Lee Young-chul, left, senior vice president of the marketing department at SK Energy, shakes hands with Alex McGowan, chief operations and service delivery officer at Cathay Pacific Airways, after signing a SAF supply deal at the Hong Kong flag carrier's headquarters in Hong Kong, March 10. Yonhap

SK Energy, a refining arm of SK Group, said Tuesday it has signed a deal to supply renewable aviation fuel to Cathay Pacific Airways.

SK Energy will provide more than 20,000 tons of sustainable aviation fuel (SAF) to the Hong Kong flag carrier by 2027, the company said in a press release.

Cathay Pacific already began to use a mix of SAF produced by SK Energy in all of its planes that depart from Korea's Incheon International Airport in Korea in November, it said.

SK Energy shipped the country's first batch of SAF to Europe in January. SAF is produced through a co-processing production method using bio-based materials, including waste cooking oil and animal fat.

The European Union requires all aircraft departing from the region to mix at least 2 percent SAF in their fuel starting this year.

The ratio is set to rise to 6 percent from 2030 and 70 percent from 2050 in the EU. The United States aims to replace all existing jet fuel with SAF by 2050, the release said.

The global SAF market is expected to sharply grow to 108.96 trillion won ($74.6 billion) in 2034 from 2.5 trillion won last year, according to market tracker Global Market Insight.

SK Energy began commercial production of SAF in September, with an aim of making a presence in the global SAF market.

The Korean government made it obligatory for all international flights departing from the country to start using a 1 percent blend of SAF in 2027. (Yonhap)