Hong Kong should be able to find sufficient sustainable aviation fuel (SAF) in the region to meet its short-term needs, but the government must exercise care in setting usage targets and regulating infrastructure facilities, according to speakers at a sustainable aviation forum.
The city, which has committed to setting an SAF usage target for flights departing from Hong Kong’s airport within this year, can learn from the experiences of other markets that have already implemented such mandates, said experts at the event in the city on Friday. Starting on January 1, suppliers in both the European Union and the UK were mandated to deliver fuel containing at least 2 per cent SAF.
Airlines have flagged alleged price gouging by dominant fuel suppliers at some European airports as a particular concern, said Grace Cheung, general manager of sustainability at Hong Kong’s flagship carrier Cathay Pacific Airways.
“What we and our peers have found with this mandate is that the suppliers have just imposed the cost burden of the SAF mandate onto the airlines, which do not have much choice,” she said. “In most European countries, the jet-fuel market is dominated by a few players. They don’t have the open-access, competitive fuel-supply system we have in Hong Kong. We started to see some price-gouging activities.”
In addition, the European regulation did not provide clear procedures for quality assurance on the carbon-reduction benefits of the SAF sold, she added.
“A lot of paper trail is behind the SAF supply chain, but there is a lack of mention of how this is regulated in Europe,” Cheung said. “So airlines have to pick up the bill, but the environmental benefits are not passed to us by the assurance agencies.”
In Hong Kong, the fuel infrastructure – such as pipelines – is regulated so that the system is open to all suppliers that share the cost of using it, said Peter Lee, general manager of sustainability at Airport Authority Hong Kong. The operator does not charge carriers additional mark-up beyond the profit it is allowed to earn for running the facilities, he added.
