Core Insights - GXO Logistics and B&Q are collaborating to achieve net-zero carbon emissions in B&Q's logistics operations by 2040, with significant advancements in alternative fuel usage and AI technology [1][2][3] Group 1: Partnership and Goals - The partnership between GXO and B&Q began in 2015, managing B&Q's retail transport network and focusing on sustainability and innovation in logistics [2] - B&Q aims to decarbonize its logistics fleet, with a comprehensive roadmap called the B&Q Sustainability Glidepath launched in 2022, targeting a 40% reduction in emissions by 2024 [3] Group 2: Fleet Transformation - B&Q has deployed 105 Liquified Natural Gas (LNG) vehicles since 2019, now holding the second-largest LNG fleet in the UK, which has reduced carbon emissions by 16,000 tonnes [4] - All remaining vehicles and 80 refrigerated trailers were converted to Hydrotreated Vegetable Oil (HVO) by December 2024, achieving up to 90% reduction in CO₂ emissions compared to diesel [4] Group 3: Electrification and Operational Efficiency - The current electric vehicle (EV) fleet includes five electric vans and two electric HGVs, with plans to add 55 more EVs over the next five years, projected to save 250 tonnes of CO₂ equivalent annually [5] - Initiatives to reduce road miles include backhaul optimization, saving 104 tonnes of Scope 3 emissions in 2024, and a 9.5% reduction in fleet size since 2021 through improved scheduling [5] Group 4: AI and Future Innovations - B&Q is piloting GXO's AI-powered transport optimization platform, which is expected to save 240,000 kilometers and 150 tonnes of CO₂ annually, with full implementation planned for 2025 [7] - In Q1 2025, 35 new LNG-powered Volvo FH Aero tractor units were introduced, improving fuel efficiency by 3% and saving an estimated 100 tonnes of CO₂ annually [6]

Investment Rating - The report maintains a "Positive" investment rating for the industry [11]. Core Insights - In the first half of 2025, China's total exports of HVO and SAF reached 338,400 tons, a year-on-year increase of 8.06%, with domestic SAF export channels successfully opened [2][6]. - Biodiesel exports fell to 381,000 tons, a decrease of 42.4% year-on-year, primarily due to anti-dumping tariffs [7][17]. - UCO exports totaled 1,262,000 tons, down 10.5% year-on-year, with Singapore replacing the U.S. as the largest export destination [8][31]. - The report suggests monitoring overseas policies and demand changes, anticipating more supportive domestic policies to be implemented [9][43]. Summary by Sections SAF & HVO - In H1 2025, China's SAF export channels were successfully opened, with a total export volume of 338,400 tons, marking an 8.06% increase year-on-year. Jiangsu Province exported 14,900 tons of SAF to Belgium and Spain in June, likely from the Jiaao Environmental Lianyungang factory [6][16]. - Domestic SAF exports require approval from four government departments, and Jiaao Environmental received a license for 372,400 tons of bio-jet fuel, indicating a positive trend for future SAF exports [6][16]. Biodiesel - Biodiesel exports in H1 2025 were 381,000 tons, down 42.4% year-on-year, mainly due to anti-dumping tariffs imposed by the EU [7][17]. - Major export partners included Malaysia (141,000 tons), Singapore (98,700 tons), and the Netherlands (70,000 tons), with significant increases in exports to Malaysia and Singapore, likely for blending with marine fuel [7][22]. - The average export price for biodiesel was $1,103 per ton, a slight increase of 2.0% year-on-year, while total export value dropped by 40.6% to $3.02 billion [17]. UCO - UCO exports in H1 2025 were 1,262,000 tons, a decrease of 10.5% year-on-year, attributed to increased domestic SAF production and the cancellation of export tax rebates [8][29]. - The average export price for UCO was $1,048 per ton, up 17.9% year-on-year, driven by the EU's mandatory blending policy for SAF [8][29]. - Singapore became the largest export destination for UCO, with exports to the U.S. declining significantly due to high tariffs [31][35]. Market Outlook - The report emphasizes the need to track overseas policy changes and anticipates more domestic supportive policies to be implemented [9][43]. - The U.S. market faces significant uncertainty due to fluctuating tariff policies, while the EU's blending ratio requirements for SAF are expected to boost China's SAF industry [43]. - In Singapore, the demand for clean alternative fuels is projected to increase due to new carbon quota regulations for the shipping industry [43]. Investment Recommendations - The industry is viewed positively due to its reliance on waste oils as raw materials, with several companies producing qualified SAF and obtaining airworthiness certification. The report recommends focusing on raw material suppliers and processing companies like Zhuoyue New Energy [9][47].

Group 1 - Sustainable fuels are a global hotspot, with China's National Energy Administration launching initiatives for green liquid fuel technology and industrialization trials, focusing on SAF, sustainable diesel, bioethanol, green methanol, and green ammonia [2] - The first batch of pilot projects includes nine companies working on fuel ethanol, green methanol, and green ammonia, with notable projects such as 30,000 tons of cellulose fuel ethanol by Guotou Bio and 500,000 tons of green methanol by Goldwind Green Energy [2] - Internationally, companies like LG Chem and Mitsubishi Chemical are also making significant moves in sustainable fuel technologies [3] Group 2 - Mitsubishi Chemical's venture capital arm, Diamond Edge Ventures, invested in Licella Holdings, which specializes in advanced recycling and renewable fuel technologies [4] - Licella's technology can produce SAF, bio-crude oil, and renewable diesel from lignocellulosic waste using supercritical water [5] - Mitsubishi Chemical aims to expand its chemical recycling facilities and diversify raw materials as part of its "KAITEKI Vision 35" [6] Group 3 - LG Chem's subsidiary, LG-Eni BioRefining, has begun construction of South Korea's first HVO plant, expected to produce 300,000 tons annually by 2027 [7] - HVO is a new generation bio-oil made from waste cooking oils and can be used for SAF, biodiesel, and bio-naphtha production [8] - LG Chem plans to increase the proportion of bio-naphtha in its BCB products, which are certified by ISCC PLUS for environmental sustainability [9] Group 4 - The fourth Synthetic Biology and Green Bio-Manufacturing Conference (SynBioCon 2025) will be held in Ningbo, Zhejiang, focusing on AI in bio-manufacturing, green chemicals, new materials, future food, and agriculture [12] - The conference aims to explore trends in bio-manufacturing during the 14th Five-Year Plan and promote technology transfer and talent acquisition [12][20] - Various activities, including forums and workshops, will take place during the conference to facilitate discussions on innovations in the bio-manufacturing sector [12][29]

Investment Rating - The report maintains a "Cautious Recommendation" rating for the biodiesel industry, indicating a potential increase in stock prices relative to the benchmark index within the next 12 months [5][30]. Core Insights - The price center for HVO and SAF continues to rise, with domestic Ucome prices slightly narrowing. The international SAF landed price is reported at $2065.90 per ton, a slight decrease of 2.90% from the previous week, while the HVO offshore price is at 2146.65 yuan per ton, down 4.01% [1]. - Domestic waste oil and gutter oil prices have increased, with average prices for waste oil at 6940 yuan per ton (up 130 yuan) and gutter oil at 6500 yuan per ton (up 80 yuan) [2]. - The international crude oil market has shown volatility, impacting biodiesel prices. Despite cost-driven increases in Ucome, the price rise is insufficient to cover raw material costs, leading to reduced enthusiasm among producers [3]. - Recent export data for May indicates a subdued performance, with Ucome export volumes around 60,000 tons, and a notable trend of re-importing Ucome from Hong Kong [3]. - Germany has introduced a draft law to revise biofuel targets, aiming to curb fraud in the sector, which may lead to significant price increases for biofuels and compliance certificates [3]. Summary by Sections Price Trends - The report highlights the upward movement in HVO and SAF prices, with domestic Ucome prices influenced by raw material costs. The price dynamics in Europe show a slight decrease in FAME prices, while the demand in the HVO/SAF market remains supportive [1][3]. Export Performance - The report notes that the export performance of biodiesel products has been lackluster, with specific attention to the role of Hong Kong as a key transit point for Ucome [3]. Regulatory Developments - The introduction of new regulations in Germany is aimed at enhancing the integrity of the biofuel market, which could lead to increased prices and stricter compliance requirements [3]. Investment Recommendations - The report suggests focusing on companies with significant biodiesel or raw material production capacity, such as Zhuoyue New Energy, Jiaao Environmental Protection, and others, as they are expected to benefit from increased demand and improved raw material supply [4].

Investment Rating - The report maintains a positive outlook on the biodiesel industry, particularly highlighting the potential growth in demand for biojet fuel and marine biofuels, suggesting a focus on companies with significant biodiesel or raw material production capacity [4]. Core Insights - The report indicates a notable increase in HVO/SAF prices, with external SAF prices rising by 7.71% to $2127.65 per ton and HVO prices increasing by 8.69% to $2236.40 per ton [1]. - Domestic prices for waste cooking oil and gutter oil have also risen, with average prices reported at 6810 yuan per ton and 6420 yuan per ton, respectively [2]. - Significant industry news includes Singapore's record sales of bio-blended marine fuels and the U.S. EPA's proposed renewable fuel standards for 2026 and 2027, which are expected to increase biodiesel blending requirements significantly [3]. Summary by Sections Price Trends - External SAF and HVO prices have seen substantial increases, with SAF at $2127.65 per ton and HVO at $2236.40 per ton, reflecting a week-on-week increase of 7.71% and 8.69% respectively [1]. - European Ucome prices reached €1301.85 per ton, up 4.94%, while China's Ucome price was $1114.50 per ton, up 1.36% [1]. Domestic Market - Domestic waste cooking oil and gutter oil prices have increased, with waste cooking oil averaging 6810 yuan per ton and gutter oil at 6420 yuan per ton [2]. Industry Developments - Singapore's bio-blended VLSFO sales reached a new high of 95,800 tons, and the U.S. EPA's proposed rules aim to raise biodiesel blending to 5.61 billion gallons for 2026, a 67% increase from 2025 [3]. - The EU is launching a subsidy program to promote SAF usage, potentially increasing demand significantly [3]. Investment Recommendations - The report suggests focusing on companies with substantial biodiesel or raw material production capacity, such as Zhuoyue New Energy, Jiaao Environmental Protection, and others, due to expected demand growth and increased raw material supply [4].

Core Viewpoint - The report highlights the rising prices of HVO and SAF in Europe due to strong seasonal demand, which is expected to drive up UCO prices in China as well [1][2]. Group 1: HVO/SAF Price Trends - As of June 11, 2025, the prices for HVO and SAF in Europe are $2,002 and $1,949 per ton, reflecting increases of 13.97% and 11.60% respectively from their lowest points in Q2 2025 [1][2]. - The increase in SAF demand is attributed to the strong seasonal demand ahead of the summer flight season in Europe, with high-quality HVO experiencing a larger price increase [1][2]. Group 2: UCO Price Dynamics - In China, as of June 12, 2025, the prices for gutter oil and waste oil in East China are 6,250 and 6,650 RMB per ton, showing increases of 3.31% and 2.31% respectively from their lowest points in Q2 2025 [2]. - The rising demand for HVO and SAF overseas has led to increased inquiries for UCO in Chinese ports, resulting in a price increase for UCO [2]. Group 3: EU SAF Policy and Cost Implications - The EU is gradually implementing a 2% SAF blending policy, with measures such as an environmental surcharge of 6-20 euros being introduced by some airlines to cover the costs associated with SAF blending [3]. - Despite these measures, the compliance costs for using SAF in Europe remain high, with an estimated total cost of $12 billion for purchasing 1 million tons of SAF by 2025, potentially doubling the procurement costs for airlines [3]. Group 4: Future Demand for UCO - The demand for SAF is expected to grow steadily, which will likely increase the demand for UCO as EU end-user demand recovers and SAF production facilities continue to actively procure raw materials [4]. - The price of UCO is influenced by the procurement levels of HVO and SAF plants, with a notable increase in UCO demand observed since 2025 due to its strong carbon reduction attributes [5].

Investment Rating - The report maintains a "Recommended" rating for companies with significant biodiesel or raw material production capacity, including Zhuoyue Xinneng, Jiaao Environmental Protection, Shanggao Huaneng, Haineng Kexin, and Langkun Environment [4][5]. Core Insights - The biodiesel market is expected to see increased demand and raw material supply due to the cancellation of export VAT refunds on raw materials, which will drive growth in the biodiesel sector [4]. - Recent agreements, such as the one between Cathay Pacific and Sinopec for SAF procurement, indicate a positive trend in the adoption of domestic SAF, enhancing the supply chain for biodiesel [3]. - The average prices for domestic waste cooking oil and gutter oil have increased, with waste cooking oil priced at 6640 CNY/ton and gutter oil at 6180 CNY/ton, reflecting a stable export outlook for UCO to Europe, the US, and Southeast Asia [2][4]. Summary by Sections Price Trends - The report notes a week-on-week increase in external HVO/SAF prices, with SAF at 1884.5 USD/ton (up 4.87%) and HVO at 1960.75 CNY/ton (up 3.46%) [1]. - Domestic price differences for biodiesel exports to Europe have reached 2539 CNY/ton, showing a weekly increase of 163 CNY/ton [1]. Export Expectations - The report anticipates a significant rise in China's HVO/SAF export volumes for May, with estimates nearing 40,000 tons, supported by rising external prices [3]. - The report highlights that the domestic HVO/SAF factories are maintaining strong procurement levels, indicating robust market demand [2]. Company Performance Forecast - The earnings per share (EPS) and price-to-earnings (PE) ratios for key companies are projected, with Zhuoyue Xinneng expected to have an EPS of 3.16 CNY in 2025 and a PE of 14 [5].