of SPIC (standing, second from right), and Chen Haibin, SPIC vice president (standing, first from right), Ronald Lam, CEO of Cathay Pacific Group (standing, second from left), and Alex McGowan, Cathay Pacific Group’s chief operations and service-delivery officer designate (standing, first from left), the MOU was signed by Yin Guoping, chairman of SPIC International Finance (HK) Co. Ltd. (seated, right), and Andy Wong, Cathay Pacific’s general manager of corporate affairs (seated, left), at Cathay Pacific’s Hong Kong headquarters. (Photo: Cathay Pacific)

Cathay Pacific has teamed up with the State Power Investment Corp. 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 on 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 Qian Zhimin, the chairman of SPIC, and Chen Haibin, SPIC vice president, Ronald Lam, CEO of Cathay Pacific Group, and Alex McGowan, Cathay Pacific Group’s chief operations and service-delivery officer designate, the MOU was signed by Yin Guoping, chairman of SPIC International Finance (HK) Co. Ltd., and Andy Wong, Cathay Pacific’s general manager of corporate affairs, at Cathay Pacific’s Hong Kong headquarters.

“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,” Zhimin said. “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.”

Lam added, “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 percent 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 decarbonization 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 on 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 metric tons (approximately 16.5 million gallons to 33 million gallons) 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 tons of SAF over 10 years, which covers around 2 percent of its pre-COVID-19 fuel requirements on an annual basis.

The airline also launched the Cathay Pacific Corporate SAF Programme—the first major program of its kind in Asia—in 2022. The program 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 program.

Cathay Pacific plans to scale up the program in 2023, extending the service to more corporate customers.