Why Two Korean Giants Just Bet Big on US Wood Waste

Two major South Korean companies just made a bold bet on American sustainable aviation fuel. Korean Air and Samsung E&A signed a memorandum of understanding on November 20, 2025, to explore production opportunities across the United States. Their focus on second-generation SAF technology puts them ahead of the curve as commercial aviation races toward net-zero targets.

The partnership brings together an airline desperate for cleaner fuel and an engineering giant with deep pockets and technical know-how. Korean Air will anchor demand as an offtaker, while Samsung E&A handles the heavy lifting of plant construction and technology deployment. Both companies picked the US for good reason: abundant feedstock, advanced infrastructure, and favorable policy winds.

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Why the US Market Makes Sense

The United States isn't just Korean Air's second-largest fuel procurement market after South Korea. It's also where the real action is happening in sustainable aviation fuel production. From December 2024 to February 2025, US SAF output nearly doubled, climbing from 22,000 to 44,000 barrels per day as new facilities came online.

Korean Air operates 91 weekly flights to the US, capturing a 40.3% market share on routes between the two countries. That's serious volume, and it needs to be fueled. Right now, the airline has zero active SAF offtake agreements in the US despite its massive presence there.

The Technology Behind the Plan

Samsung E&A is reviewing participation in second-generation SAF projects that use gasification-Fischer-Tropsch technology. This process converts woody waste into synthetic liquid fuel by gasifying biomass at high temperatures, then converting it back into usable jet fuel. The result is a fuel that can drop directly into existing aircraft without modifications.

What makes this approach different from first-generation SAF? First-gen relies on limited feedstocks like used cooking oil and animal fats. Those sources are already tapped out, and demand far exceeds supply. Second-generation SAF opens up a much wider feedstock base including forest residues, agricultural waste, and other non-edible biomass that's plentiful across North America.

Samsung E&A isn't flying solo on this technology. The company is part of the SAF Technology Alliance formed in June 2025 with Honeywell, Johnson Matthey, and GIDARA Energy. That alliance brings together expertise across the entire production chain, from feedstock conversion to final fuel synthesis.

Four Pillars of Collaboration

The MOU lays out a clear roadmap for how these companies will work together. It's structured around four main areas that cover the entire SAF value chain from identification through commercial deployment.

1. Project Identification and Evaluation

Samsung E&A and Korean Air will scan for overseas SAF production opportunities, with the US as their initial hunting ground. Samsung brings engineering and construction expertise from decades building complex plants worldwide. Korean Air contributes market knowledge and operational insight from running one of Asia's largest airline networks.

2. Long-Term Offtake Arrangements

Korean Air is positioning itself as a committed offtaker, guaranteeing purchase volumes over fixed periods. This role is critical for de-risking new SAF projects and attracting financing. Major global carriers including Delta, Air France, United Airlines, and American Airlines have used similar strategies to support production capacity buildout.

3. Technology and Project Investments

Both companies will explore direct investments in SAF-related technologies and production facilities. Samsung E&A's participation in the SAF Technology Alliance gives it access to proven gasification and Fischer-Tropsch processes that can reduce project timelines by more than 15% and cut capital costs by up to 10%.

4. Alliance Participation

Korean Air will join Samsung E&A's broader SAF Technology Alliance as a partner. This gives the airline direct input into technology development and project selection while strengthening the alliance's demand-side credibility with investors and regulators.

What Sets Second-Generation SAF Apart

The aviation industry has been stuck on first-generation SAF for years, constrained by feedstock availability. Used cooking oil, animal fats, and waste oils can only scale so far before running into supply bottlenecks. The International Energy Agency projects that biofuels from waste and non-food energy crops will need to meet more than 40% of total biofuel demand by 2030.

Second-generation SAF breaks through those limits. By processing forest residues, agricultural waste, and municipal solid waste, producers can tap into feedstock sources that are both abundant and sustainable. The technology can handle non-edible biomass that would otherwise be burned or left to decompose, capturing value while avoiding food-versus-fuel conflicts.

The carbon reduction benefits are substantial too. Fischer-Tropsch-based SAF can deliver significantly greater carbon-reduction benefits compared to first-generation alternatives. When paired with sustainable forestry practices and efficient logistics, the lifecycle emissions can drop by up to 80% compared to conventional jet fuel.

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Korean Air's Sustainability Track Record

This partnership builds on Korean Air's existing sustainability initiatives. The carrier became the first Korean airline to operate a SAF-blended flight back in 2017 on the Chicago-Incheon route. In 2024, Korean Air expanded its use of domestically produced SAF for flights departing from both Incheon and Gimpo International Airports.

Currently, Korean Air uses a 1% SAF blend on flights from Incheon to Kobe and Gimpo to Osaka. That covers roughly 90 flights on the Kobe route and 26 flights on the Osaka route through December 2026. The fuel comes from domestic suppliers and is produced from used cooking oil, a first-generation feedstock.

The US partnership signals a strategic shift toward securing second-generation SAF supply ahead of tightening mandates. The European Union already requires airlines to use increasing percentages of SAF on flights departing from EU airports. Similar regulations are coming in Asia and North America, making long-term offtake agreements critical for operational planning.

Samsung E&A's Energy Transition Play

For Samsung E&A, this deal fits squarely into its broader energy transition strategy. The company has been aggressively building capabilities in hydrogen production, carbon capture and blue ammonia, and now sustainable fuels. In October 2025, Samsung E&A secured a $475 million contract to build a low-carbon ammonia plant in Indiana that will capture 1.67 million tons of CO2 annually.

The SAF Technology Alliance formed in June 2025 gives Samsung E&A a competitive edge in bidding for SAF projects globally. By offering clients a fully integrated solution from feasibility studies through commissioning, Samsung E&A can reduce project risk and accelerate timelines. That's exactly what airlines and fuel producers need as they race to meet net-zero commitments.

The partnership also aligns with South Korea's national industrial strategy. The government has identified energy transition as one of six priority sectors for growth, alongside AI, biotech, culture, defense, and advanced manufacturing. Korean companies that can capture market share in clean energy infrastructure stand to benefit from government support and export credit.

The Road to 2030 and Beyond

Large-scale commercial production of Fischer-Tropsch SAF isn't expected until after 2030, according to Korean Air. That timeline reflects the lead time required for engineering, permitting, construction, and commissioning of complex chemical plants. It also accounts for the need to secure long-term feedstock supply agreements and navigate evolving regulatory frameworks.

What happens between now and 2030? Samsung E&A will continue its front-end engineering design work on US-based projects. Korean Air will finalize its offtake commitments and potentially invest directly in production facilities. Both companies will work through the SAF Technology Alliance to refine processes and reduce costs.

The US market dynamics favor early movers. The Inflation Reduction Act's 45Z Clean Fuel Production Tax Credit offers 35 cents per gallon of SAF produced, providing crucial revenue support during the scale-up phase. States across the Midwest and South are competing to attract SAF production facilities with additional incentives, seeing them as drivers of rural economic development.

For Korean Air, securing US-based SAF supply offers strategic advantages beyond emissions compliance. The airline's extensive North American network means it can fuel up with domestically produced SAF at competitive prices rather than importing expensive fuel or paying carbon offset fees. That operational flexibility will matter more as regulations tighten and SAF production scales across multiple continents.

A Model for International Clean Energy Partnerships

This partnership represents more than just a fuel supply deal. It's a template for how international companies can collaborate on energy transition infrastructure. Korean Air brings guaranteed demand and operational expertise. Samsung E&A provides engineering capabilities and technology access. American suppliers contribute feedstock and local knowledge. Technology partners like Honeywell and Johnson Matthey offer proven processes.

The result is a value chain that spreads risk, combines complementary strengths, and accelerates deployment timelines. Other airlines and engineering firms are watching closely. If this model works, expect to see similar partnerships emerge across Asia, Europe, and the Americas as the aviation industry races toward net-zero.

The International Air Transport Association estimates that SAF must account for 65% of the emissions reductions needed for aviation to hit net-zero by 2050. That translates to roughly 120 billion gallons of SAF per year, compared to just 75 million gallons produced globally in 2022. Closing that gap will require massive investment in production capacity, feedstock infrastructure, and technology deployment.

Korean Air and Samsung E&A are positioning themselves to capture a meaningful share of that growth. Their focus on second-generation technology, strategic US market entry, and strong technology partnerships give them advantages as the industry transitions. Whether they can execute on these plans and deliver commercial-scale production post-2030 remains to be seen. But the groundwork is being laid now, and the stakes couldn't be higher for both companies and the planet.