South Korea to require use of SAF for flights from 2027

Spanish Market: Biofuels, Hydrogen, Oil products
30/08/24

South Korea said it plans to require all international flights departing from its airports to use a mix of 1pc sustainable aviation fuel (SAF) from 2027.

This comes as more countries are adopting SAF mandates in accordance with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Singapore earlier this year announced a 1pc SAF blending mandate from 2026, with plans to increase to 3-5pc by 2030, subject to global developments and wider SAF availability and adoption.

The Ministry of Trade, Industry and Energy and the Ministry of Land, Infrastructure and Transport announced the 'SAF Expansion Strategy' on 30 August, which includes a target for South Korea to capture 30pc of the global blended SAF export market.

While not explicitly stated in the statement, some South Korean refineries expect co-processed SAF to be allowed to meet the country's mandate, sources said.

This is important as the country already produces small quantities of SAF via co-processing at existing refining facilities, with three of South Korea's four domestic refineries planning to produce SAF through co-processing by the end of this year.

Key strategies

The ministries outlined three key strategies to achieve the SAF consumption target — gradual expansion of domestic SAF demand, ensuring a stable domestic supply capacity, and establishing a SAF-friendly legal and institutional environment.

Airlines can already refuel with SAF at Korean airports, making South Korea the 20th country to do so as part of their plan to increase domestic SAF demand. The country had tested six flights using 2-4pc imported blended SAF between South Korea and Los Angeles since August 2023.

An incentive system is being developed to encourage public and private adoption of SAF, with benefits such as preferential allocation of transport rights, reduced airport facility usage fees and the introduction of airline carbon mileage system for passengers and other benefits. A mid- to long-term roadmap for the gradual expansion of domestic SAF demand will be prepared in early 2025, the ministries said.

The country's strategy to secure stable domestic supply capabilities includes considering investment support for domestic SAF production such as tax credits.

South Korea's four domestic refineries already plan to invest 4 trillion won ($3bn) in renewable fuels, including SAF by 2030, the ministries said. The government estimates a Hydrotreated Esters and Fatty Acids (HEFA) SAF plant with a production capacity of up to 250,000 t/yr will require an investment of approximately W1 trillion.

The supply-side strategy also aims to ease regulations on waste recycling to increase the availability of domestic feedstocks for SAF production. Another strategy is to diversify feedstock and SAF production technology options, with pre-testing expected later this year. The government plans to explore alternative feedstock like microalgae and production pathways such as e-SAF, with a view to developing supply chains.

South Korea plans to establish a national standard, certification and testing method for SAF with preparation planned for December 2024.

By Deborah Sun

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02/04/25

Brazil SAF industry set to take off in 2027

Sao Paulo, 2 April (Argus) — Brazil's aviation industry is keeping an eye on sustainable aviation fuel (SAF) regulations as the domestic market awaits the kickoff of local production to comply with the planned blend mandate and with potential for exports. The fuels of the future law envisages raising biofuel mix standards to lower greenhouse gas (GHG) emissions in domestic flights over a 10-year period starting in 2027, as Brazil has committed to applying a 10pc SAF mandate by 2037. The country's efforts to implement a SAF mandate runs in tandem with the guidelines from UN's International Civil Aviation Organization (ICAO) Carbon Offsetting and Reduction Scheme for International Aviation (Corsia) program, which oversees GHG reduction in international flights. The program set up two phases until reduction targets are fully implemented, so airlines and producers adapt to changes efficiently. Airlines can voluntarily adhere between 2024-2026, followed by global compulsory targets from 2027-2035, prompting SAF usage or carbon credits compensation. The mandatory phase embraces all international flights, including those from and to non-voluntary countries, except for so-called underdeveloped countries and those with a low share of global air traffic flows. Brazil's SAF is a newborn industry that holds potential for feedstock supply , mostly for its traditional production pathways using soybean oil, corn and sugarcane ethanol, as well as widespread agricultural lands engaged in biomass production without practicing land-use change. Its variability also allows new projects to reuse degraded lands and existing agricultural assets to comply with International Civil Aviation Organization (ICAO) sustainability criteria related to land-use and soil health enhancement. SAF input in Brazil faces economic hurdles as high market volatility weighs on long-term investments, says A&M Infra's management consultant Filipe Bonaldo. But he also says that the political agenda will not hinder the energy transition as has happened in the US under President Donald Trump, since Brazil's economy is heavily based on agriculture its regulatory processes spur optimism. As an agricultural powerhouse, Brazil offers low-cost production and multiple sources to provide demand, both internally and offshore. Brazil is the third largest global exporter in agriculture and livestock markets, leading soy, orange juice and beef markets globally, according to agriculture and livestock confederation CAN. Debut in Rio Brazilian fuel distributor Vibra is the first to offer SAF in Brazil, before the blend mandate comes into effect. The company imported 550,000l (16,000bl) of SAF produced with used-cooking oil (UCO) from the port of Antwerp, in the Netherlands, in January. The biofuel is available for customers at Vibra's facility at the Rio de Janeiro international airport after a 10-month logistics plan was concluded. International Sustainability & Carbon Certification (ISCC) has secured all processes of the plan, from the supply chain of the product to distribution. Vibra operates in more than 90 airports in Brazil and accounts for 60pc of national aviation market share through its sector subsidiary BR Aviation, said executive vice-president of operations Marcelo Bragança. Why it took so long? The sector has long had doubts over the technical feasibility of admitting the use of biofuels in aviation , especially from a security point of view, said Anac's head of the environment and energy transition Marcela Anselmi. The agency, along with oil and biofuels regulator ANP, follow international regulations for SAF as it requires a physical and chemical resemblance to current fossil aviation fuels to ensure flight operations security. It is still not possible to use 100pc of SAF in aircraft motors, said Anselmi. There is a 50pc mix limit that inhibits worldwide adherence as there are technical restrictions yet to overcome. Recent engagement in the energy transition agenda is promoting biomass supply for aviation, as well as road and marine modalities, requiring new production pathways. For example, ATJ uses ethanol to convert it into SAF, which can be expensive to install and implies high capital expenditure. In a global context, Brazil stands in the vanguard of the SAF agenda as Europe and the US have only deployed legislation related to output and consumption over the past two years, Anselmi pointed out. Meanwhile, South America's planned SAF production capacity may reach 1.1mn l/yr in 2030, according to EPE. By João Curi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexico manufacturing extends contraction in March

02/04/25

Mexico manufacturing extends contraction in March

Mexico City, 2 April (Argus) — Mexico's manufacturing sector contracted for a 12th consecutive month in March, with production and employment both deepening their slides, according to a survey released today. The manufacturing purchasing managers' index (PMI) ticked up to 47.2 in March from 47.1 in February, but remained below the 50-point threshold between contraction and expansion, according to the latest PMI survey from the finance executive association IMEF. Manufacturing, which accounts for about a fifth of Mexico's economy, is led by the auto sector, contributing about 18pc of manufacturing GDP. Within the manufacturing PMI, the new orders index rose by 1.3 points to 45.3, still deep in contraction. Meanwhile, production fell by 0.6 points to 44.6. The employment index also declined 0.6 points to 46.4 in March, now in contraction for 14 consecutive months. Meanwhile, the non-manufacturing PMI — covering services and commerce — declined 0.8 points to 48.8 in March from 49.6 in February, holding in contraction for a fourth consecutive month. Within the non-manufacturing PMI, new orders fell 1.5 points to 48.2 and production declined 1 point to 47.5 with employment down a point as well in March to 47.5, as all three pushed deeper into contraction. In contrast, the inventories component rose 3.5 points to 50.6 into expansion territory in March. But this may be the result of company strategies to stockpile inventories ahead of US tariffs and the reciprocal measures Mexico is set to announce on 3 April, IMEF technical advisory board member Sergio Luna said. PMI data show that the economic stagnation that began in late 2024 persisted through March, with results from January and February pointing to a sharp slowdown in the first quarter, IMEF said. This follows annualized GDP growth of 0.5pc in the fourth quarter of 2024, slowing from 1.7pc in the third quarter, according to national statistics agency data. Luna said concerns over US tariffs continue to drive much of the uncertainty reflected in the PMI data. Internal factors — such as reduced government spending to contain the fiscal deficit and investor unease over judicial reforms passed last year — are also weighing on activity, Luna added. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

UK to sign remaining CfDs for first H2 round in May

02/04/25

UK to sign remaining CfDs for first H2 round in May

Birmingham, 2 April (Argus) — The UK hopes to sign long-awaited subsidy contracts with the remaining projects from its first hydrogen allocation round (HAR1) in May, minister of state for the department of energy security and net zero, Sarah Jones, said. The UK will also "very shortly" unveil a shortlist of projects selected for subsidies of a larger second round (HAR2), Jones said at the Hydrogen UK conference in Birmingham today. But the announcement will hardly satisfy UK developers who have been expecting the shortlist any day since late 2024 . The missing list was the top talking point among delegates at the event. The UK has signed 15-year contracts-for-difference (CfDs) with four of the 11 renewable hydrogen projects selected in HAR1 , according to the latest information from the Low Carbon Contracts Company (LCCC), the government-backed counterparty. Finalising the rest of the CfDs is long-overdue in the eyes of many developers because the UK first announced its winners in December 2023. The process was delayed by the general election last summer and concerns around the Climate Change Levy (CCL) charged on electricity supply, among other issues. The new government took a step towards assuaging concerns about the CCL last week which might allow more projects to sign contracts. But HAR1 developers have warned that signing a CfD does not guarantee they will build projects straight away, since there is hardly any penalty for signing the subsidy deal. Some still need to finalise deals for power supply, construction contracts and financing, meaning it could still take time for signatories to take their final investment decisions. The UK will also update its hydrogen strategy later this year, Jones said. "New evidence has emerged on cost, demand and expected operating patterns, and our understanding has evolved with time," including on "how we can expect the hydrogen economy to develop over time," Jones said. The statements could indicate that the Labour government might amend the 10GW clean hydrogen production target set by the previous administration for 2030, according to one industry participant. The Conservative government's 10GW goal from 2022 had included a sub-target for 6GW electrolytic production capacity. The government will also reconsider the role of hydrogen in making steel in the UK, Jones said. The idea of using hydrogen for steel appeared to have little future in the UK under the previous government as concepts from the UK's steel plants had made no tangible progress . By Aidan Lea Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

India's IOC cuts jet fuel prices by 6pc for April

02/04/25

India's IOC cuts jet fuel prices by 6pc for April

Mumbai, 2 April (Argus) — Indian state-controlled refiner IOC has reduced jet fuel prices by 6pc effective from 1 April. IOC cut prices in Mumbai, capital New Delhi, Kolkata and Chennai by 6pc from a month earlier. Prices vary from state to state depending on local taxes. Asian jet fuel margins — or Singapore jet fuel swaps against Dubai crude values — averaged $13.04/bl in March, down from $15.23/bl in February. India's jet fuel consumption stood at 203,100 b/d in March, up by 5pc on the year, provisional data from the oil ministry show. By Roshni Devi Jet fuel prices in India Rupees/kl City Apr-25 Mar-25 m-o-m % Delhi 89,441.18 95,311.72 -6 Kolkata 91,921.00 97,588.66 -6 Mumbai 83,575.42 89,070.03 -6 Chennai 92,503.80 98,567.90 -6 Source: IOC Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US oil, farm groups push EPA for steep biofuel mandate

01/04/25

US oil, farm groups push EPA for steep biofuel mandate

New York, 1 April (Argus) — The American Petroleum Institute and biofuel-supporting groups told Environmental Protection Agency (EPA) officials at a meeting today that the agency should sharply raise advanced biofuel blend mandates for 2026. The coalition told EPA that it supported a biomass-based diesel mandate next year of 5.25bn USG, up from 3.35bn USG this year, and a broader advanced biofuel mandate, including the cellulosic category, at 10bn Renewable Identification Number (RIN) credits, up from 7.33bn RINs this year, according to three different groups that attended the meeting. Both mandates would be record highs for the Renewable Fuel Standard (RFS) program. Soybean oil futures and RIN credit prices have risen sharply over the past week on optimism that oil and biofuel interests were working to coordinate volume mandate requests for consideration by President Donald Trump's administration. The coalition is also pushing the agency to set a total conventional volume requirement at 25bn RINs, which would keep an implied mandate for corn ethanol flat at 15bn USG. Ethanol groups had previously eyed a mandate even higher, but limits on the amount of ethanol that can be blended into gasoline make much more-stringent requirements a tough sell to oil refiners. The coalition provided no specific request for the cellulosic biofuel subcategory, where most credit generation comes from biogas. Credits in that category are more expensive, but price concerns have been less potent recently given an EPA proposal to lower previously set cellulosic obligations, signaling that future volume requirements can be cut, too. EPA is aiming to finalize new RFS volume mandates by the end of the year if not earlier, people familiar with the administration's thinking have said. EPA officials signaled at the meeting they were working urgently on the rulemaking. "The agency is intent on getting the RFS program back on the statutory timeline for issuing renewable volume obligation rules," EPA said, declining to comment further on its plans for the rule. The RFS program requires oil refiners and importers to blend biofuels into the conventional fuel supply or buy credits from those who do. Under the program's unique nesting structure, credits from blending lower-carbon biofuels can be used to meet obligations for other program categories. One gallon of corn ethanol generates 1 RIN, but more energy-dense fuels earn more RIN credits per gallon. Some disagreements persist While groups at the meeting were aligned around high-level mandates, how administration officials and courts treat small refinery requests for exemptions from RFS requirements could undercut those targets. Groups present were broadly aligned on asking EPA not to grant widespread exemptions, though there is still disagreement in the industry about how best to account for exempted volumes when deciding requirements for other refiners. Groups present at the meeting today included the American Petroleum Institute and representatives of biofuel producers and crop feedstock suppliers. Some groups that previously engaged with the coalition's efforts to project unity to the Trump administration were not present. And some groups more historically skeptical of the RFS and more supportive of small refinery exemptions — including the American Fuel and Petrochemical Manufacturers — have not been closely involved. Fuel marketer groups notably did not attend the meeting after a representative sparred with others in the coalition at an American Petroleum Institute meeting last month. Some retail groups, including the National Association of Convenience Stores and the National Association of Truck Stop Operators, instead sent a letter to EPA today arguing that the groups pushing steep volumes are discounting potential headwinds to the sector from new tax credit policy. Some of the groups advocating for higher biofuel volumes have pointed to high production capacity and feedstock availability, but have preferred to ignore thornier issues like tax credits, lobbyists say. "An overly aggressive increase in advanced biofuel blending mandates under the RFS will be punitive for American consumers" without extending a long-running $1/USG tax credit for biomass-based diesel blenders, the retailers' letter said. That incentive expired last year and was replaced by the Inflation Reduction Act's "45Z" credit, which offers subsidies to producers instead of blenders and throttles benefits based on carbon intensity. Generally lower credit values for biomass-based diesel — coupled with the US government's delays setting final regulations on qualifying for the credit — have spurred a sharp drop in biofuel production to start the year. Without a blenders credit, the RFS volume mandates pushed by some groups could increase retail diesel prices by 30¢/USG, the fuel marketers estimate, a potential political headache for a president that ran on curbing consumer costs. Other biofuel groups say that extending the credit would be an uphill battle this year, with some lawmakers and lobbyists instead focused on legislatively tweaking the 45Z incentive's rules to benefit crop feedstocks instead of reverting wholesale to the prior tax policy. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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