"Last week, I attended an international conference in Europe, where sustainable aviation fuel (SAF) emerged as a prominent topic across ten forums, underscoring the significant interest in this sector," said Yang Lei, Vice Dean of the Institute of Energy at Peking University. He made these remarks while attending the Sichuan Sustainable Aviation Fuel Industry International Cooperation Matching Event in Chengdu on March 19.
This enthusiasm, which originated in Europe, is now resonating strongly in Sichuan, as demonstrated by the scale of the matching event. Co-organized by the U.S.-China Business Council (USCBC), the China Petroleum and Chemical Industry Federation, and the Sichuan Provincial Bureau of Economic Cooperation, the event has attracted representatives from national government departments as well as leaders from dozens of top enterprises in China and abroad.
The primary goal of this matching event is to tap into the potential for industry development and attract a wave of foreign enterprises and high-quality foreign-invested projects to Sichuan. With the USCBC spearheading numerous foreign enterprises to engage in collaborative negotiations in Sichuan, will this initiative ignite further cooperation opportunities?
Global SAF Industry
Entering Phase of Scaling Application and Accelerated Commercialization
In the context of China's "dual carbon" goals, the aviation industry is under increasing pressure to reduce its carbon footprint. SAF, produced from renewable resources or waste materials, offers significant emission reduction benefits throughout its entire lifecycle. Currently, the SAF industry in major global markets has entered a phase of scaling application and accelerated commercialization. Commercial-scale production plants have already been constructed or are undergoing expansion in multiple locations worldwide. Projections suggest that by 2030, the total demand for SAF in the United States, Europe and Asia will surge from the current 400,000 tons per year to 18 million tons per year. By 2050, this demand is expected to grow even further, exceeding 100 million tons per year.
"The Chinese SAF market and its industrial chain are in the early stages of development, urgently requiring the establishment of sustainable commercial application models," explained Yang Lei. In September of last year, China initiated a SAF application pilot program, involving major airlines such as Air China, China Eastern Airlines, and China Southern Airlines, as well as key airports including Beijing Daxing International Airport, Chengdu Shuangliu International Airport, Zhengzhou Xinzheng International Airport, and Ningbo Lishe International Airport. Yang added that this year, the scope of the pilot program will be further expanded.
Sean Stein, President of the USCBC, noted that the United States is a global trailblazer in technological research and development, testing production, and innovative practices in the field of SAF, and China offers vast market size, substantial financial investment, and ambitious sustainable development goals. Together, these complementary advantages create significant potential for cooperation between the two countries in this sector.
Forming a Complete Closed Loop
Sichuan Possessing First-Mover Advantages in the SAF Industry
From airlines and fuel producers to policymakers and scientific researchers, the list of participants at this matching event spans nearly every stakeholder across the entire SAF value chain. The discussions focused on highly specific topics, such as formulating international standards, mutual learning and collaboration between technology and the market, and establishing smooth and efficient systems and mechanisms among enterprises for sharing and utilizing experiences.
This year, Sichuan Tianzhou Biomass Energy Technology Co., Ltd. will commence operation of the first phase of its bio-jet fuel refining plant, which it invested in and constructed in Weiyuan, Neijiang, taking the lead in achieving an annual production capacity of 200,000 tons of bio-jet fuel. Simultaneously, leveraging the SAF application pilot program at Chengdu Shuangliu International Airport, the company will directly supply its bio-jet fuel to domestic airlines.
"Due to Sichuan's culinary preference for oily and spicy foods, a substantial amount of kitchen waste oil is generated. As a raw material for SAF, this waste oil offers significant advantages in both quantity and quality within the industry," explained Chen Yu, General Manager of Sichuan Tianzhou International Trade Co., Ltd., during his presentation to American counterparts at the matching event. Moreover, the Sustainable Aviation Fuel Development Research Center of The Second Research Institute of CAAC has been established in Sichuan, which will help Sichuan pioneer in developing industry standards. "In Sichuan, the standards, raw materials, production and application have formed a complete closed loop, granting the province a first-mover advantage in the SAF industry. This is also a key reason why numerous leading foreign enterprises have chosen to gather here," said Chen Yu.
Foreign enterprises are moving more swiftly. Several years ago, Honeywell applied its advanced technologies to the product development and production processes of Sichuan Jinshang Environmental Protection Technology Co., Ltd. Last year, the company further supported Jinshang Environmental Protection in establishing a SAF industrial base in Suining, Sichuan, with an annual production capacity of 500,000 tons. Once completed, this project will become one of the largest SAF initiatives in the western region.
Urgent Pain Points to Be Addressed
Raw Material Supply Struggling to Keep Pace with Surging Production Demand
However, despite being in the early stages of development, the industry still confronts several pain points that require immediate attention. At this matching event, experts, scholars, and enterprises share the same view that the current cost of SAF raw materials remains high, driven by supply and demand dynamics. Particularly in the SAF production sector, the selling price of kitchen waste oil—a key raw material—has inverted, even exceeding the price of edible oil.
"On the one hand, the bio-jet fuel market is vast, and raw material supply struggles to meet production demands. On the other hand, there is a lack of standardized models for raw material collection, transportation, processing and trading," believes Yang Zhiyuan, Director of the Sustainable Aviation Fuel Development Research Center of The Second Research Institute of CAAC.
"Sichuan generates a substantial amount of kitchen waste oil annually, providing a critical raw material foundation for the development of the SAF industry. We look forward to Sichuan further capitalizing on its raw material supply advantages by establishing a standardized collection and transportation system to reduce costs. Additionally, we hope Sichuan will create a dedicated fund to support carbon emission reduction certification and actively collaborate with internationally advanced technology enterprises, positioning itself as a major player in the global SAF industry," stated Yu Feng, President of Honeywell China.
This year's government work report emphasizes accelerating the development of a green and low-carbon economy. For SAF, this signals China's commitment to making greater efforts to foster this industry. Yu Jian, President of the Civil Aviation Management Insitute of China, believes that global cooperation in the aviation carbon market is crucial, highlighting that "This cooperation matching event is both timely and important."
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