Zhi Tong Cai Jing·2026-01-13 07:45Core Viewpoint - The restructuring between Sinopec and China National Aviation Fuel Corporation aims to streamline the aviation fuel supply chain from upstream production to downstream refueling, accelerating the industrialization of Sustainable Aviation Fuel (SAF) in China, which is expected to benefit domestic biodiesel producers [1][4]. Group 1: Restructuring Details - Sinopec and China National Aviation Fuel Corporation are undergoing a restructuring approved by the State Council, marking a significant move in the integration of state-owned enterprises [2]. - This merger combines the strengths of Sinopec, the world's largest refining company, and China National Aviation Fuel, Asia's largest aviation fuel service provider, enhancing the competitiveness of China's aviation fuel industry [3]. Group 2: SAF Market Dynamics - The global demand for SAF is increasing, driven by regulations such as the EU's ReFuelEU, which mandates that by 2025, 2% of aviation fuel used at EU airports must be SAF, with targets of 6%, 20%, and 70% by 2030, 2035, and 2050 respectively [5]. - In China, a pilot program for SAF blending will begin in March 2025, with an estimated annual SAF blending volume of 32,000 tons from four major airports, contributing to the growing domestic demand [5]. Group 3: Investment Opportunities - The rising demand and prices for SAF are expected to tighten the supply of raw materials, particularly waste oils, which have a theoretical annual production capacity of 12 million tons in China, with current collection at about 5 million tons [6]. - As the SAF industry accelerates, the focus of supply chain challenges will shift from SAF availability to raw material supply, prompting a comprehensive recommendation for investment in the waste oil-SAF full industry chain [6].