China’s once-notorious “gutter oil”, recycled from kitchen and drainage waste, has almost vanished from dining tables in recent years and now carries the nickname liquid gold. The substance has become a highly sought-after feedstock for producing clean energy, especially sustainable aviation fuel (SAF), with biofuel producers such as Hong Kong-based Ecoceres sourcing gutter oil across the Greater Bay Area. EcoCeres’ co-chairman, Alan Chan Ying-lung, witnessed how the restaurant waste transformed from a nationwide food safety concern into a valuable commodity. “I can recall that the gutter oil we collected was basically free 10 years ago, and authorities even offered subsidies [to collectors], but now the unit cost is even more expensive than fuel,” he said. Gutter oil is among a selection of feedstocks, such as animal fat and agricultural waste, that can be used to produce renewable jet fuel, an alternative that will reduce life-cycle carbon emissions by up to 80 per cent compared with conventional jet fuel. SAF, a “drop-in” substitute, can be safely blended with jet fuel and used in aircraft engines without modification, but the challenge is the price. The Hong Kong government has set a 2030 target for the use of SAF, but has yet to clarify who will pay for it. “Producers need confidence that demand will be there. Airlines need fuel that is available and affordable. Investors need clarity on the direction of policy. A well-designed policy can connect these needs,” the CEO of Hong Kong flag carrier Cathay Pacific Airways, Ronald Lam Siu-por, said at a clean jet fuel conference in September. A ‘cautious’ target The city government initially set a goal for SAF to account for between 1 and 2 per cent of all fuel consumed by flights departing from Hong Kong International Airport by 2030. But in the city’s first five-year plan released in September, Chief Executive John Lee Ka-chiu revised the target to 1 to 3 per cent. He also said the city would aim to develop an internationally competitive SAF value chain in the bay area. Niki Wang Yangwen, Asia-Pacific associate director of biofuels at S&P Global Energy, said Hong Kong’s aim was considered achievable, with Asian economies generally setting targets of 1 to 5 per cent for 2030. “From our conversations with the market, the general feeling is that 1 to 3 per cent is a fairly cautious target, and people do not have much concern about it,” she said of the city’s goal. Some industry players expected the city to be a trial site for mainland China to gauge market reactions and, if things worked out, gradually roll out similar measures, she explained. Hong Kong, like Singapore, is a key aviation hub in Asia, with a dominant home carrier and mostly international traffic, Wang said. Hong Kong’s airport is one of the busiest in the world, last year recording 61 million passenger trips and a sector-leading 5.07 million tonnes of cargo throughput. According to the Civil Aviation Department, the number of flights departing from Hong Kong, including cargo and passenger services, jumped by 8.6 per cent to 197,374 in 2025 from a year earlier, while the number in 2024 was 181,663, up by 31.6 per cent from 138,056 in 2023. In addition, 197,325 flights arrived in 2025, representing an 8.7 per cent increase from the previous year. Hong Kong is not alone in setting green fuel targets. Elsewhere, demand for SAF is being driven more by mandates than pledges by airlines. The International Civil Aviation Organisation has adopted a collective goal to cut global aviation emissions by 5 per cent by 2030 on the path to net zero by 2050. The European Union requires fuel suppliers at its airports to use SAF, starting at 2 per cent of overall fuel in 2025, rising to 6 per cent in 2030 and to 70 per cent by 2050. Singapore has confirmed a goal of SAF accounting for 1 per cent of overall fuel by 2027 and 3 to 5 per cent by 2030, subject to global developments and SAF availability, while other Asian countries, including Thailand, Japan and South Korea, have also set targets. How can Hong Kong achieve its goal? In its latest policy address, the government committed to studying a mandatory consumption mechanism, and launching targeted publicity and educational campaigns by 2028. It will also develop a local blending facility to mix neat SAF with conventional jet fuel into a ready-to-use supply to support uptake. Separately, Hong Kong Exchanges and Clearing’s Core Climate carbon marketplace will explore offering green energy and other environmental equity products to the market, including SAF certificates and green hydrogen certificates. In a reply to the South China Morning Post, the Transport and Logistics Bureau and the Environment and Ecology Bureau said the local blending facility was expected to begin operations by 2030. “This will complete an end-to-end regional value chain, streamline logistics and enhance SAF price competitiveness,” the bureaus said. As part of the broader value chain in the bay area, the government has also spearheaded the establishment of EcoCeres’ SAF production base in Dongguan, which will begin production by 2030, producing 450,000 tonnes of SAF and renewable diesel per year at full capacity. EcoCeres’ Chan said the company’s current production of about 770,000 to 800,000 tonnes, well above the 3 per cent requirement of around 200,000 tonnes, was manageable. “I also believe we will not be the sole supplier. There will be other suppliers in a fair market, so I don’t think there will be any pressure on the overall supply, even at 3 per cent or up to 10 per cent,” he said. EcoCeres, a clean energy unicorn backed by the family office of Henderson Land Development co-chairman Peter Lee Ka-kit, is the world’s second-biggest producer of SAF, after Finland’s Neste. Chan said the supply chain was end-to-end, with Dongguan as its starting point. Used cooking oil is collected from nearby bay area cities and pre-processed in the area, while Hong Kong handles blending, research and development, and financing. Who pays the extra cost? Chan said the government should have a longer-term plan beyond 2030 and provide details of its mandatory mechanism, noting that the EU had set goals for 2050. Merlin Lao Man-chi, the head of policy and research at the Business Environment Council, said the government’s mandatory mechanism was crucial, as it would determine market confidence and who would ultimately bear the cost. “It is important to determine the cost allocation and who will be in charge of the cost as it could scale up the whole industry,” he said. According to the International Air Transport Association (IATA), global SAF production is expected to reach 2.4 million tonnes in 2026, representing just 0.8 per cent of aviation fuel use, at a cost of US$4.3 billion to airlines. The South China Morning Post contacted four Hong Kong-based airlines – Cathay, its budget arm HK Express, Hong Kong Airlines and Greater Bay Airlines – but none offered any comment. Singapore introduced the world’s first green levy, with passengers bearing the cost, while the EU holds suppliers responsible through penalties. Lao said the government should offer short-term subsidies, but it would also need to determine how to allocate costs in the longer run. He said the levy mechanism in Singapore helped encourage acceptance among consumers, but such a move would be “a long shot” in Hong Kong and the government would need to work to garner broad public support. Lao used Hong Kong’s ill-fated waste-charging scheme in 2024 as an example. Officials and lawmakers initially had good thoughts initially and all agreed on the proposal. But when it came to implementation, residents opposed the measure and the scheme was eventually scrapped. Asked whether imposing a levy would threaten the city’s status as an international aviation hub, Lao said the fee could be imposed only on passengers or cargo departing from Hong Kong, not those in transit. Hong Kong’s airport