DHL Express and Cathay Group sign new sustainable aviation fuel (SAF) deal to drive production and uptake in Asia
The SAF will be used on Air Hong Kong flights departing from Seoul Incheon, Tokyo Narita and Singapore Changi airports.
The new agreement underscores both parties' commitment to lower-carbon air logistics and driving the production and use of SAF for the air cargo sector.
HONG KONG SAR/SINGAPORE – Media OutReach Newswire – 13 August 2025 – DHL Express and the Cathay Group have entered into a new sustainable aviation fuel (SAF) partnership that reinforces their shared commitment to reducing greenhouse gas emissions in the air cargo industry. Under the agreement, Cathay will supply DHL Express with 2,400 metric tons of SAF for international flights departing from three airports in Asia namely Seoul Incheon International Airport, Tokyo Narita International Airport, and Singapore Changi Airport. These flights are operated by Air Hong Kong, a wholly owned subsidiary of the Cathay Group, which principally operates express cargo services for DHL Express.
Continuing through 2025, the partnership is expected to reduce lifecycle greenhouse gas emissions by approximately 7,190 metric tons —equivalent to the emissions of over 100 flights from Hong Kong to Singapore with an Airbus 330 freighter.
(L to R): Peter Bardens, Senior Vice President for Network Operations and Aviation – Asia Pacific, DHL Express; Tom Owen, Director Cargo, Cathay Group
'Sustainable aviation fuel currently accounts for less than 1% of the total global jet fuel consumption, yet air transport is one of our biggest sources of greenhouse gas emissions. Our decision to expand our SAF usage in Asia with Cathay is another important step that we have taken to drive momentum in SAF production and demand,' said Peter Bardens, Senior Vice President for Network Operations and Aviation – Asia Pacific, DHL Express. 'DHL Express is at the forefront of SAF adoption, and we look forward to seeing more partners and customers join us on this journey to build a more robust SAF ecosystem in Asia. Our continued investment in this area aligns with DHL Group's Strategy 2030, which recognizes 'green logistics of choice' as one of the four bottom lines.'
ADVERTISEMENT
This SAF deal builds on the long-standing partnership between DHL Express and the Cathay Group, including through Air Hong Kong. For more than two decades, Air Hong Kong has played a vital role in DHL Express's Asia Pacific network. This latest collaboration builds on that strong foundation and paves the way for deeper cooperation in advancing SAF.
(L to R): Samuel Lee, General Manager for Central Asia Hub, DHL Express; Wai Kheong Loh, Vice President of Commercial – Hong Kong & Macau, DHL Express; Peter Bardens, Senior Vice President for Network Operations and Aviation – Asia Pacific, DHL Express; Tom Owen, Director Cargo, Cathay Group; Clarence Tai, Chief Operating Officer, Air Hong Kong; Grace Cheung, General Manager, Sustainability, Cathay Group
'This partnership marks the first SAF uplift on Air Hong Kong flights, a key milestone for Cathay as we continue to expand the SAF usage across our global network. SAF remains a core pillar of our strategy to address our carbon emissions, and collaboration is essential to scaling its use. We are excited to be working with like-minded partners like DHL Express to make SAF more accessible and scalable, particularly in Asia,' said Tom Owen, Director Cargo, Cathay.
This collaboration makes DHL Express the latest strategic partner of Cathay's Corporate SAF Program, an initiative launched in 2022 to support corporate partners in addressing greenhouse gas emissions from business travel and airfreight through the use of SAF. In 2024, the Corporate SAF Program enabled the use of over 6,000 metric tons of SAF, with a record 16 partners participating, including HSBC, AIA and Standard Chartered.
Cathay has been steadily expanding its SAF efforts across the region. Earlier in 2025, the Group entered into an agreement with Sinopec to uplift SAF produced in the Chinese Mainland at Hong Kong International Airport, marking the first such export by Sinopec to Hong Kong. Additionally, Cathay has partnered with SK Energy to secure SAF supply in South Korea from 2025 to 2027. Apart from working closely with suppliers, the Group also co-initiated the Hong Kong Sustainable Aviation Fuel Coalition (HKSAFC) to collectively drive policy development and adoption of SAF locally. These initiatives reflect Cathay's mission to expand the use of SAF within its network and foster a regional SAF ecosystem.
Investments in SAF are therefore critical to ensuring its availability on a long-term and predictable basis. DHL Express has also been a frontrunner in scaling SAF uptake globally, securing long-term SAF agreements with multiple partners, including Neste, bp, and World Energy. Earlier this year, DHL Express also partnered with Cosmo Oil Marketing to use SAF produced in Japan for flights departing the country. Most recently, DHL Express completed an agreement with Neste that comprises 7,400 metric tons of SAF for international flights departing from Singapore Changi Airport, further demonstrating the company's proactive approach to driving SAF demand and supply across the region.
ADVERTISEMENT
These efforts will also enhance DHL's understanding of how to transport these alternative fuels, as it is a segment under its Strategy 2030's key growth sector, 'New Energy.' DHL Group is developing end-to-end logistics solutions for eight segments: wind, solar, electric vehicle (EV) and batteries, battery and energy storage systems, EV charging, grid, alternative fuel and hydrogen.
Hashtag: #DHL
The issuer is solely responsible for the content of this announcement.
DHL – The logistics company for the world
DHL is the leading global brand in the logistics industry. Our DHL divisions offer an unrivalled portfolio of logistics services ranging from national and international parcel delivery, e-commerce shipping and fulfillment solutions, international express, road, air and ocean transport to industrial supply chain management. With about 400,000 employees in more than 220 countries and territories worldwide, DHL connects people and businesses securely and reliably, enabling global sustainable trade flows. With specialized solutions for growth markets and industries including technology, life sciences and healthcare, engineering, manufacturing & energy, auto-mobility and retail, DHL is decisively positioned as 'The logistics company for the world'.
DHL is part of DHL Group. The Group generated revenues of more than 84.2 billion euros in 2024. With sustainable business practices and a commitment to society and the environment, the Group makes a positive contribution to the world. DHL Group aims to achieve net-zero emissions logistics by 2050.
On the Internet: group.dhl.com/press
Follow us at: X.com/DHLglobal
About the Cathay Group
Cathay is a leading premium travel lifestyle brand based in Hong Kong, offering products and services across four lines of business – Cathay Pacific, Cathay Cargo, HK Express and Lifestyle. Flights are provided by Cathay Pacific, the home airline of Hong Kong and a founding member of the oneworld global alliance. The Cathay Group also includes cargo division Cathay Cargo, low-cost carrier HK Express and various other subsidiaries. Cathay is a member of the Swire Group and is listed on the Hong Kong Stock Exchange (HKSE). For more information, please visit www.cathay.com.
About Air Hong Kong
Air Hong Kong is an express all-cargo carrier, principally operating express cargo services for DHL Express. The airline offers scheduled and charter services to 17 destinations in Asia, the Middle East, Europe and Australia. Air Hong Kong was established in 1986 as Hong Kong's first all-cargo airline. Today, the carrier operates an all-Airbus A330F freighter fleet comprising 4 A330-200F and 10 A330-300P2F aircraft. Air Hong Kong is a wholly owned subsidiary of Cathay Pacific Airways Limited. www.airhongkong.com.hk
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Arabian Post
4 days ago
- Arabian Post
DHL Express and Cathay Group sign new sustainable aviation fuel (SAF) deal to drive production and uptake in Asia
DHL Express purchases 2,400 metric tons of SAF from Cathay Group to be used on flights operated by Air Hong Kong, an express all-cargo carrier and wholly owned subsidiary of Cathay. The SAF will be used on Air Hong Kong flights departing from Seoul Incheon, Tokyo Narita and Singapore Changi airports. The new agreement underscores both parties' commitment to lower-carbon air logistics and driving the production and use of SAF for the air cargo sector. HONG KONG SAR/SINGAPORE – Media OutReach Newswire – 13 August 2025 – DHL Express and the Cathay Group have entered into a new sustainable aviation fuel (SAF) partnership that reinforces their shared commitment to reducing greenhouse gas emissions in the air cargo industry. Under the agreement, Cathay will supply DHL Express with 2,400 metric tons of SAF for international flights departing from three airports in Asia namely Seoul Incheon International Airport, Tokyo Narita International Airport, and Singapore Changi Airport. These flights are operated by Air Hong Kong, a wholly owned subsidiary of the Cathay Group, which principally operates express cargo services for DHL Express. Continuing through 2025, the partnership is expected to reduce lifecycle greenhouse gas emissions by approximately 7,190 metric tons —equivalent to the emissions of over 100 flights from Hong Kong to Singapore with an Airbus 330 freighter. (L to R): Peter Bardens, Senior Vice President for Network Operations and Aviation – Asia Pacific, DHL Express; Tom Owen, Director Cargo, Cathay Group 'Sustainable aviation fuel currently accounts for less than 1% of the total global jet fuel consumption, yet air transport is one of our biggest sources of greenhouse gas emissions. Our decision to expand our SAF usage in Asia with Cathay is another important step that we have taken to drive momentum in SAF production and demand,' said Peter Bardens, Senior Vice President for Network Operations and Aviation – Asia Pacific, DHL Express. 'DHL Express is at the forefront of SAF adoption, and we look forward to seeing more partners and customers join us on this journey to build a more robust SAF ecosystem in Asia. Our continued investment in this area aligns with DHL Group's Strategy 2030, which recognizes 'green logistics of choice' as one of the four bottom lines.' ADVERTISEMENT This SAF deal builds on the long-standing partnership between DHL Express and the Cathay Group, including through Air Hong Kong. For more than two decades, Air Hong Kong has played a vital role in DHL Express's Asia Pacific network. This latest collaboration builds on that strong foundation and paves the way for deeper cooperation in advancing SAF. (L to R): Samuel Lee, General Manager for Central Asia Hub, DHL Express; Wai Kheong Loh, Vice President of Commercial – Hong Kong & Macau, DHL Express; Peter Bardens, Senior Vice President for Network Operations and Aviation – Asia Pacific, DHL Express; Tom Owen, Director Cargo, Cathay Group; Clarence Tai, Chief Operating Officer, Air Hong Kong; Grace Cheung, General Manager, Sustainability, Cathay Group 'This partnership marks the first SAF uplift on Air Hong Kong flights, a key milestone for Cathay as we continue to expand the SAF usage across our global network. SAF remains a core pillar of our strategy to address our carbon emissions, and collaboration is essential to scaling its use. We are excited to be working with like-minded partners like DHL Express to make SAF more accessible and scalable, particularly in Asia,' said Tom Owen, Director Cargo, Cathay. This collaboration makes DHL Express the latest strategic partner of Cathay's Corporate SAF Program, an initiative launched in 2022 to support corporate partners in addressing greenhouse gas emissions from business travel and airfreight through the use of SAF. In 2024, the Corporate SAF Program enabled the use of over 6,000 metric tons of SAF, with a record 16 partners participating, including HSBC, AIA and Standard Chartered. Cathay has been steadily expanding its SAF efforts across the region. Earlier in 2025, the Group entered into an agreement with Sinopec to uplift SAF produced in the Chinese Mainland at Hong Kong International Airport, marking the first such export by Sinopec to Hong Kong. Additionally, Cathay has partnered with SK Energy to secure SAF supply in South Korea from 2025 to 2027. Apart from working closely with suppliers, the Group also co-initiated the Hong Kong Sustainable Aviation Fuel Coalition (HKSAFC) to collectively drive policy development and adoption of SAF locally. These initiatives reflect Cathay's mission to expand the use of SAF within its network and foster a regional SAF ecosystem. Investments in SAF are therefore critical to ensuring its availability on a long-term and predictable basis. DHL Express has also been a frontrunner in scaling SAF uptake globally, securing long-term SAF agreements with multiple partners, including Neste, bp, and World Energy. Earlier this year, DHL Express also partnered with Cosmo Oil Marketing to use SAF produced in Japan for flights departing the country. Most recently, DHL Express completed an agreement with Neste that comprises 7,400 metric tons of SAF for international flights departing from Singapore Changi Airport, further demonstrating the company's proactive approach to driving SAF demand and supply across the region. ADVERTISEMENT These efforts will also enhance DHL's understanding of how to transport these alternative fuels, as it is a segment under its Strategy 2030's key growth sector, 'New Energy.' DHL Group is developing end-to-end logistics solutions for eight segments: wind, solar, electric vehicle (EV) and batteries, battery and energy storage systems, EV charging, grid, alternative fuel and hydrogen. Hashtag: #DHL The issuer is solely responsible for the content of this announcement. DHL – The logistics company for the world DHL is the leading global brand in the logistics industry. Our DHL divisions offer an unrivalled portfolio of logistics services ranging from national and international parcel delivery, e-commerce shipping and fulfillment solutions, international express, road, air and ocean transport to industrial supply chain management. With about 400,000 employees in more than 220 countries and territories worldwide, DHL connects people and businesses securely and reliably, enabling global sustainable trade flows. With specialized solutions for growth markets and industries including technology, life sciences and healthcare, engineering, manufacturing & energy, auto-mobility and retail, DHL is decisively positioned as 'The logistics company for the world'. DHL is part of DHL Group. The Group generated revenues of more than 84.2 billion euros in 2024. With sustainable business practices and a commitment to society and the environment, the Group makes a positive contribution to the world. DHL Group aims to achieve net-zero emissions logistics by 2050. On the Internet: Follow us at: About the Cathay Group Cathay is a leading premium travel lifestyle brand based in Hong Kong, offering products and services across four lines of business – Cathay Pacific, Cathay Cargo, HK Express and Lifestyle. Flights are provided by Cathay Pacific, the home airline of Hong Kong and a founding member of the oneworld global alliance. The Cathay Group also includes cargo division Cathay Cargo, low-cost carrier HK Express and various other subsidiaries. Cathay is a member of the Swire Group and is listed on the Hong Kong Stock Exchange (HKSE). For more information, please visit About Air Hong Kong Air Hong Kong is an express all-cargo carrier, principally operating express cargo services for DHL Express. The airline offers scheduled and charter services to 17 destinations in Asia, the Middle East, Europe and Australia. Air Hong Kong was established in 1986 as Hong Kong's first all-cargo airline. Today, the carrier operates an all-Airbus A330F freighter fleet comprising 4 A330-200F and 10 A330-300P2F aircraft. Air Hong Kong is a wholly owned subsidiary of Cathay Pacific Airways Limited.
Zawya
4 days ago
- Zawya
DHL Express and Cathay Group sign new sustainable aviation fuel (SAF) deal to drive production and uptake in Asia
DHL Express purchases 2,400 metric tons of SAF from Cathay Group to be used on flights operated by Air Hong Kong, an express all-cargo carrier and wholly owned subsidiary of Cathay. The SAF will be used on Air Hong Kong flights departing from Seoul Incheon, Tokyo Narita and Singapore Changi airports. The new agreement underscores both parties' commitment to lower-carbon air logistics and driving the production and use of SAF for the air cargo sector. HONG KONG SAR/SINGAPORE - Media OutReach Newswire - 13 August 2025 - DHL Express and the Cathay Group have entered into a new sustainable aviation fuel (SAF) partnership that reinforces their shared commitment to reducing greenhouse gas emissions in the air cargo industry. Under the agreement, Cathay will supply DHL Express with 2,400 metric tons of SAF for international flights departing from three airports in Asia namely Seoul Incheon International Airport, Tokyo Narita International Airport, and Singapore Changi Airport. These flights are operated by Air Hong Kong, a wholly owned subsidiary of the Cathay Group, which principally operates express cargo services for DHL Express. Continuing through 2025, the partnership is expected to reduce lifecycle greenhouse gas emissions by approximately 7,190 metric tons —equivalent to the emissions of over 100 flights from Hong Kong to Singapore with an Airbus 330 freighter. "Sustainable aviation fuel currently accounts for less than 1% of the total global jet fuel consumption, yet air transport is one of our biggest sources of greenhouse gas emissions. Our decision to expand our SAF usage in Asia with Cathay is another important step that we have taken to drive momentum in SAF production and demand," said Peter Bardens, Senior Vice President for Network Operations and Aviation – Asia Pacific, DHL Express. "DHL Express is at the forefront of SAF adoption, and we look forward to seeing more partners and customers join us on this journey to build a more robust SAF ecosystem in Asia. Our continued investment in this area aligns with DHL Group's Strategy 2030, which recognizes 'green logistics of choice' as one of the four bottom lines." This SAF deal builds on the long-standing partnership between DHL Express and the Cathay Group, including through Air Hong Kong. For more than two decades, Air Hong Kong has played a vital role in DHL Express's Asia Pacific network. This latest collaboration builds on that strong foundation and paves the way for deeper cooperation in advancing SAF. "This partnership marks the first SAF uplift on Air Hong Kong flights, a key milestone for Cathay as we continue to expand the SAF usage across our global network. SAF remains a core pillar of our strategy to address our carbon emissions, and collaboration is essential to scaling its use. We are excited to be working with like-minded partners like DHL Express to make SAF more accessible and scalable, particularly in Asia," said Tom Owen, Director Cargo, Cathay. This collaboration makes DHL Express the latest strategic partner of Cathay's Corporate SAF Program, an initiative launched in 2022 to support corporate partners in addressing greenhouse gas emissions from business travel and airfreight through the use of SAF. In 2024, the Corporate SAF Program enabled the use of over 6,000 metric tons of SAF, with a record 16 partners participating, including HSBC, AIA and Standard Chartered. Cathay has been steadily expanding its SAF efforts across the region. Earlier in 2025, the Group entered into an agreement with Sinopec to uplift SAF produced in the Chinese Mainland at Hong Kong International Airport, marking the first such export by Sinopec to Hong Kong. Additionally, Cathay has partnered with SK Energy to secure SAF supply in South Korea from 2025 to 2027. Apart from working closely with suppliers, the Group also co-initiated the Hong Kong Sustainable Aviation Fuel Coalition (HKSAFC) to collectively drive policy development and adoption of SAF locally. These initiatives reflect Cathay's mission to expand the use of SAF within its network and foster a regional SAF ecosystem. Investments in SAF are therefore critical to ensuring its availability on a long-term and predictable basis. DHL Express has also been a frontrunner in scaling SAF uptake globally, securing long-term SAF agreements with multiple partners, including Neste, bp, and World Energy. Earlier this year, DHL Express also partnered with Cosmo Oil Marketing to use SAF produced in Japan for flights departing the country. Most recently, DHL Express completed an agreement with Neste that comprises 7,400 metric tons of SAF for international flights departing from Singapore Changi Airport, further demonstrating the company's proactive approach to driving SAF demand and supply across the region. These efforts will also enhance DHL's understanding of how to transport these alternative fuels, as it is a segment under its Strategy 2030's key growth sector, "New Energy." DHL Group is developing end-to-end logistics solutions for eight segments: wind, solar, electric vehicle (EV) and batteries, battery and energy storage systems, EV charging, grid, alternative fuel and hydrogen. Hashtag: #DHL The issuer is solely responsible for the content of this announcement. DHL – The logistics company for the world DHL is the leading global brand in the logistics industry. Our DHL divisions offer an unrivalled portfolio of logistics services ranging from national and international parcel delivery, e-commerce shipping and fulfillment solutions, international express, road, air and ocean transport to industrial supply chain management. With about 400,000 employees in more than 220 countries and territories worldwide, DHL connects people and businesses securely and reliably, enabling global sustainable trade flows. With specialized solutions for growth markets and industries including technology, life sciences and healthcare, engineering, manufacturing & energy, auto-mobility and retail, DHL is decisively positioned as "The logistics company for the world". DHL is part of DHL Group. The Group generated revenues of more than 84.2 billion euros in 2024. With sustainable business practices and a commitment to society and the environment, the Group makes a positive contribution to the world. DHL Group aims to achieve net-zero emissions logistics by 2050. On the Internet: Follow us at: About the Cathay Group Cathay is a leading premium travel lifestyle brand based in Hong Kong, offering products and services across four lines of business – Cathay Pacific, Cathay Cargo, HK Express and Lifestyle. Flights are provided by Cathay Pacific, the home airline of Hong Kong and a founding member of the one world global alliance. The Cathay Group also includes cargo division Cathay Cargo, low-cost carrier HK Express and various other subsidiaries. Cathay is a member of the Swire Group and is listed on the Hong Kong Stock Exchange (HKSE). For more information, please visit About Air Hong Kong Air Hong Kong is an express all-cargo carrier, principally operating express cargo services for DHL Express. The airline offers scheduled and charter services to 17 destinations in Asia, the Middle East, Europe and Australia. Air Hong Kong was established in 1986 as Hong Kong's first all-cargo airline. Today, the carrier operates an all-Airbus A330F freighter fleet comprising 4 A330-200F and 10 A330-300P2F aircraft. Air Hong Kong is a wholly owned subsidiary of Cathay Pacific Airways Limited. DHL
Zawya
6 days ago
- Zawya
The airline industry's dirty secret: Clean jet fuel failures
In 2019, Scott Kirby, the chief executive of United Airlines, hailed its new contract with green jet fuel producer World Energy as an example for the aviation industry to follow in its drive to cut emissions. Six years later, that collaboration is dead. Boston-based World Energy was one of the first companies in the world to produce commercial quantities of sustainable aviation fuel (SAF), a type of renewable fuel made from sources such as used cooking oil, agricultural residues and other waste. Its Paramount refinery near downtown Los Angeles had been a rare success story, supplying millions of gallons of SAF a year to airlines such as United Airlines and fellow U.S. carrier JetBlue Airways. The plant, which began operations in 2016, was central to the carriers' pledges to help the airline industry switch to a blend of 10% SAF by the end of this decade. But the refinery quietly ceased operations in April. And World Energy's plans for a second plant in Houston have stalled amid a lack of commitment from the industry, according to Chief Executive Gene Gebolys. "Some airlines were engaged in a pretty disingenuous effort to put out press releases" overstating their commitment to SAF projects, Gebolys said, without naming any companies. "People sometimes said too much in the past and did too little." Still, Gebolys acknowledged that some airlines have made a genuine effort to support SAF producers, while governments also needed to step up with stronger incentives to drive progress. The termination of United's fuel purchase contract with World Energy - and the closure of the Paramount refinery - have not previously been reported. United Airlines said it ended its relationship with World Energy "a few years ago", without providing a reason. A JetBlue spokesperson said World Energy has been a "valued partner" since 2020 and it will continue working with the company. World Energy's struggles mirror the plight of dozens of clean fuel startups, according to a Reuters review of the sector. Nearly 20 years after the first commercial flight powered partly by biofuels made the short hop from London to Amsterdam, Reuters found that the airline industry's plans to go green before regulators start penalising them are little more than a pipe dream. NO CLEAR PATHWAY The International Air Transport Association (IATA), a global body that represents 340 airlines, forecasts SAF will account for 0.7% of total jet fuel this year, up from 0.3% in 2024. Air passenger traffic, meanwhile, is expected to rise 6% this year, IATA says. IATA has set a goal of net zero emissions by 2050, a target that would require airlines to ramp up SAF use to 118 billion gallons annually, a more than 300-fold increase from current production. Airline industry leaders point to a wave of new SAF initiatives they say will spark a boom similar to the rapid rise of electric vehicles and solar energy. However, the aviation sector has yet to publish a comprehensive roadmap or a transparent database of upcoming SAF projects that would allow regulators and the public to assess the credibility of these projections. To scrutinise the industry's claims, Reuters built its own database of airline SAF initiatives - offering the most comprehensive view yet of the sector's faltering green progress and revealing that the industry has no clear pathway to hitting net zero targets. While airlines have announced 165 SAF projects over the past 12 years, only 36 have materialised, Reuters found. Among those, Reuters uncovered problems at three of the largest - including World Energy - that exemplify the systemic challenges plaguing the SAF sector. Of the remaining projects, 23 have been abandoned, 27 are delayed or on indefinite hold, 31 have yet to produce any fuel, and 4 are SAF credit deals, where no physical fuel is delivered. For the other 44 projects, Reuters was unable to find any public updates since their initial announcements. If all the pending projects announced by airlines reached their maximum potential, it would only add 12 billion gallons of SAF production, the Reuters analysis found. That's about 10% of what's needed to hit the net zero target. Airlines pin the problems on the oil industry, saying it isn't producing enough fuel. "These guys are the cause of the problem, and they've got to start playing their part," said Willie Walsh, director of IATA, the global airline lobby, and a former chief executive of British Airways and its parent International Airlines Group . At the moment, SAF costs three to five times more than jet fuel and some oil company executives argue that there is limited demand from airlines at current prices. "I'd like there to be a shortage. I actually see an overcapacity," Bernard Pinatel, the head of downstream and marketing and services at TotalEnergies, told a press briefing in June. PARAMOUNT 'RESET' The Paramount refinery, which used cooking oil and animal fat from a local abattoir to make fuel, repeatedly stumbled in its efforts to expand and all 35 employees were laid off in April, two sources with direct knowledge of the matter said. The future of the plant is uncertain, the two people said, after World Energy's partner, Air Products, withdrew from the project in February, citing challenging commercial conditions tied to the expansion and operations. Air Products, a U.S. industrial gases and chemicals company, had been slated to lead a $2 billion expansion of the site. World Energy CEO Gebolys said Paramount's closure was a "reset" because the refurbishment was over budget and behind schedule. He said it would come back online, without giving a time frame. He declined to comment about the layoffs. According to more than a dozen people directly involved in the sector, airlines play minimal roles in the execution of projects and, in most cases, their only commitment is to buy SAF when their partners produce it. What's more, airlines are making bold projections about SAF use and emissions reductions based on unproven technologies or early-stage projects run by startups with no experience of commercial production, Reuters found. Of the 36 projects that have produced any SAF, all but one rely on the Hydroprocessed Esters and Fatty Acids (HEFA) process to convert waste oils, fats and grease into jet fuel. HEFA was the technology used at Paramount. However, HEFA plants are severely constrained by the limited availability of suitable raw materials and cannot meet the industry's long-term fuel demands, three industry specialists said. IATA chief economist and sustainability executive Marie Owens Thomsen disputed the idea airlines only play a minimal role, saying they were striking SAF purchase agreements and investing in new technologies, supporting early-stage innovation and collaborating with research institutions. She also said alternative ways of making SAF needed to be developed alongside HEFA, as this process alone would not be sufficient to produce enough fuel to hit net zero by 2050. 'EXERCISE IN FUTILITY' Aviation accounts for 2.5% of global emissions of planet-warming gases such as carbon dioxide. This figure is expected to rise as air traffic more than doubles from 2019 levels by 2050 and fuel use rises 59%, according to environmental advocacy group Transport & Environment (T&E). By painting a picture of imminent breakthroughs and success in producing SAF at scale, airlines can bolster their green credentials while deflecting pressure for more disruptive interventions, such as stricter emissions caps or higher carbon taxes, the group said. "This is first and foremost about justifying never-ending growth and pretending that you can do that without heating the planet more and more - which you cannot do," said Almuth Ernsting, a campaigner with advocacy group Biofuelwatch. Failing to find a solution could prove costly. Under new EU rules, airlines face escalating mandates to use SAF on flights departing from EU airports. The mandate starts with at least 2% of their fuel in 2025, climbing to 6% by 2030, and eventually hitting 70% by 2050. European SAF mandates are expected to cost airlines $2.9 billion in additional fuel purchases and compliance expenses this year, according to IATA estimates. The return to power of U.S. President Donald Trump could further hamper the industry's green transition. Trump has pledged to roll back many incentives his predecessor, Joe Biden, offered to SAF and other green energy projects. As projects flounder in the United States, the U.S. airline industry has pinned hopes on a new SAF bonanza in Panama. It's already hitting the skids, Reuters found. SGP BioEnergy, headquartered in New York, pledged in 2022 to build the world's largest SAF facility, in collaboration with the government of Panama. The plant is to make green fuel from industrial hemp oil and used cooking oil. Due to start this year, production has been pushed back to 2027. SGP BioEnergy Chief Executive Randy Letang said the delay was largely due to airlines showing less interest in backing SAF projects than in the past. Panama's energy secretary did not respond to a request for comment. After the plant opens, the company may switch to making renewable diesel for trucks and ships, because those industries showed more enthusiasm than aviation, Letang said. "We're only going to take it so far with SAF until we determine whether or not the airlines are actually serious about making the commitments for this fuel," he said. Letang said airlines were competing to announce their own marquee projects, when producers actually needed consortiums made up of many carriers to invest in large-scale projects. "That's how you build this industry. Without that, it's an exercise in futility, quite frankly," he said. "The airlines could do a lot more." A few years ago, Letang was striking big SAF deals with major airlines through his previous biofuels venture, SG Preston. In 2016, JetBlue announced a 10-year commitment to buy commercial volumes of green fuel from SG Preston, calling it one of the largest such deals in history. JetBlue said in 2021 it would double down on the deal as it pursued a target to use SAF for 8% of its fuel needs by 2023. Australia's Qantas Airways signed a similar 10-year deal with SG Preston in 2017 for 8 million gallons of SAF annually starting in 2020 to help power flights between Los Angeles and Australia. The deals were based on SG Preston's plan to build five plants across North America - two in Ohio and one each in Indiana, Michigan, and Ontario. None has been built. SG Preston filed for bankruptcy in 2022, according to company filings. A spokesperson for Letang's current firm, SGP BioEnergy, said the two companies had no affiliation. NEW TECHNOLOGY While most SAF projects rely on HEFA, British startup Velocys uses Fischer-Tropsch technology, which converts waste such as garbage, wood chips, or flared gas into clean fuel. IAG - the parent of British Airways, Iberia, Vueling and Aer Lingus - has been an enthusiastic backer, announcing four major SAF initiatives with Velocys over the past 15 years. But despite producing SAF in pilot projects, none of the Velocys projects has reached commercial production. Its challenges began in 2010 with a project to turn methane from a London landfill into jet fuel. That venture collapsed when its main backer went bankrupt. Since then Velocys has attempted to build its own plants - including in Oklahoma - but it has proven too costly and technically challenging. After shutting the Oklahoma plant, Velocys shifted focus to two new projects: one at Immingham in northeast England and another in Mississippi. British oil major Shell and IAG initially backed Velocys's English venture, and the British government awarded a 27 million pound ($37 million) grant in 2022, then another 3 million pounds in July. However, Shell backed out in 2021 to pursue its own SAF ventures. Shell declined further comment. While IAG has no purchase deal with Velocys, it maintains a partnership and expects production to begin in 2029. Velocys Chief Executive Matthew Viergutz remains optimistic, saying the company has learned from past setbacks. However, the Mississippi project is on hold pending clarity on U.S. SAF regulations. The Immingham project was meant to start supplying British Airways last year. The plant site is a dusty field, empty but for a blue portable toilet lying on its side. Velocys has yet to sell a drop of green jet fuel to IAG or any other airline. (Reporting by Joanna Plucinska in London and Immingham, Joe Brock in Los Angeles, Marleen Kasebier in Gdansk and Paul Carsten in London; Additional reporting by America Hernandez and Tim Hepher in Paris and Elida Moreno in Panama City; Editing by David Clarke)
