Lang
Chinese state-owned energy firms are significantly increasing their production capacity for sustainable aviation fuel (SAF), a development that Caixin reports could lead to a global tightening of key raw material supplies. This state-backed expansion poses a particular risk to European airlines, which heavily rely on these materials.
Driven by its national strategic priorities, China announced plans for 16 new SAF projects in the first half of 2026 alone. In contrast, only four such projects were declared across the rest of the world during the same period. State-owned enterprises, including industry giants like Sinopec and China National Petroleum Corp, are responsible for nearly half of these new developments, marking a notable shift in a sector previously dominated by private refiners.
This surge in production capacity is projected to cause a worldwide shortage of used cooking oil (UCO) by 2028. Such a scarcity would severely disrupt supply chains, particularly for European markets that depend on Chinese UCO exports to meet their aviation emissions reduction targets. Used cooking oil currently constitutes a substantial 80% of the feedstock used in commercial SAF production. With China supplying nearly half of the world's UCO, its expanded domestic consumption is poised to be a pivotal factor in the global transition towards greener aviation fuels.
Source: China Economic Review