Core Viewpoint - Sustainable Aviation Fuel (SAF) is identified as a key driver for the aviation industry's goal of achieving carbon neutrality by 2050, expected to contribute 65% of carbon reduction efforts [1] Industry Overview - The global SAF production capacity is significantly lacking, requiring a 60-fold expansion within 25 years to meet a trillion RMB market demand [2] - Current SAF production processes are primarily based on the HEFA route, with 11 SAF production processes certified by ASTM, and HEFA being the only technology currently used for large-scale commercial SAF production [1][3] Policy Environment - Multiple countries, including the EU, UK, and the US, have implemented or are planning to implement mandatory blending policies for SAF, which will drive demand [2] - China is set to launch pilot SAF blending in 2024, indicating a broad future development space for the SAF industry in the country [2] Production and Supply Chain - The upstream raw materials for SAF include waste cooking oils, agricultural and forestry waste, municipal solid waste, and industrial emissions [1] - The production process involves technology licensing and construction phases, with foreign companies currently dominating the technology supply [1][3] - Domestic companies like Jianlong Micro-Nano are focusing on breakthroughs in heterogeneous catalysis for SAF production [1] Economic Factors - The profitability of HEFA-based SAF production is heavily influenced by raw material costs, with companies that can secure raw materials at lower prices likely to enhance their profitability [3] - The G+FT, AtJ, and PtL processes may increase SAF prices in the short term due to high production costs, but PtL has the greatest potential for cost reduction in the long term [3]

Core Viewpoint - The sustainable aviation fuel (SAF) industry in China is rapidly developing through pilot policies, standard system improvements, and collaborative industrial ecosystems [2][3]. Group 1: Industry Development - China National Aviation Fuel (CNAF) initiated its SAF refueling plan in 2022, with the first phase (September-December 2024) involving 12 flights from four airports, with an estimated refueling volume of approximately 0.4 million tons [2]. - The second phase (March 19 - June 30, 2025) will see all domestic flights at these airports using a 1% SAF blend, with an expected volume of 0.8 million tons [2]. - The third phase, starting in July 2025, will expand to eight airports nationwide, with an anticipated refueling volume of about 3 million tons [2]. Group 2: Project Statistics - As of March 31, 2025, there are 64 SAF projects in China, with a total potential capacity of 9.94 million tons per year [3]. - The potential capacity is primarily concentrated in Guangdong, Jiangsu, Henan, Sichuan, and Shandong provinces, driven by raw material availability, industrial foundation, policy support, and market demand [3]. Group 3: Challenges and Opportunities - Currently, only 10% of planned projects have been completed, with a total capacity of 0.996 million tons per year, due to the absence of a definitive carbon neutrality goal for the aviation industry and a lack of mandatory SAF usage requirements [6]. - The global demand for SAF is mainly in the EU, US, and UK, and the lack of dedicated export codes for SAF presents uncertainties for international trade [6]. - In April 2023, the Ministry of Commerce approved the export of bio-aviation fuel from Lianyungang, marking a significant step in opening international export channels for China's SAF industry, which is expected to enhance export volumes by 2025 [6].