China Launches Pilot Project for the Application of SAF
From：
Zhonglin International Group Date：12-20 677 Belong to：Industry Related
In September of this year, the National Development and Reform Commission and the Civil Aviation Administration of China jointly held the launch ceremony for the pilot application of Sustainable Aviation Fuel (SAF), marking the progress of China's civil aviation industry towards a more environmentally friendly and low-carbon direction. Starting from September 19, 2024, 12 flights operated by Air China, China Eastern Airlines, and China Southern Airlines from Beijing Daxing, Chengdu Shuangliu, Zhengzhou Xinzheng, and Ningbo Lishe airports will be officially refueled with SAF. On the early morning of December 19, 2024, a SF Airlines B737 all cargo aircraft with SAF refueling took off from Ningbo and landed at Ezhou Huahu International Airport at 1:50 am, marking the first successful commercial flight of domestic all cargo aircraft using sustainable aviation fuel. Starting from 2025, SAF will continue to expand its application, inject new vitality into the development of the domestic civil aviation industry, and provide green guarantees.
1. SAF has enormous potential in the future market
Data shows that the aviation industry accounts for 2% -3% of global annual greenhouse gas emissions, but due to its unique characteristics, it has attracted much attention in global efforts to address climate change and reduce carbon emissions. Although the carbon emissions of the aviation industry are not very high, the difficulty and fast growth rate of decarbonization and emission reduction in the industry, as well as its high-altitude emission characteristics, make the aviation industry have a significant impact on global carbon emissions and climate change. Therefore, the International Civil Aviation Organization (ICAO) has established a long-term climate goal to achieve net zero emissions in international aviation operations by 2050. This means that governments and industries around the world are willing to temporarily set aside disputes and work together to achieve the same goal of net zero carbon emissions by 2050. The market demand for the SAF industry will continue to soar.
According to research, the global market size of sustainable aviation fuel (SAF) is expected to reach approximately 8.1 billion yuan in 2023. The compound annual growth rate from 2019 to 2023 shows a stable growth trend. Looking ahead, it is expected that the market size will exceed 130 billion US dollars by 2033, with an expected compound annual growth rate of 58.5% over the next 10 years. By 2050, the demand for SAF will reach 358 million tons. According to the landed price of 6171 yuan/ton of bonded aviation kerosene imported into China in February 2023, if the cost of SAF is equivalent to aviation kerosene in the future, the global annual output value of SAF will reach about 2.2 trillion yuan by 2050.
2. Domestic SAF industrialization accelerates
In October last year, the Ministry of Industry and Information Technology and four other departments jointly issued the "Outline for the Development of Green Aviation Manufacturing Industry (2023-2035)", proposing that during the 14th Five Year Plan period, medium and large aircraft such as dry and branch lines should adhere to the coexistence of new aerodynamic layouts, sustainable aviation fuels, and hybrid power. At present, the domestic production capacity of SAF is only about 150000 to 200000 tons. But with technological innovation, diversified raw materials, and continuously expanding market size, it is expected that the cost of SAF will further decrease, and market demand will continue to rise. International research institutions predict that China's demand for SAF will reach 3 million tons by 2030; By 2050, it is expected to increase to 86 million tons.
Technically speaking, taking the most mature oil hydrogenation (HEFA) route as an example, China's waste edible oil production will be about 8 million tons in 2023, which can produce over one million tons of SAF. In the longer term, the production of agricultural and forestry waste, which can be used as raw materials through technologies such as Fischer Tropsch and aqueous catalysis, can reach hundreds of millions of tons per year. This means that theoretically, the SAF production capacity can reach tens of millions of tons per year, proving that China has very good conditions for SAF production.
In terms of policy, the launch of the SAF application pilot policy has also pressed the accelerator button for the domestic industrialization of SAF, marking a crucial step in the green transformation of China's aviation industry and further promoting the acceleration of the development of the entire SAF industry chain in China. Major airlines will also seek cooperation in the upstream and downstream of the industry chain, establishing close cooperative relationships with SAF suppliers through strategic investments, joint ventures, and other forms, in order to enhance the enthusiasm of SAF production enterprises. But the country still needs to timely introduce more guiding policies to guide the SAF industry towards better and higher levels of development.
3. Looking ahead to the future, the road ahead is long and arduous
Developing SAF is an important lever for cultivating and developing new quality productivity, which can form new industries, new models, and new driving forces; This is an important path for the deep decarbonization of the aviation industry, an important measure for China to commit to achieving carbon neutrality and peak carbon emissions internationally, and an important step towards realizing the green transformation of the aviation industry and increasing the initiative of China's civil aviation in global civil aviation competition and cooperation. Furthermore, China has excellent conditions for SAF production and has the potential to become a major supplier of SAF worldwide.
But currently, the production capacity of SAF in China is relatively limited, with a planned capacity of about tens of thousands of tons per year and actual output of tens of thousands of tons per year. The market is still in a blue ocean state and no leading enterprises have yet emerged. In terms of supply, there is still a certain gap between the industrialization progress of SAF in China and the international advanced level. Even the relatively mature HEFA process packages currently come mostly from international enterprises such as Honeywell. China urgently needs to establish an independent SAF production and supply capacity. From the perspective of technical routes, the seven production routes currently certified by the American Society for Testing and Materials (ASTM) are proposed by foreign governments and enterprises. In order to seize the initiative in the SAF field in the future, China needs to propose a more suitable technical route for its national conditions.
However, the launch of SAF application pilot has greatly enhanced the confidence of domestic SAF industry investment and capacity establishment, which will attract more funds and technical talents to enter this field in the future. This is conducive to accelerating China's catching up with international advanced levels in the SAF field. The government also needs to strengthen guidance, neither blindly optimistic nor self deprecating. We need to take one step at a time so that we can shine in the global market of SAF in the near future.
1. SAF has enormous potential in the future market
Data shows that the aviation industry accounts for 2% -3% of global annual greenhouse gas emissions, but due to its unique characteristics, it has attracted much attention in global efforts to address climate change and reduce carbon emissions. Although the carbon emissions of the aviation industry are not very high, the difficulty and fast growth rate of decarbonization and emission reduction in the industry, as well as its high-altitude emission characteristics, make the aviation industry have a significant impact on global carbon emissions and climate change. Therefore, the International Civil Aviation Organization (ICAO) has established a long-term climate goal to achieve net zero emissions in international aviation operations by 2050. This means that governments and industries around the world are willing to temporarily set aside disputes and work together to achieve the same goal of net zero carbon emissions by 2050. The market demand for the SAF industry will continue to soar.
According to research, the global market size of sustainable aviation fuel (SAF) is expected to reach approximately 8.1 billion yuan in 2023. The compound annual growth rate from 2019 to 2023 shows a stable growth trend. Looking ahead, it is expected that the market size will exceed 130 billion US dollars by 2033, with an expected compound annual growth rate of 58.5% over the next 10 years. By 2050, the demand for SAF will reach 358 million tons. According to the landed price of 6171 yuan/ton of bonded aviation kerosene imported into China in February 2023, if the cost of SAF is equivalent to aviation kerosene in the future, the global annual output value of SAF will reach about 2.2 trillion yuan by 2050.
2. Domestic SAF industrialization accelerates
In October last year, the Ministry of Industry and Information Technology and four other departments jointly issued the "Outline for the Development of Green Aviation Manufacturing Industry (2023-2035)", proposing that during the 14th Five Year Plan period, medium and large aircraft such as dry and branch lines should adhere to the coexistence of new aerodynamic layouts, sustainable aviation fuels, and hybrid power. At present, the domestic production capacity of SAF is only about 150000 to 200000 tons. But with technological innovation, diversified raw materials, and continuously expanding market size, it is expected that the cost of SAF will further decrease, and market demand will continue to rise. International research institutions predict that China's demand for SAF will reach 3 million tons by 2030; By 2050, it is expected to increase to 86 million tons.
Technically speaking, taking the most mature oil hydrogenation (HEFA) route as an example, China's waste edible oil production will be about 8 million tons in 2023, which can produce over one million tons of SAF. In the longer term, the production of agricultural and forestry waste, which can be used as raw materials through technologies such as Fischer Tropsch and aqueous catalysis, can reach hundreds of millions of tons per year. This means that theoretically, the SAF production capacity can reach tens of millions of tons per year, proving that China has very good conditions for SAF production.
In terms of policy, the launch of the SAF application pilot policy has also pressed the accelerator button for the domestic industrialization of SAF, marking a crucial step in the green transformation of China's aviation industry and further promoting the acceleration of the development of the entire SAF industry chain in China. Major airlines will also seek cooperation in the upstream and downstream of the industry chain, establishing close cooperative relationships with SAF suppliers through strategic investments, joint ventures, and other forms, in order to enhance the enthusiasm of SAF production enterprises. But the country still needs to timely introduce more guiding policies to guide the SAF industry towards better and higher levels of development.
3. Looking ahead to the future, the road ahead is long and arduous
Developing SAF is an important lever for cultivating and developing new quality productivity, which can form new industries, new models, and new driving forces; This is an important path for the deep decarbonization of the aviation industry, an important measure for China to commit to achieving carbon neutrality and peak carbon emissions internationally, and an important step towards realizing the green transformation of the aviation industry and increasing the initiative of China's civil aviation in global civil aviation competition and cooperation. Furthermore, China has excellent conditions for SAF production and has the potential to become a major supplier of SAF worldwide.
But currently, the production capacity of SAF in China is relatively limited, with a planned capacity of about tens of thousands of tons per year and actual output of tens of thousands of tons per year. The market is still in a blue ocean state and no leading enterprises have yet emerged. In terms of supply, there is still a certain gap between the industrialization progress of SAF in China and the international advanced level. Even the relatively mature HEFA process packages currently come mostly from international enterprises such as Honeywell. China urgently needs to establish an independent SAF production and supply capacity. From the perspective of technical routes, the seven production routes currently certified by the American Society for Testing and Materials (ASTM) are proposed by foreign governments and enterprises. In order to seize the initiative in the SAF field in the future, China needs to propose a more suitable technical route for its national conditions.
However, the launch of SAF application pilot has greatly enhanced the confidence of domestic SAF industry investment and capacity establishment, which will attract more funds and technical talents to enter this field in the future. This is conducive to accelerating China's catching up with international advanced levels in the SAF field. The government also needs to strengthen guidance, neither blindly optimistic nor self deprecating. We need to take one step at a time so that we can shine in the global market of SAF in the near future.
