2026-01-20 02:15SAF Industry Analysis: Super Cycle Driven by Supply-Demand Mismatch Industry Overview - The SAF (Sustainable Aviation Fuel) industry is experiencing a significant shift from "policy-driven" to "hard gap-driven" dynamics, particularly influenced by the upcoming EU ReFuelEU Aviation regulation set to take effect in 2025, which mandates the incorporation of 2%, 5%, and 70% sustainable aviation fuel in aviation fuel by 2025, 2030, and 2035 respectively, translating to a demand of 140 million, 350 million, and 5000 million tons [1][2] Key Insights - The price of SAF has surged over 50% throughout the year due to supply chain disruptions, leading to a significant widening of the price gap with upstream raw material UCO (Used Cooking Oil) [1] - Despite a potential decline in short-term demand post-2026, the UK’s blending target of 3.6% and Singapore's taxation policies are expected to support ongoing demand, with global production capacity estimated at 4-5 million tons, and an effective capacity of 2.4 million tons, which still falls short of the global demand of 2.8 million tons (Europe 1.8 million + USA 600,000 + South Korea and China 400,000) [1] Profit Distribution in the Industry - The industry logic has shifted from mere policy expectations to the realization of excess profits driven by scarce refining capacity [2] - Companies with existing or upcoming SAF production capacity are positioned to enjoy the highest processing profits, while those with compliant and traceable UCO resources will benefit from compliance premiums amid global trade barriers [2] Major SAF Suppliers and Capacities - Key SAF suppliers and their production capacities include: - Jiaao Environmental: 370,000 tons (with an additional 500,000 tons under construction) - Longkun Environment: 170,000 tons (planning to expand to 420,000 tons) - Sinopec: Zhenhai Refining 100,000 tons - Haineng Energy: Shandong Sanju 50,000 tons - Overseas Neste: over 500,000 tons - Unlisted Junheng Biological: 200,000 tons - Yigao Environmental: 200,000 tons [2]