February 27, 2025 [Reuters]- Several Chinese builders of sustainable aviation fuel (SAF) plants are postponing start up as a lack of government policy guidance restrains them from marketing the fuel domestically or exporting it.
Reuters reported last May that companies were investing more than $1 billion to build China’s first plants to turn waste cooking oil into aviation fuel for export and for domestic demand once Beijing requires its use to cut emissions.
However, Beijing has yet to announce the mandatory use of the lower-carbon fuel for the world’s second-largest aviation fuel market, disappointing industry expectations. Companies were hoping that by the end of 2024 the government would issue requirements for 2% to 5% of SAF mixed with traditional jet kerosene by 2030.
Privately led Tianzhou New Energy and Jinshang Environmental Protection Tech, which are each building SAF plants in southwestern Sichuan province, have pushed-back target dates for first production, company executives said.
Tianzhou aims to start test operations at its plant in Weiyuan in the second half of 2025 versus an earlier target of the end of 2024, said a senior company official who asked not to be identified, citing changes in construction schedules as a factor in addition to policy uncertainty. The site is set to process 200,000 metric tons per year of used cooking oil into SAF, or about 4,300 barrels per day.
Jinshang Chairman Ye Bin said the trial of its 500,000 tpy plant in Chengdu would be delayed for about three months from its original start time.
“Original plan was to complete mechanical construction by the end of this year and test run the facility in (the first quarter) of 2026,” Ye said.
In late 2024, East China-based Zhejiang Jiaao Enprotech paused production shortly after launching its 500,000-tpy site in Lianyungang for a test run, said an industry executive with knowledge of the plant’s operation.
The executive, who declined to be named as the matter is not public, added that Jiaao is in the process of applying for an export license.
Companies are awaiting policies governing SAF exports, including a customs tariff code, quota management regime and tax rebate rules similar to those that apply to conventional aviation fuel, industry officials said.
China’s National Development and Reform Commission (NDRC), Civil Aviation Administration of China (CAAC) and Ministry of Commerce did not respond to requests for comment.
China produces about 200,000 metric tons annually of SAF mostly from two plants and mainly for export, according to four industry participants with knowledge of the matter.
One is operated by Bain Capital-backed EcoCeres, which began making the fuel in 2022 in east China for export. The other, central China-based Junheng Industry Group Biotech, started making the fuel in early 2024.
There are no SAF blending targets or mandates currently in force in Asia, with production mostly sent to Europe, although blending targets are scheduled to be in place next year in Malaysia, Thailand and Singapore.
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