Malaysia potential site for Cathay-Airbus US$70 million SAF co-investment project

KUALA LUMPUR: Malaysia has the potential to be one of the locations in Southeast Asia for Cathay Group and Airbus's newly-announced RM296 million (US$70 million) co-investment projects in the development of sustainable aviation fuel (SAF).

Cathay Pacific general manager of sustainability Grace Cheung said the airline sees Malaysia and other countries in the region and globally as part of its potential project areas.

"Malaysia and also many countries in the region are all part of where we have potential projects…The partnership that we have with Airbus definitely focuses on SAF development in the Asia region."

"So, not only limited to Hong Kong, not only limited to Asia but globally," she said after the signing ceremony between Cathay Group and Airbus on a joint investment agreement to accelerate the development of SAF production in Asia and globally.

The agreement, signed by Cathay chief operations and service delivery officer, Alex McGowan and Airbus president Asia Pacific, Anand Stanley, was announced on the sidelines of the International Air Transport Association (IATA) World Sustainability Symposium yesterday.

The partnership entails that the two companies will jointly invest up to US$70 million to identify, evaluate and invest in projects that support the scaling of SAF production towards 2030 and beyond.

The projects will be assessed based on their commercial viability, technological maturity, and potential long-term offtake.

Cheung said while Cathay remains committed to scaling up the use of SAF, the high cost compared to conventional jet fuel continues to be a major barrier.

She said addressing the challenge will require collaboration across the aviation ecosystem, involving policymakers, producers and industry partners to develop viable solutions.

Cathay chief operations and service delivery officer Alex McGowan said the co-investment agreement reflects the airline's strong commitment to building a scalable SAF industry.

"SAF remains the most important lever for Cathay and the wider aviation industry to drive our common decarbonisation goals.

"It complements our broader strategy of investing in the technologies and production capacity that can transform the industry in the long run, including our participation in the recently launched oneworld BEV SAF Fund," he said at the ceremony.

The oneworld BEV SAF Fund is a joint initiative between Cathay, a launch investor, with other oneworld airlines members and Breakthrough Energy Ventures, the climate investment firm founded by Bill Gates.

The fund focuses on novel, next-generation SAF technologies with the potential to scale significantly and reduce costs.

Meanwhile, Stanley said Asia holds immense potential for SAF development with about 40 per cent of the world's feedstock resources located in the region.

"It's clear that airlines such as Cathay and aircraft manufacturers such as Airbus are not in the business of energy production, but we can, and we should act as catalysts for the profound changes that are required."

"And I'm proud to say that this is what we're doing with Cathay with the jointly funded program that will be used to identify projects in Asia and globally that can accelerate and deliver cost effective SAF using sustainable biomass and feedstock, and the creation of a SAF industry at a scale that will have powerful economic impacts," he said.