{"id":7427,"date":"2025-06-13T16:43:50","date_gmt":"2025-06-13T15:43:50","guid":{"rendered":"https:\/\/www.greenairnews.com\/?p=7427"},"modified":"2025-08-22T09:03:31","modified_gmt":"2025-08-22T08:03:31","slug":"commentary-chinas-saf-industry-poised-to-be-a-transformative-force-in-aviations-low-carbon-future","status":"publish","type":"post","link":"https:\/\/www.greenairnews.com\/?p=7427","title":{"rendered":"COMMENTARY: China\u2019s SAF industry poised to be a transformative force in aviation\u2019s low-carbon future"},"content":{"rendered":"\n

As the world\u2019s second-largest aviation market, China is accelerating its research, production and adoption of sustainable aviation fuel (SAF) to meet its carbon peak and neutrality goals. While policy frameworks are steadily improving and SAF production capacity has reached 3.32 million tonnes per year, commercial deployment and refuelling remain nascent. Additionally, feedstock availability, certification systems and economic viability pose significant challenges to industry expansion. To commercialise SAF, achieving price parity is essential, necessitating supply chain optimisation, financial incentives, and policy interventions to ensure long-term feasibility. Looking ahead, China\u2019s SAF strategy must extend beyond HEFA technology, advancing synthetic fuel (PtL), carbon capture utilisation and storage (CCUS), and hydrogen integration to enhance its role in national energy transition. On the international front, China can leverage the book-and-claim mechanism to embed SAF within global supply chains and commodity markets, strengthening its global competitiveness. With policy reforms, market-driven frameworks and technological innovation, China\u2019s SAF industry is positioned to become a key driver of global aviation decarbonisation, writes David Ma<\/em>.<\/strong><\/p>\n\n\n\n

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China, as a Category I Council Member of the International Civil Aviation Organization (ICAO) and the second-largest aviation market, is rapidly advancing the research, production and deployment of SAF to achieve its carbon peak and carbon neutrality goals, while meeting the industry\u2019s sustainability requirements. In recent years, China has made significant breakthroughs in SAF technology development, large-scale production and airworthiness certification, gradually establishing itself as a global leader in SAF and laying a solid foundation for its commercial adoption.<\/p>\n\n\n\n

China\u2019s policy framework for SAF remains in its early stages but has demonstrated a pragmatic and steady progression. The Civil Aviation Administration of China (CAAC) has issued a series of directives aimed at supporting SAF adoption.<\/p>\n\n\n\n

In 2022, the 14th Five-Year Plan for Green Civil Aviation Development established the non-mandatory goal of consuming 20,000 tonnes of SAF annually by 2025, with an accumulated usage target of 50,000 tonnes. This marked China\u2019s first quantitative target for SAF, a significant milestone for the domestic aviation sector. In July 2023, CAAC released the Sustainability Requirements for Alternative Aviation Fuels (Draft for Public Consultation), aiming to develop a nationally tailored certification standard that aligns with international practices. In August 2023, SAF was included in the Green Low-Carbon Advanced Technology Demonstration Programme, jointly launched by the National Development and Reform Commission (NDRC) and CAAC, along with eight other central government agencies.<\/p>\n\n\n\n

In October 2023, CAAC, in collaboration with the Ministry of Industry and Information Technology, Ministry of Science and Technology, and Ministry of Finance, issued the Green Aviation Manufacturing Development Outline (2023-2035). This directive highlighted the commitment to integrating SAF into China\u2019s domestic aircraft industry, stating that by 2025, domestically produced aircraft would undertake SAF demonstration flights, with phased trials of various SAF blending ratios. Additionally, the directive called for the development of SAF-related standards, certification frameworks and airworthiness validation.<\/p>\n\n\n\n

China\u2019s SAF development entered a new phase in July 2024 with the establishment of the Sustainable Aviation Fuel Research Centre under CAAC\u2019s Second Research Institute. This centre is tasked with formulating SAF product standards, enhancing quality assurance mechanisms, and advancing sustainability evaluation methodologies to facilitate the creation of China\u2019s independent SAF certification system (CSCS).<\/p>\n\n\n\n

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SAF production capacity and market expansion<\/strong><\/p>\n\n\n\n

China\u2019s SAF production capacity primarily utilises the HEFA (Hydroprocessed Esters and Fatty Acids) pathway, with its operational and planned production capacity reaching 3.32 million tonnes per year (t\/y). Currently, six companies have commenced SAF production, with a total output of 870,000 tonnes annually:<\/p>\n\n\n\n

\u2022 Sinopec Zhenhai Refining \u2013 100,000 t\/y
\u2022 Junheng Group \u2013 200,000 t\/y
\u2022 Ecotech Environmental \u2013 50,000 t\/y
\u2022 Haixin Energy \u2013 50,000 t\/y
\u2022 Jia’ao Lianyungang \u2013 370,000 t\/y
\u2022 Pengyao Environmental \u2013 100,000 t\/y<\/p>\n\n\n\n

Four of these companies have obtained airworthiness certification from CAAC, while an additional 2.45 million tonnes per year are under construction or planning.<\/p>\n\n\n\n

According to China Civil Aviation Network, China\u2019s total aviation fuel consumption in 2024 amounted to 38.2 million tonnes. Deloitte estimates that if China’s SAF adoption aligns with IATA\u2019s target of 5.2% usage, SAF demand could reach 3 million tonnes per year by 2030. Projections from CAAC\u2019s think tank, Civil Aviation University of China, suggest a 10% blending scenario, leading to 4 million tonnes of SAF demand, whereas SkyNRG and ICF forecast a 15% blending scenario, requiring 7.2 million tonnes of SAF supply. Based on existing and upcoming capacity expansions, China\u2019s SAF industry is positioned to meet 2030 demand.<\/p>\n\n\n\n

Looking beyond 2030, China\u2019s SAF blending ratio is expected to rise significantly. The Civil Aviation University forecasts blending rates of 25% by 2040, 50% by 2050, and 65% by 2060, translating into SAF demand of 7.12, 12.24, and 18.75 million tonnes per year, respectively. Deloitte\u2019s research suggests that if all potential feedstock is converted into SAF, China\u2019s theoretical SAF supply could exceed 19 million tonnes per year by 2030, far surpassing projected domestic demand. With government incentives such as tax reductions and subsidies expected to intensify toward the 2060 carbon neutrality deadline, corporate investment in SAF production is anticipated to grow exponentially.<\/p>\n\n\n\n

On 18 September 2024, the NDRC and CAAC launched a SAF pilot programme, aimed at testing fuel supply security, quality assurance, certification and infrastructure readiness. This programme consists of two phases:<\/p>\n\n\n\n

\u2022 Phase 1 (September\u2013December 2024): SAF refuelling trials on 12 flights operated by Air China, China Eastern Airlines, and China Southern Airlines, departing from Beijing Daxing, Chengdu Shuangliu, Zhengzhou Xinzheng and Ningbo Lishe airports.
\u2022 Phase 2 (2025 full-year expansion): Increased participation from more airlines and airports.<\/p>\n\n\n\n

By March 2025, all domestic flights departing from these four airports will include 1% SAF blending, marking China\u2019s first step toward standard SAF refuelling operations. Although current deployments remain limited to specific flights and minimal blending ratios, these trials will serve as a technical validation stage for broader market adoption between 2026 and 2030.<\/p>\n\n\n\n

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Structural constraints on SAF commercialisation<\/strong><\/p>\n\n\n\n

China\u2019s sustainable aviation fuel industry primarily relies on hydroprocessed esters and fatty acids (HEFA) technology, which is well-established. However, feedstock supply \u2013 particularly waste-based lipids such as used cooking oil (UCO) \u2013 remains a critical limitation, posing significant challenges to raw material availability.<\/p>\n\n\n\n

According to China Research Network, the country’s annual food waste volume reached approximately 120 million tonnes in 2020 and is expected to increase to 170 million tonnes by 2025, approaching saturation. Given a 4.5% oil extraction rate, this translates to 5.4 million tonnes of UCO feedstock potentially available for SAF production. With the 78% conversion rate reported at Sinopec Zhenhai Refinery, 5.4 million tonnes of UCO could yield 4.2 million tonnes of SAF. However, this falls far short of future industry demand and a substantial supply gap is anticipated beyond 2030.<\/p>\n\n\n\n

Moreover, SAF competes with biodiesel, which shares a similar feedstock base, as biodiesel adoption expands in road transport and shipping sectors. China\u2019s existing and planned SAF production capacity has reached 3.32 million tonnes per year, meaning that even if all UCO resources were dedicated to SAF, only 900,000 tonnes of additional SAF production capacity would remain available \u2013 an insufficient margin for long-term growth. These constraints necessitate alternative technology pathways to ensure stable SAF production beyond 2030.<\/p>\n\n\n\n

In addition, China\u2019s UCO collection system remains fragmented, dominated by independent traders, limiting scalability and increasing inefficiencies. Statistics indicate that over 80% of UCO supply is controlled by individual operators, leading to unstable sourcing, dispersed collection networks and elevated transportation costs.<\/p>\n\n\n\n

Recognising these challenges, the Chinese government has introduced policy measures to improve domestic UCO availability. On 15 November 2024, the Ministry of Finance and the State Administration of Taxation issued a policy removing export tax rebates for chemically modified animal, plant and microbial oils and fats (including their derivatives and non-edible oil products formulated from mixtures within this category), thereby increasing domestic feedstock retention rates. Additionally, the elimination of the 13% VAT on UCO is expected to redirect more feedstock into the domestic SAF supply chain, enhancing production stability. Despite these advancements, further optimisation of the collection network and standardisation of industry practices are necessary to achieve large-scale SAF adoption.<\/p>\n\n\n\n

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Certification and regulatory challenges<\/strong><\/p>\n\n\n\n

China\u2019s SAF certification framework remains in development, with quality certification and sustainability certification as the two core pillars. As global demand for green aviation fuels grows, more stringent certification standards are expected to emerge, ensuring both fuel safety and environmental integrity.<\/p>\n\n\n\n

For quality certification, international SAF standards are primarily governed by the American Society for Testing and Materials (ASTM), specifically ASTM D7566, which defines the chemical properties and blending limits for SAF to ensure safe integration into aviation engines. In China, SAF producers must submit an airworthiness approval application to CAAC, which currently adopts GB6537-2018 as the national reference standard for aviation fuel certification. However, the certification process remains lengthy and stringent, with only four companies currently holding CAAC airworthiness certification, covering 720,000 tonnes per year of certified SAF capacity. Future efforts must focus on streamlining approval processes and shortening certification timeframes to accelerate SAF commercial adoption.<\/p>\n\n\n\n

For sustainability certification, SAF production must adhere to environmental protection criteria to prevent food security risks, deforestation and excessive water resource consumption. The most recognised international certification schemes include:<\/p>\n\n\n\n

\u2022 International Sustainability & Carbon Certification (ISCC)
\u2022 Roundtable on Sustainable Biomaterials (RSB)
\u2022 Renewable Fuel Standard (RFS)<\/p>\n\n\n\n

These certifications are verified by independent third-party organisations to ensure compliance with sustainability benchmarks. However, China has yet to establish a robust carbon emission accounting framework, limiting the credibility of domestic SAF certification in the international market. Consequently, Chinese producers primarily rely on ISCC and RSB for certification, but to enhance global competitiveness, an independent national SAF sustainability certification system must be developed.<\/p>\n\n\n\n

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Economic viability<\/strong><\/p>\n\n\n\n

Despite SAF\u2019s potential in aviation emissions reduction, economic feasibility remains a primary barrier to widespread adoption \u2013 a challenge shared by SAF markets worldwide. The production cost of SAF ranges from two to five times higher than conventional petroleum-based jet fuel, limiting commercial scalability. High production costs pose financial pressures on both airlines and consumers, reducing willingness to adopt SAF at a meaningful scale.<\/p>\n\n\n\n

SAF\u2019s elevated costs stem from raw material procurement, technology pathways, production location, transportation logistics and infrastructure investments. In China, UCO feedstock costs approximately 8,000 RMB (US$1,115) per tonne, while SAF produced via the HEFA pathway incurs a production cost of 15,000 RMB (US$2,090) per tonne, significantly exceeding the price of conventional jet fuel, which averaged 6,586 RMB (US$918) per tonne in 2022.<\/p>\n\n\n\n

Despite SAF\u2019s substantial emissions reduction benefits, the early-stage SAF market in China is constrained by limited supply chain maturity and insufficient large-scale production, resulting in persistently high per-unit costs. While government subsidies are gradually being introduced, financial incentives remain insufficient to offset airlines increased operational expenses when adopting SAF.<\/p>\n\n\n\n

To achieve economic competitiveness, SAF must:<\/p>\n\n\n\n

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    1. Enhance production efficiency by optimising technological pathways;
    2. Expand feedstock supply by diversifying raw material sources;
    3. Scale up production capacity to achieve economies of scale;
    4. Leverage policy incentives and market-based mechanisms to reduce SAF price differentials; and
    5. Accelerate progress towards price parity, making SAF more financially competitive with conventional jet fuels.<\/p>\n\n\n\n

    China\u2019s SAF industry is advancing, but challenges in feedstock availability, certification alignment and economic feasibility must be resolved to enable large-scale commercial adoption. Addressing these barriers requires regulatory optimisation, technological innovation and market-based financial incentives. With continued policy intervention, certification system improvements and investment in alternative SAF technologies, China can enhance SAF availability, economic viability and international market competitiveness, fostering a sustainable aviation transition.<\/p>\n\n\n\n

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    Structural solutions for SAF market expansion<\/strong><\/p>\n\n\n\n

    The high cost of SAF is not solely attributable to production technology but also arises from complexities within the supply chain. From feedstock sourcing to final consumption, stakeholders face various challenges that hinder SAF\u2019s price competitiveness with conventional jet fuel. Achieving price parity requires optimising supply chain management, addressing structural inefficiencies, and improving market efficiency.<\/p>\n\n\n\n

    Feedstock suppliers<\/em>:<\/p>\n\n\n\n

    SAF production relies heavily on waste-based feedstocks, particularly UCO, but supply instability persists due to several factors:<\/p>\n\n\n\n

    \u2022 Fluctuations in collection volumes \u2013 UCO availability is impacted by seasonal variations, regulatory changes, and market dynamics.
    \u2022 Export market competition \u2013 Despite the removal of UCO export tax rebates, international demand remains strong, affecting domestic availability.
    \u2022 Feedstock quality variability \u2013 UCO from different sources has inconsistent properties, requiring extensive pre-treatment, which increases production costs.<\/p>\n\n\n\n

    Proposed solutions: Establishing a standardised collection system and long-term supply agreements between UCO providers and SAF manufacturers can enhance feedstock stability. Additionally, government-imposed quality standards can reduce pre-treatment costs and improve operational efficiency.<\/p>\n\n\n\n

    SAF producers<\/em>:<\/p>\n\n\n\n

    SAF manufacturers primarily utilise the HEFA pathway, but several operational challenges remain:<\/p>\n\n\n\n

    \u2022 Challenges in securing long-term offtake agreements \u2013 Due to high SAF prices, airlines are reluctant to commit to long-term purchase contracts, affecting investment decisions.
    \u2022 Feedstock supply variability \u2013 Unpredictable UCO availability negatively impacts refinery throughput, raising operational costs.
    \u2022 Shortage of skilled professionals \u2013 SAF production requires specialised chemical engineering expertise, increasing human capital costs.<\/p>\n\n\n\n

    Proposed solutions: Government subsidies can help mitigate price differentials, encouraging airlines to sign long-term procurement agreements. Simultaneously, investment in technological innovation can improve production efficiency and lower unit costs.<\/p>\n\n\n\n

    Airports and fuel service providers<\/em>:<\/p>\n\n\n\n

    Airports serve as key SAF distribution hubs, but face obstacles related to fuel availability, infrastructure adaptation and blending regulations:<\/p>\n\n\n\n

    \u2022 Limited SAF availability \u2013 Airports lack stable access to SAF, hindering its widespread adoption.
    \u2022 Infrastructure constraints \u2013 The existing jet fuel transportation network is not fully compatible with SAF, resulting in logistical bottlenecks.
    \u2022 Quality assurance in blending \u2013 SAF must meet strict blending and quality control standards to ensure safe integration with conventional jet fuel.<\/p>\n\n\n\n

    Proposed solutions: Long-term agreements between China National Aviation Fuel Group (CNAF) and SAF producers can ensure continuous supply, while investment in dedicated SAF storage and distribution infrastructure can alleviate logistical barriers. Additionally, standardising quality control protocols will ensure safe and efficient fuel blending.<\/p>\n\n\n\n

    Airlines<\/em>:<\/p>\n\n\n\n

    Airlines seek to incorporate SAF into operations to comply with international decarbonisation policies such as CORSIA and ReFuelEU Aviation. However, major challenges persist:<\/p>\n\n\n\n

    \u2022 Limited SAF supply \u2013 Airlines struggle to source sufficient SAF volumes to meet regulatory mandates.
    \u2022 High green premium \u2013 SAF costs significantly exceed traditional jet fuel prices, increasing operational expenses.
    \u2022 Uncertain customer demand and willingness-to-pay \u2013 Passengers and freight clients exhibit varying levels of willingness to pay premiums for low-carbon air transport, influencing airline SAF adoption strategies.<\/p>\n\n\n\n

    Proposed solutions: By 2025, China will incorporate aviation emissions into its national carbon trading system, allowing airlines to offset emissions through SAF adoption. This market-based mechanism will partially reduce SAF usage costs while incentivising industry-wide uptake. Furthermore, consumer education initiatives, integrated into ticketing platforms, can enhance public awareness and acceptance of green aviation.<\/p>\n\n\n\n

    Financial institutions<\/em>:<\/p>\n\n\n\n

    Financial institutions play a critical role in SAF market expansion, providing capital for technological innovation and infrastructure development. However, SAF projects face high capital expenditure, long investment return cycles and market uncertainties, leading to elevated investment risks.<\/p>\n\n\n\n

    Proposed solutions: Public-private financial collaboration is essential to establish stable funding mechanisms for SAF growth. The following financial instruments can accelerate SAF commercialisation:<\/p>\n\n\n\n

    \u2022 Green loans, sustainable bonds, and industry funds \u2013 Global financial institutions such as the Asian Development Bank (ADB), World Bank and European Investment Bank (EIB) have introduced low-interest financing programmes for SAF production facilities. China\u2019s policy banks can adopt similar strategies to facilitate domestic investment.
    \u2022 Government-backed loan guarantees \u2013 Reducing investment risks for financial institutions will stimulate private sector involvement.
    \u2022 SAF-specific industry funds \u2013 Attracting private equity and institutional investors through favourable tax policies and equity incentives will enhance capital inflow into SAF infrastructure.<\/p>\n\n\n\n

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    Regulatory bodies<\/em>:<\/p>\n\n\n\n

    Regulatory agencies aim to accelerate SAF adoption, but must navigate challenges related to cross-sector dependencies, policy design complexity and emissions reduction targets:<\/p>\n\n\n\n

    \u2022 Sectoral competition for feedstocks \u2013 SAF feedstock overlaps with other industries, for example biodiesel and electrification, affecting supply stability.
    \u2022 Diverse policy options \u2013 Balancing mandatory blending targets, tax incentives and direct subsidies requires careful coordination.
    \u2022 Emission reduction vs. fuel availability trade-offs \u2013 Policymakers must align decarbonisation targets with feasible fuel supply levels.<\/p>\n\n\n\n

    Proposed solutions: Establishing a long-term regulatory roadmap, integrating mandatory blending ratios with market-driven incentives, will ensure SAF industry stability. Additionally, cross-sector collaboration must be strengthened to optimise feedstock utilisation and technology advancement.<\/p>\n\n\n\n

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    Supply chain optimisation<\/strong><\/p>\n\n\n\n

    Achieving SAF price parity with conventional jet fuel requires supply chain optimisation and multi-stakeholder collaboration. By securing stable feedstock supplies, reducing production costs, upgrading airport infrastructure, increasing airline adoption, implementing financial incentives and refining regulatory policies, SAF can progress toward large-scale commercialisation. These structural solutions will play a pivotal role in ensuring SAF becomes a viable and scalable option for global aviation decarbonisation.<\/p>\n\n\n\n

    The commercialisation of SAF in China is not merely an isolated development within the civil aviation sector but must integrate into two broader strategic frameworks: China\u2019s national energy transition and the global supply chain and commodity trade system. These two dimensions will determine SAF\u2019s long-term economic viability and international competitiveness.<\/p>\n\n\n\n

    The commercialisation of SAF in China must go beyond the current HEFA technology and be closely integrated with renewable energy, carbon capture utilisation and storage (CCUS) and hydrogen energy to scale production capacity and ensure long-term economic feasibility.<\/p>\n\n\n\n

    Currently, China\u2019s SAF production primarily relies on UCO-based HEFA technology, which is constrained by feedstock limitations and cannot sufficiently support large-scale market expansion. Therefore, it is critical to advance next-generation biofuels and synthetic fuel (PtL) technologies.<\/p>\n\n\n\n

    \u2022 Fischer-Tropsch (FT) Synthesis technology: Utilises biomass gasification to produce synthetic gas, which is then catalytically converted into SAF. This pathway is suitable for forestry and agricultural waste, broadening feedstock sources and improving production stability. The International Energy Agency (IEA) has indicated that FT synthetic fuel has significant cost reduction potential when produced at scale.
    \u2022 Power-to-Liquid (PtL) technology: Uses renewable electricity to synthesise SAF from carbon dioxide (CO2) and hydrogen gas (H2). China is rapidly expanding its wind and solar power infrastructure, providing ample clean electricity to support PtL technology. PtL fuels not only reduce carbon emissions but also diversify SAF feedstock sources, strengthening overall supply chain resilience.<\/p>\n\n\n\n

    Carbon capture utilisation and storage (CCUS) is a critical solution for reducing SAF production emissions. China still relies on fossil fuels for hydrogen production, but CCUS technology can significantly lower associated carbon emissions, making hydrogen production more sustainable.<\/p>\n\n\n\n

    \u2022 Industrial CO2 capture for SAF production: CCUS can be used to capture CO\u2082 emissions from industrial sources and repurpose them for synthetic fuel production. For example, direct air capture (DAC) technology extracts CO2 directly from the atmosphere, which can then be combined with green hydrogen to produce SAF. This approach not only lowers emissions but also enhances SAF\u2019s sustainability, ensuring compliance with global decarbonisation targets.
    \u2022 Optimising refinery emissions: CCUS can be integrated into existing refineries to mitigate carbon footprints in SAF production. China is currently implementing multiple CCUS demonstration projects, which could be expanded to SAF production facilities to strengthen overall emissions management.<\/p>\n\n\n\n

    Hydrogen energy plays a pivotal role in China\u2019s energy transition, and SAF production can benefit from green hydrogen as a complementary resource. Currently, China\u2019s hydrogen production is predominantly fossil-fuel-based, but future pathways include electrolysis from renewable energy sources and CCUS-enhanced hydrogen production.<\/p>\n\n\n\n

    \u2022 Electrolytic hydrogen production: Uses wind and solar power to generate green hydrogen, providing a stable hydrogen supply for PtL fuel synthesis. This process not only reduces carbon emissions but also enhances SAF sustainability.
    \u2022 CCUS-enabled hydrogen production: CCUS can be applied to existing hydrogen production facilities to reduce carbon emissions, creating low-carbon hydrogen sources. China is currently developing multiple CCUS hydrogen projects, which could be integrated with SAF production to create a comprehensive low-carbon fuel supply system.<\/p>\n\n\n\n

    The long-term commercialisation of SAF in China must expand beyond HEFA technology, integrating renewable energy, CCUS and hydrogen technologies to achieve industrial scalability. By advancing alternative fuel technologies, optimising carbon capture processes and building green hydrogen supply chains, China can enhance SAF\u2019s economic feasibility and establish itself as a leader in global aviation decarbonisation.<\/p>\n\n\n\n

    The commercialisation of SAF in China is not solely a domestic aviation industry initiative; it must be incorporated into global supply chains and commodity markets to ensure long-term economic feasibility and enhance China\u2019s global presence in SAF trade.<\/p>\n\n\n\n

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    Optimising China\u2019s SAF trade strategy<\/strong><\/p>\n\n\n\n

    China is currently one of the largest UCO exporters, with most exports directed toward European and North American markets. As China\u2019s SAF production scales, domestic UCO demand will increase, necessitating a balanced approach to international trade. China should:<\/p>\n\n\n\n

    \u2022 Ensure stable domestic SAF supply while maintaining global trade partnerships;
    \u2022 Electrolytic hydrogen production: Uses wind and solar power to generate green hydrogen, providing a stable hydrogen supply for PtL fuel synthesis. This process not only reduces carbon emissions but also enhances SAF sustainability.
    \u2022 CCUS-enabled hydrogen production: CCUS can be applied to existing hydrogen production facilities to reduce carbon emissions, creating low-carbon hydrogen sources. China is currently developing multiple CCUS hydrogen projects, which could be integrated with SAF production to create a comprehensive low-carbon fuel supply system.<\/p>\n\n\n\n

    China can adopt the book-and-claim system to enhance SAF tradability and optimise international market access.<\/p>\n\n\n\n

    Book-and-claim is an SAF trading mechanism that separates physical fuel supply from its environmental certification. Given SAF production limitations in Europe and North America, Book-and-claim provides a viable pathway for Chinese SAF producers to enter global markets and supply international airlines.<\/p>\n\n\n\n

    To maximise the effectiveness of book-and-claim, China must:<\/p>\n\n\n\n

    \u2022 Standardise SAF sustainability certifications to ensure compliance with international minimum criteria for lifecycle emissions and feedstock sourcing;
    \u2022 Develop a registry of certified SAF suppliers, ensuring transparency in fuel sourcing and preventing double counting, and
    \u2022 Integrate book-and-claim mechanisms into regulatory frameworks, enabling SAF purchases to count towards emission reduction mandates under global aviation policies.<\/p>\n\n\n\n

    China should establish SAF futures trading to increase market transparency and reduce price volatility. By integrating SAF into commodity markets, China can:<\/p>\n\n\n\n

    \u2022 Enhance liquidity and pricing stability;
    \u2022 Facilitate long-term procurement agreements; and
    \u2022 Strengthen SAF\u2019s role in the global energy transition.<\/p>\n\n\n\n

    By establishing long-term trade frameworks, China can solidify its SAF leadership in international markets and drive aviation decarbonisation through strategic global fuel supply positioning.<\/p>\n\n\n\n

    The commercialisation of SAF in China must extend beyond aviation industry efforts, integrating into national energy transition strategies and global supply chain networks. By optimising trade policies, leveraging book-and-claim mechanisms, standardising certification practices and establishing SAF futures trading, China can strengthen SAF\u2019s international competitiveness and accelerate global aviation decarbonisation. With continued policy support, market development and international cooperation, China\u2019s SAF industry is poised to become a transformative force in aviation\u2019s low-carbon future.<\/p>\n\n\n\n

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    Photo (Airbus): Air China A350-900<\/strong><\/p>\n\n\n\n

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