Commentary – China’s SAF Industry Poised to Transform Aviation’s Low-Carbon Future

Mandates should be enacted to scale sustainable aviation fuel across airlines, backed by transparency and a clear programme with targets rising from about 200,000 tonnes in 2025 towards several million tonnes by 2030, aligning investment with decarbonisation goals.

A scenario shows how a mix of locally sourced feedstock and hydropower-powered processing can yield a viable pathway, slashing lifecycle emissions and enabling scale across fleets.

Strategic investment in university research centres and public–private partnerships will speed the development of interoperable systems, while aligning with airworthiness standards and ensuring robust data sharing for transparency.

In one province, SAF procurement pilots anchor demand and create a playbook for scale, with airlines committing to new routes and airports adapting fuel logistics to support a multi-year rollout under the programme governance.

A photo can show the feedstock logistics, refining, and distribution path; the image highlights reporting transparency and signals readiness for an accelerated SAF rollout, with tonnes produced rising and continued investment in feedstock diversification.

Aviation Decarbonization Briefing

Recommendation: Implement an independent, time-bound sustainable aviation fuel adoption framework coordinated by the ministry, ensuring airworthiness alignment and traceability from feedstocks to blended fuels through a book-and-claim registry.

Milestones and metrics: by 2026, 15 major hubs will operate on-site storage and supply pilots to shorten handling time; by 2030, roughly 30% of airports will be linked to feedstock-to-fuel value chains, enabling blended applications on scheduled services; by 2035, SAF usage on long-haul routes could reach 25-40% via converted feedstocks and book-and-claim settlements, with progress achieved and tracked by independent verification, then reviewed by sector and policy partners.

Technical foundations: the hefa pathway remains the near-term backbone for scaling, given existing refinery capacity and waste-feedstocks; linnea analytics provide lifecycle data, cost trajectories, and resilience forecasts to guide decisions; technical frameworks require consistent reporting from airports on storage capacity, throughput, and safety checks to maintain airworthiness standards.

Trade-offs and integration: align procurement, certification, and infrastructure with centre-based logistics; optimise transport and storage networks to reduce time-to-traffic; getting commitments from fuel suppliers and airlines is essential to realise the plan; diversify feedstocks to reduce price volatility and ensure stable supply across markets, improving resilience across markets.

Operational recommendations: embed planning for this shift in strategic capital programs, with decisions anchored in linnea-driven scenarios; invest in conversion facilities near feeding hubs and at network centres; automate book-and-claim settlements to ensure transparent traceability; prioritise airports with heavy traffic to accelerate impact and improving resilience.

Assess SAF production capacity in China: feedstock options, refining capacity, and regional supply hubs

Recommendation: Expand modular HEFA production near eight regional hubs to enable scalable output while integrating waste streams and crop oils, reaching airworthiness standards and supporting cargo and travel demand.

Feedstock options include used cooking oil, animal fats, non-edible oils, and municipal solid waste lipids, with agricultural residues and algal streams as supplementary sources. Sinopec-led sourcing agreements and private partnerships should lock in multi-year feedstock contracts to stabilize price and prevent supply shocks, while ensuring clean, sustainable streams.

Refining capacity is concentrated across eight major complexes along the north and coastal centre, with reported running capacity in the tens of millions of tonnes per year. The second-largest hub sits on the east coast, enabling standard cargo handling and robust logistics to national centres and regional hubs, underpinning the broader supply chains.

Regional supply hubs will co-locate with refining centres to form a centre-based network that reduces transport distance to airports and travel corridors. Key corridors along the north power axis and a hong kong maritime corridor support imports of feedstock and distribution of finished product to cargo terminals and global travel networks.

Data from insightiq shows eight major refineries accounted for most observed output, with sinopec and other majors driving integration across chains. This scenario enables rapid deployment of new units and allows cross-portfolio support to improve airworthiness compliance and decarbonisation metrics, aligned with chinas broader market goals.

Implementation steps include securing long-term feedstock deals with farmers, waste processors, and oleochemical suppliers; retrofitting existing units to HEFA-compatible configurations; establishing eight regional hubs linked by rail and port to cut transit times; coordinating with Boeing testing programs to validate performance in cargo and travel routes; and monitoring progress with InsightIQ data dashboards to adjust capacity by region for reach and resilience.

Evaluate airport readiness for SAF blending: storage, handling, and distribution networks

Recommend establishing dedicated, hefa-compatible storage tanks and segregated blending lines at hubs, with calibrated meters, leak detection, and fire suppression, to enable market-driven blending while maintaining product quality. This approach should be backed by a beijing roadmap coordinated with caac and industrys operators, and Linnea-led trials to validate material compatibility and emission reductions, showing that blending targets can be achieved without compromising safety or throughput.

Storage readiness focuses on capacity, materials, and containment. Target two days of hub throughput with separate, corrosion-resistant tanks and dedicated piping for blended streams, using food-grade seals and gaskets to minimize contamination risks. Implement inline acid tests and corrosion monitoring to protect properties that influence gaskets and seals, while maintaining compatibility with acids present in certain blends. Require sourcing of a stable hefa-derived feedstock stream and document third-party test results to verify long-term stability. Extend data collection from studies and trials to a formal framework that can be adopted across airports, moving beyond isolated pilots to scalable, repeatable practices.

Handling and blending workflows must be tightly controlled. Create a dedicated blending zone with pre-approved ratios and automated mass-flow metering to prevent cross-contamination. Use standardized operating procedures (frameworks) for fueling, with validated credits for parity between blended and conventional streams in terms of throughput and safety checks. Ensure staff training and competency are documented, and implement managed change controls for any equipment modification. Pilot programs should include Linnea-led demonstrations to capture real-world properties, repeatedly testing for emission impacts and verifying that quality specifications remain within defined limits while supporting market-driven adoption.

Distribution networks require clear segregation and robust traceability. Establish dedicated hydrant and loading arms for blended streams, with segregated distribution paths by mode (truck, rail, and pipeline) and auditable inventory records. Align with beijing authorities and caac requirements to document sourcing, blending ratios, and delivery events. Build parity in scheduling and turnaround times so blending does not reduce fleet utilization, and include customer examples to illustrate practical implementations and willingness from airport operators and airlines to adopt these practices.

Identify policy levers: subsidies, mandates, and regulatory steps to speed adoption

Recommendation: Implement a combined policy package that aligns industrial goals with rapid commercialisation of greener aviation fuels, with the ministry coordinating cross‑agency actions and the university sector feeding research into policy design. This is a proud step that signals leading intent and provides a roadmap for the broader supply chain.

Subsidies should target capex and operating costs for feedstocks and processing technologies, with a tiered approach that grows support in early‑stage projects and declines as scale is achieved. This reduces the risk of stranded assets and helps mitigate early losses, enabling sourcing diversification that avoids food competition and strengthens industrial capacity. Supporting measures for diesel‑like blends can accelerate commercialisation and provide a bridge to larger market uptake.

Mandates should be credible and time‑bound, with escalating milestones for blending shares and clear sustainability criteria that ensure real carbon reductions. Increasing targets such as 2–3% by 2025 and 10–15% by 2030 could be considered, depending on feedstock availability and technology readiness. Supporting measures include import parity rules and local content incentives to strengthen domestic capabilities, ensuring that demand grows while suppliers look for scale and efficiency.

Regulatory steps should establish a transparent lifecycle carbon accounting framework, a unified sustainability standard for feedstocks, and a streamlined permitting timeline that reduces project lead times for first movers in industrial supply chains. The ministry should publish a clear compliance path and align with international best practices to minimize indirectly created friction at the terminal, storage, and distribution points, improving regulatory certainty for investors.

Broader sourcing policy should prioritize diverse feedstocks, including waste oils, fats, and non‑food crops, while guarding food security. A policy package should encourage cross‑sector collaboration with agriculture and energy to ensure that diesel‑like blends can be integrated with existing terminal infrastructure and freight networks. Facts show that early pilots led by a leading university can accelerate technology transfer and strengthen commercialisation outcomes. The strategy is looking across the supply chain to achieve impact, its looking broader to achieve goals, and thats a key element for the broader aims.

Implementation requires a dedicated ministry unit, building partnerships with industry and the university sector to strengthen policy execution. A clear metrics framework will track scalability, increasing adoption, and industrial impact; the team should publish facts to ensure transparency. This approach must incorporate feedback from stakeholders, thats why governance includes rotating chairs from the ministry and a council of leading researchers from the university sector to ensure alignment with real‑world needs, strengthening policy execution and ensuring they have the capacity to drive adoption.

Estimate costs, financing paths, and market signals for airlines and suppliers

Prioritize staged, modular deployment of safs at major hubs with tailored financing and binding offtake to reduce upfront risk. Engage member banks and international facilities to improve access and utilisation, and leverage hong-based funds to accelerate deployment.

Cost drivers include renewable feedstock costs and pre-treatment energy demands, as well as CAPEX, with significant impact on LCOF. A typical 100 kt/year safs facility requires about USD 0.5–0.9 billion in CAPEX, with OPEX per liter in the USD 0.60–1.10 range depending on renewable feedstock mix and processing efficiency. Scale to 300–500 kt/year can reduce unit costs significantly through learning and utilisation.

Financing paths blend debt, equity, and risk-sharing instruments. A typical structure uses 60% debt, 20–30% equity, and 10–20% grants or guarantees; tenors 8–12 years; pricing in the range of SOFR/euribor plus 250–500 bps, with credit enhancements to lower rates. Offtake agreements with airlines or lease-backed assets provide cash-flow visibility; resilience tools such as price adjustment clauses support forecastability and help achieve revenue certainty. caacs approvals and domestic policy frameworks shape deployment timelines, while world banks and hong-based funds show appetite for long-tenor facilities; additionally, ensure access to capital through guarantees and credit lines to maintain smooth deployment.

Market signals show demand dynamics as awareness grows and policy support tightens the safs premium. When policy incentives align, airline decisions accelerate, particularly on long-haul routes, and hub operators prioritise shared logistics to improve utilisation and deployment speed. Departing from fossil-based jet fuel significantly improves environment profiles, and world benchmarks show rising acceptance of safs across regional markets.

Industrial suppliers should tailor product lines to safs deployment with modular pre-treatment units, scalable blending modules, and transport-ready logistics. Invest in technologies that significantly lower energy intensity and increase yield; focus on renewable feedstocks and diversified product streams; ensure access to feedstock through world markets; align with safety and data-sharing frameworks; aim for utilisation improvements through managed logistics and standardized testing.

Model emissions outcomes: short-term reductions, aviation-wide impact, and monitoring metrics

Launch a phased, data-driven pilot across select asia-wide hubs, leveraging cross-sector collaboration and market-based incentives to realize next-year aviation-related emission reductions of 6–9%.

Particularly in asia, data-sharing across civil, provincial, and industrial actors is critical to closing measurement gaps.

These strategies align with policies and investing in technologies to move ahead with decarbonization, and they should be tested in late-cycle windows to validate robustness before upscaling.

• Short-term reductions: data indicate direct cuts of 5–8% within 12 months, anchored by 12–18% uptake of alternative fuels in participating corridors and a 2–4% gain from optimized routing and weight reductions. Scenario analysis suggests 9–11% is possible when late-stage fleet refreshes and enhanced ground handling are combined.
• Aviation-wide impact: cross-sector coupling amplifies benefits beyond the aviation domain as policies, incentives, and financing align across civil and industrial players. In the next 18–24 months, asia-wide emissions could fall by 3–6%, rising to 12–20% by the late horizon as phasing accelerates and technologies mature. A comparison against baseline scenarios shows stronger results when market-based instruments remain integrated and investing scales up.
• Monitoring metrics: data-sharing dashboards must cover all provinces, with quarterly quality checks. Key indicators include:
  1. Share of energy in operations from sustainable sources
  2. Lifecycle emissions per tonne-km
  3. Operational efficiency index (specific fuel consumption improvements)
  4. Reporting rate across partners (airlines, airports, fuel suppliers, authorities)
  5. Data pipeline latency and regional coverage gaps

  Additionally, track next and beyond benchmarks to gauge long-term progress and resilience of the moving cross-sector network.