- China will unveil this year its policy on sustainable aviation fuel (SAF) use for 2030.
- Last year, China exported a record 2.05 million tons of UCO, mostly to the United States and Singapore.
China is the world’s second-largest aviation market, with about 11 per cent of global jet fuel use. Industry executives have said that in 2030, It will unveil its policy on sustainable aviation fuel (SAF) use that could spur billions of dollars of investment.
This has led biofuel firms to pour more than $1 billion into building China’s first plants to turn waste cooking oil into aviation fuel for export and meet domestic demand once Beijing mandates the fuel’s use on aeroplanes to cut emissions.
Companies such as Junheng Industry Group Biotech, Zhejiang Jiaao Enprotech, and Tianzhou New Energy plan to start up plants over the next 18 months to produce more than one million metric tons per year (tpy) of SAF combined.
That figure would be equivalent to 2.5 per cent of China’s current annual demand for aviation fuel.
When online, company executives said the project would absorb supplies of used cooking oil (UCO) feedstock that China currently ships as the world’s largest exporter.
Last year, China exported a record 2.05 million tons of UCO, mostly to the United States and Singapore, which provided feedstock to biofuel refiners such as the Finnish firm Neste.
The plants process UCO collected from millions of restaurants using hydrotreated esters and fatty acids (HEFA), one of a few commercial pathways.
Although the process faces feedstock constraints in the long run, state utilities such as State Power Investment Corp may become the next wave of investors betting on a newer but costlier technology for converting to aviation fuel.
China now produces less than 100,000 tons of SAF, mainly at a plant operated by Bain Capital-backed EcoCeres, which began making the fuel in 2022 in the eastern region for export.
Industry executives familiar with policy discussions, who spoke anonymously, said the companies preparing to make SAF expect a mandatory blend of 2 per cent to 5 per cent of SAF into an aviation fuel market forecast to reach 50 million tons in 2030.
In the near term, China may unveil pilot airports in cities such as Beijing, Shanghai, Chengdu and Zhengzhou for initial SAF adoption.
The executives said a 5 per cent mandate would equate to 2.5 million tons of SAF use in China by 2030. This is modest compared to the European Union’s target of 6 per cent and Japan’s 10 per cent, but it is a jump from the 50,000-ton SAF target for 2025 Beijing outlined a few years ago.
“Once the market demand and policy become clearer, the sector will grow quickly, which can drive down the cost,” said Ye Bin, chairman of Jinshang Environmental Protection Technology Co Ltd. The company will start building a 400,000-tpy facility in July in Sichuan.