INSTITUTEOFENERGY,PEKINGUNIVERSITYTHEPRESENTANDFUTUREOFSUSTAINABLEAVIATIONFUELSINCHINAInstituteofEnergy,PekingUniversityOctober2022致谢Coverpicture:©PhotobyRudragosonPixabayTheInstituteofEnergy,PekingUniversityisanindependentenergythinktankunderPekingUniversity.TheInstitutefocusesonstrategicpolicyresearch,cutting-edgetechnologyresearchanddevelopment,educationandtraining,internationalexchangeandcooperationinthefieldofenergy,andstrivestobecomeatopenergythinktank.TakingadvantageofPekingUniversity'sstrongacademicfoundationandawidearrayofdisciplines,theoutstandingfacultymembersfrominsideandoutsidetheuniversity,theconveningpowerineducationandresearch,theInstituteworkswithglobalpartnerstoprovidesmartsolutionsforsustainableenergytransition.CLIMATECHANGEANDENERGYTRANSITIONPROGRAM(CCETP)TheInstituteofEnergy,PekingUniversitylaunchedtheClimateChangeandEnergyTransitionPrograminMarch2021,aimingtohelpChinaaddressclimatechangeandpromoteenergytransitiontopeakitscarbonemissionsby2030andachievecarbonneutralityby2060.TheprogramprovidespolicyrecommendationsandsupporttotheChinesegovernmentbysettingscience-basedambitiousgoalsandformulatingclearroadmapsandeffectiveactionplans.TheprogramencouragesChina'senergyindustrytobesafer,greener,andmoreefficient,andhelpsChinareduceandultimatelyphaseouttheuseoffossilfuels.Theresearchareasoftheprogramincludethemacroanalysisofthecoordinateddevelopmentofenergy,environment,economyandsociety,aswellasthefollowing:––Fossilfuelconsumptioncap;––Innovationinenergytechnologies;––Thepowersector'stransitiontoasystemdominatedbyrenewableenergies;––Promotionofelectrification;––Low-carbonandgreendevelopmentofenergy-intensivesectors;––Sustainabletransportation;––Demonstrationandpromotionofregional,provincial,andmunicipalcarbon-neutralmodels;––Reductionofdispersedcoalandplasticconsumption;––CarbonNeutrality,carbonsink,carbonmarket;––Energyjusticeandjusttransition,etc.THEPRESENTANDFUTUREOFSUSTAINABLEAVIATIONFUELSINCHINADINGYIRU1,YANGLEI1,ZHENGPING1,WANGQIANYU1ANDLVJIXING2October20221InstituteofEnergy,PekingUniversity2CivilAviationUniversityofChinaACKNOWLEDGEMENTSThisreportisdevelopedbytheInstituteofEnergy,PekingUniversity.Sustainableaviationfuels(SAF)playsavitalroleincarbonemissionreductionintheglobalaviationindustry,butthecorrespondingresearchworkisstilllacking,especiallyinChina.Inviewofthis,weorganizedthisresearch,whichlastedforoneyear,tofindoutthecurrentsituationoftheChinamarketandmakeapreliminaryprospectforthefuture.Itisourhopethatthisresearchcouldinspiremorefurtherexplorationinthisfield.Whenresearchingforthepurposeofandpreparingthereport,wewerefortunatetohavesupportfromexpertsfrommanygovernmentagencies,industriesandresearchinstitutes.Thankstotheirfirst-handinformationandprofessionalfeedback,thisreportisabletoprovideapanoramicviewofsustainableaviationfuelsinChina.Here,wewanttoexpressourgratitudetothemfortheirstrongsupport.Ourspecialthanksgoto:GaoHuaandXiangJinjingArgusMediaLiYaoguangBeijingHaixinEnergyTechnologyCo.,Ltd.DongYanandChaoWeiBeijingShougangLanzaTechNewEnergyCo.,Ltd.WangShiyaoandXuYaohuaS&PGlobalInc.ChenMin,ChenLixian,LiLinandWangZhaoBoeingChinaWangHuanandGuXianChina,AirBPXingZihengCathayPacificAirwaysLimitedZhuCuihanandZhangLingyingHangzhouEnergyEngineeringTechnologyCo.,Ltd.ZhangWei,YuZhanfuRolandBergerLiHaixing,PengMinandHanRenhuaShellChinaMaTeng,XupuTianzheNationalBiodieselIndustryCooperationGroupLiuShutongMotionECOWangTongjiaZhongdiyouNewEnergy(Shandong)Co.,Ltd.GongFengandZhaoHenghuiChinaNationalAviationFuelGroupLimitedWangChenguangGuangzhouInstituteofEnergyConservation,ChineseAcademyofSciencesYangXiaojunCivilAviationUniversityofChinaYuJingleiChinaAcademyofCivilAviationScienceandTechnologyXiangHaiTheSecondResearchInstituteofCAACYangZhiyuanAviationFuel/OilandAerochemicals,AirworthinessCertificationCenterofCAACZhangXiaoliChinaSouthernAirlinesHuangAibinSinopecZhenhaiRefining&ChemicalCompanyMoreover,wealsowanttothankZhangZhe,LvMingxuandLiaoYanguangfortheirassistanceindocumentation.TheauthorsaretrulythankfultoBoeingforitssupportofthisresearchproject.Shouldyouhaveanyadviceorsuggestion,pleasecontactusatgenergy@pku.edu.cn.TABLEOFCONTENTSExecutivesummary���������������������������������������������������������������������������������������������������������������������������xAbbreviations&glossary�������������������������������������������������������������������������������������������������������������������xiichapter1Theglobalaviationindustryandcarbonemissionsreduction���������������������������������������������������������������11.1Updatesoftheaviationindustrydevelopment���������������������������������������������������������������������������������21.2Progressoftheaviationindustryincarbonemissionsreduction������������������������������������������������������4chapter2TheroleofSAFinaviationemissionsreduction������������������������������������������������������������������������������72.1Mainmeasuresadoptedbytheaviationindustrytoreduceemissions����������������������������������������������82.2SAFwillbethemostimportantreductionmeasure������������������������������������������������������������������������92.3ItiscriticaltodramaticallyincreaseSAFproductionandconsumption���������������������������������������������9chapter3TechnicalpathwaystoproducingSAF����������������������������������������������������������������������������������������113.1Thestatusofproduction����������������������������������������������������������������������������������������������������������123.2Theprospectsofdevelopment���������������������������������������������������������������������������������������������������14chapter4SAFadministration,laws,andpoliciesinChina������������������������������������������������������������������������������174.1Lawsandpolicies���������������������������������������������������������������������������������������������������������������������184.2Airworthinesscertification�������������������������������������������������������������������������������������������������������20chapter5MainSAFmarketparticipantsinChina��������������������������������������������������������������������������������������235.1Producers�������������������������������������������������������������������������������������������������������������������������������245.2Suppliers�������������������������������������������������������������������������������������������������������������������������������265.3Users�������������������������������������������������������������������������������������������������������������������������������������27chapter6OutlookforSAFdevelopmentinChina����������������������������������������������������������������������������������������316.1Technicalpathways������������������������������������������������������������������������������������������������������������������326.2Productioncapacity����������������������������������������������������������������������������������������������������������������346.3Availabilityoffeedstocks���������������������������������������������������������������������������������������������������������356.4Standardsdevelopment�����������������������������������������������������������������������������������������������������������37chapter7PolicysupportholdsthekeytoSAFdevelopment���������������������������������������������������������������������������397.1Governmentdirectivesarecriticalforbreakthroughs��������������������������������������������������������������������407.2Supportivemeasuresareessential���������������������������������������������������������������������������������������������417.3Multistakeholdercollaborationiscriticalforimplementation���������������������������������������������������������427.4Chinesepolicieswillbeshapedbyavarietyoffactors������������������������������������������������������������������42chapter8Policyrecommendations�������������������������������������������������������������������������������������������������������45REFERENCES���������������������������������������������������������������������������������������������������������������������������������48INSTITUTEOFENERGY,PEKINGUNIVERSITY▏viiLISTOFFIGURESFigure1-1:Worldpassengertrafficevolution(1945-2022)����������������������������������������������������������������������������������2Figure1-2:PassengertrafficevolutioninChina(2017-2021)��������������������������������������������������������������������������������4Figure1-3:GHGemissionsfromaviationas%oftheworld’stotal�������������������������������������������������������������������������4Figure2-1:Contributionsofdifferentmeasurestoaviationemissionsreduction����������������������������������������������������9Figure2-2:IATA’sSAFtargets�������������������������������������������������������������������������������������������������������������������������10Figure3-1:ExpectationsofdifferentSAFpathwaysbetween2020and2050�������������������������������������������������������15Figure4-1:China’sregulatorysystemforcivilaviation��������������������������������������������������������������������������������������18Figure5-1:China’sSAFsupplychain��������������������������������������������������������������������������������������������������������������24Figure6-1:OpportunitiesandchallengesfordifferentSAFpathwaysinChina�����������������������������������������������������33Figure6-2:China’stheoreticalSAFproductioncapacityby2025�����������������������������������������������������������������������34Figure6-3:EstimatedaviationfuelconsumptioninChinaandtheoreticalSAFshareby2025������������������������������35viii▏INSTITUTEOFENERGY,PEKINGUNIVERSITYLISTOFTABLESTable1-1:TheCOVID-19impactonworldscheduledpassengertrafficforyear2020�����������������������������������������������3Table1-2:CO2emissionsfromaviationinChina(2016-2021)������������������������������������������������������������������������������5Table2-1:Mainemissionsreductionmeasuresbytheaviationsector�������������������������������������������������������������������8Table3-1:MainSAFproducersandproductioninEurope����������������������������������������������������������������������������������13Table3-2:MainSAFproducersandproductionintheUS�����������������������������������������������������������������������������������14Table4-1:ChinesepoliciesrelatedtothepromotionanduseofSAF��������������������������������������������������������������������19Table5-1:Chineseairlines’flightsusingSAF���������������������������������������������������������������������������������������������������28Table5-2:NumberofSAFflightsmadebyglobalairlines����������������������������������������������������������������������������������29Table6-1:PotentialavailabilityofSAFfeedstocksinChina�������������������������������������������������������������������������������36Table7-1:EU’sproposedSAFblendingshares��������������������������������������������������������������������������������������������������40Table7-2:SomedriversofChinesepoliciesoncarbonemissionsreduction��������������������������������������������������������43INSTITUTEOFENERGY,PEKINGUNIVERSITY▏ix©PhotobyBilalEL-DaouonPixabayEXECUTIVESUMMARYIn2019beforetheCOVID-19pandemicbrokeout,theglobalaviationsectorgenerated1.8%ofglobalgreenhousegas(GHG)emissions(equivalenttoapproximately1.06billiontonsofcarbonemissions).Althoughtheglobalaviationmarketshranksignifi-cantlyin2020and2021duetothepandemic,itsoverallbusinessvolumeisexpectedtocontinuetoexpandinthecomingdecades,whichmeansthatGHGemissionsfromthesectorwillrepresentanincreasingshare.Withoutextrareductionefforts,theinternationalaviationbusinessalonewillcumulativelyproduce7.0%ofglobalcarbonemissionsduringthe2020-2050period.Aviationisoneofthemostdifficultofsectorstodecarbonize,buttheglobalaviationindustryhassetanambitiousgoaltoachievenetzeroemissionsby2050.Apartfromdevelopingnewaircrafttechnologyandimprovingoperationalandinfrastructureef-ficiency,developingsustainableaviationfuels(SAF)willalsobeacrucialmeasuretoachievenetzero.AccordingtoastudybytheInternationalAirTransportAssociation,areductionof65%incarbonemissionswillbeachievedthroughSAFby2050.INSTITUTEOFENERGY,PEKINGUNIVERSITY▏xiChinaistheworld’ssecondlargestaviationmarketaftertheUS,whosesizewillcontinuetoexpandinviewofitspotentialdemandgrowth.Carbonemissionsfromaviationonlyaccountforabout1%ofChina’stotalcarbonemissionsbutgiventhefactthatChinahasalreadyreachedthelatestageofindustrializa-tion,thecarbonemissionscausedbythedevelopmentscaleoftraditionalheavyindustrieswillgraduallyreachaplateau.Itisestimatedthatcarbonemissionsfromtheseindustrieswillgodowninthenexttenyears.Bycontrast,carbonemissionsfromtheever-growingaviationindustrywillbesomethingtobereckonedwith.SAFremainsanascentmarketinChina.Onthedemandside,airlinesinmainlandChinahaveonlyconductedfourtestsofaircraftflyingonSAFsince2011,includingcommercialtestflights.Todate,therehasbeennomeaningfuldemandforSAFinChina.Onthesupplyside,onlytwocompaniesaretrulycapableofproducingSAFbutremainatthetrialproductionstage,withadesignedannualcapacityofapproximately150,000tons.ChinastilllagsbehindwesterncountrieswhichhavebeenconstantlyexperimentingwithSAFoverthepast10-plusyears,withamomentumincreasinglybuiltupoverthepastseveralyears.Globally,theSAFindustryasawholeremainshighlypolicy-driven,whichisafactorthatshapestheexternalenvironmentoftheindustry.OnedeterminingfactorthataffectsconsumptioniswhetherSAFblendingismandatedorencouraged.Somewesterngovernmentshaveeithersettargetsorintroducedplansfortheuptakeofsustainabletransportfuelsatnationalorregionallevels,andhaveintroducedspecificmandatesforSAFblending.ThesepolicysignalswilldirectlyprovideaboosttothedevelopmentofSAFandotherbiofuels.Globally,SAFconsumptionincreasedfrom6,000tonsin2016to80,000tonsin2021,butmostofsuchconsumptionhappenedintheWest.InChina,theeffortsofmanyindustries,includingaviation,toreducecarbonemissionsarecriticaltoChina’sgoalofpeakingcarbonemissionsandachievingcarbonneutrality.Accordingtothe14thFive-YearPlan(FYP)forGreenCivilAviationDevelopment,ChinaaimstoincreaseSAFconsumptionto50,000tonsby2025.Thisisapositivepolicysignal,butthisamountisnotabindingtargetandtherehasbeennoclearlydefinedpathwaytowardsthegoal.Conclusively,participantsfromacrosstheSAFsupplychaininChinaarestillinastageofcapacitybuilding.MarketdemandforSAFwillcertainlybestimulatediftheChinesegovernmentsendsstrongerpolicysignalsinthefuturetoincentivizetheaviationindustrytoreducecarbonemissions.Moredemandwillnaturallyleadtogreatersupply.Theoreti-cally,whenChina’sexistingandplannedproductioncapacityforHVOisretrofittedtoproduceSAF,it’sestimatedthatthecountry’stotalproductioncapacitywillreach2.05milliontonsby2025whencombinedwiththeexistingSAFcapacity.Bythen,totalSAFsupplywillaccountfor4.5%ofChina’stotalaviationfuelconsumption.InChina,feedstocksthatcanbeusedtoproduceSAFarewide-spreadandavailableinabundance,whichensuresthesupplyofSAF.However,manyuncertaintiesremainregardinghowtostrengthenthedevelopmentofdifferenttechnicalpathwaysandhowtoincentivizesupplychaincollaborationandbetterdesignstomakeSAFproductsmoreaffordable.Generally,theSAFindustryfacesbothchallengesandoppor-tunitiesinChina.IfinternalandexternalfavorableconditionsarefullyleveragedtounleashthepotentialofSAFinreducingcarbonemissions,theindustrywillbeastrongboosttoChina’sendeavortoreducecarbonemissionsfromaviation,peakcarbonemissions,achievecarbonneutralityandstrengthenenergysecurity.xii▏INSTITUTEOFENERGY,PEKINGUNIVERSITYABBREVIATIONS&GLOSSARYASTMAmericanSocietyforTestingMaterialsATAGAirTransportActionGroupCORSIACarbonOffsettingandReductionSchemeforInternationalAviationHVOHydrogenatedVegetableOilIATAInternationalAirTransportAssociationLCALifecycleAssessmentICAOInternationalCivilAviationOrganizationLCFSLowCarbonFuelStandardIEAInternationalEnergyAgencyISCCInternationalSustainability&CarbonCertificationISOInternationalOrganizationforStandardizationREDRenewableEnergyDirectiveRFSRenewableFuelStandardRSBRoundtableonSustainableBiofuelsRTFCRenewableTransportationFuelCertificationRPKRevenuePassengerKilometresRTKRevenueTonneKilometresSAFSustainableAviationFuelsUNFCCUnitedNationsFrameworkConventiononClimateChangeWEFWorldEconomicForumGtGigatonne(1billiontonnes)MtMegatonne(1milliontonnes)INSTITUTEOFENERGY,PEKINGUNIVERSITY▏xiii©PhotobyPaulHonUnsplash1THEGLOBALAVIATIONINDUSTRYANDCARBONEMISSIONSREDUCTIONSinceearly2020,theglobalaviationindustryhasbeenexperiencingadifficultperiod.TheCOVID-19pandemichasresultedinanunprecedenteddeclineinpassengertraf-fic.By2022,theaviationmarkethasstartedtorecoverthankstoimprovedcontrolofthepandemicandrelaxedtravelrestrictions.Whilestrugglingtorecover,theaviationsectoralsofacesthechallengeofcontrollingitsowncarbonemissions.INSTITUTEOFENERGY,PEKINGUNIVERSITY▏21.1Updatesoftheaviationindustrydeve­lopment1.1.1AslowrecoveryfromtheCOVID-19pandemicworld-wideAccordingtotheInternationalCivilAviationOrganization(ICAO)1,2,3,globallyairlinescarried2,300millionpassengersin2021,anoverallreductionof49%from2019levelsandamodestincreasecomparedwithareductionof60%in2020(Figure1-1).Figure1-1:Worldpassengertrafficevolution(1945-2022)5001,0001,5002,0002,5003,0003,5004,0005,0004,5000194519461947194819491950195119521953195419551956195719581959196019611962196319641965196619671968196919701971197219731974197519761977197819791980198119821983198419851986198719881989199019911992199319941995199619971998199920002001200220032004200520062007200820092010201120122013201420152016201720182019202020212022TotalpassengersNumberofPassengersCarried(million)DomesticpassengersDeclineinworldtotalpassengersCOVID-19pandemic2022vs.2019−21%to−24%Internationalpassengers2021vs.2019−49%2020vs.2019−60%OilcrisisIran-lraqwarGulfcrisisAsiancrisis9/11terroristattackSARSFinancialcrisisSource:ICAO,June2022©PhotobyPublicDomainPicturesonPixabay3▏INSTITUTEOFENERGY,PEKINGUNIVERSITYComparedwith2019levels,theworldrespectivelyreportedaUSD324billionlossandaUSD372billionlossofgrosspassen-geroperatingrevenuesofairlinesin2021and2020(Table1-1).Table1-1:TheCOVID-19impactonworldscheduledpassengertrafficforyear2020Comparedto2019levels202020212022(estimated)Seatsofferedbyairlines50%40%15%～18%Reductionofpassengers(million,%)2,703(down60%)221（down49%）921～1,079（down21%～24%）Lossofgrosspassengeroperatingrevenuesofairlines(USDbn)372324133～155Source:ICAO,EffectsofNovelCoronavirusonCivilAviation:EconomicImpactAnalysis,June2022Sluggishbusinessperformanceanddecliningrevenueshavegeneratedadverseimpactsontheaviationindustryinseveralareas4.Itremainsuncertainwhetherairlineswillbewillingtotakefurtherstepstoreducecarbonemissionsinthiseconomiccontext.Particularly,thesubstitutionofSAFforfossilfuelsisalsochallengingforairlines,asitwillcertainlyincreasetheirenergycostsintheshortterm.1.1.2ConsiderablefluctuationsintheChinesemarketduetothepandemicDuetothepandemic,thenumberofairpassengersplummetedin2019comparedwith2019levelsandslightlyincreasedin2021.In2020,thenumberofpassengerscarriedbyairlinestotaled417.7782millionnationwide,areductionof36.7%from20195.In2021,thefigureroseto440.5574million,anincreaseof5.5%from2020(Table1-2)6.In2020,Chineseairlinesreportedacargotransportvolumeof79.851billiontonkilometers(tkm),adecreaseof38.3%comparedwith2019--Domesticaircargotrafficdroppedby29.2%andinternationalaircargotrafficplummetedby54.5%.In2021,China’scargotransportvolumereached85.675billiontkm,up7.3%from2020,withanincreaseof9.1%indomesticaircargotrafficandagrowthof2.3%ininternationalaircargotraffic.INSTITUTEOFENERGY,PEKINGUNIVERSITY▏4Figure1-2:PassengertrafficevolutioninChina(2017-2021)PassengertransportvolumeGrowthoverthepreviousyear5.526.126.604.184.4113.0%10.9%7.9%-36.7%5.5%-40%-30%-20%-10%0%10%20%30%0123456720172018201920202021100millionpeopleSource:ChinaStatisticalReportonCivilAviation,CAAC,May20221.2Progressoftheaviationindustryincarbonemissionsreduction1.2.1TheaviationindustryfacesformidablechallengestoreduceGHGemissionsTheaviationindustrygenerated1.8%ofglobalGHGemissions(whichtranslatesintoanequivalentof1.06billiontonsofCO2accordingto2019data),including1.1%frominternationalflightsand0.7%fromdomesticflights(Figure1-3)7.Figure1-3:GHGemissionsfromaviationas%oftheworld’stotalDomesticflights,0.7%Railway,0.4%Watertransport,0.3%Miscellaneous,0.9%Internationalflights,1.1%Internationalseatransport,1.3%Landtransport,10.0%Agriculture,forestryandotherformsoflandutilization,22.0%Industry,24.0%Electric&thermalpower,23.0%Construction,5.6%Otherenergysources,10.0%Transport，14.7%Source:IPCC,MitigationofClimateChange2022,April20225▏INSTITUTEOFENERGY,PEKINGUNIVERSITYThecontinuedgrowthoftheaviationsectorinthefutureisexpectedtoresultinmoreGHGemissionsthatwillrepresentanexpandingshare.AccordingtotheReportontheFeasibilityofaLong-termAspirationalGoal(LTAG)8forInternationalCivilAviationCO2EmissionsReductionsthatwasreleasedbytheICAOCommitteeonAviationEnvironmentalProtectioninMarch2022,cumulativeCO2emissionsfrominternationalaviation—withoutextraefforts—willaccountfor7.0%oftheworld’stotalinthecontextoflimitingglobalwarmingto1.5°C.Thesharecanbeshrunktoarangebetween3.1%and5.6%ifdifferentlevelsofeffortsaremade.Chinaisoneofthemajoraviationmarketsintheworld,withanever-growingbusinessvolumethatwillalsoleadtomoreandmorecarbonemissions(despiteareductionincarbonemissionsduetoabusinessslumpcausedbytheCOVID-19pandemic,seeTable1-2)9.LikematuremarketssuchasEuropeandNorthAmericaandotheremergingmarkets,Chinaalsofacesthechallengeofreducingcarbonemissionswhilemaintainingbusinessgrowthintheaviationindustry.Table1-2:CO2emissionsfromaviationinChina(2016-2021)IndicatorUnit201620172018201920202021AircargotrafficBilliontkm96.25108.31120.65129.2779.8585.68Aviationfuel10efficiency10,000tons/100milliontkm2.932.932.872.853.163.09AviationfuelconsumptionThousandtons28,20031,73034,63036,84025,23026,470CO2emissionsThousandtons88,83099,960109,070116,05079,48083,390Note:CO2emissionsarecalculatedbasedontheaviationfuelconsumptionthatisworkedoutbasedontotalaircargotrafficandaviationfuelefficiencydatadisclosedbyannualstatisticalreportsofChinaoncivilaviationdevelopment(carbonemissionsfactor:3.15kgCO2/kg).1.2.2TheaviationindustryhasdevelopedaspirationalplanstoreducecarbonemissionsInviewoftheeffectsofaviationonglobalcarbonemissions,theaviationindustryhasdevelopedavoluntaryemissionsreductiontarget.TheICAOAssemblyatits41stSessioninOc-tober2022adoptedacollectivelong-termglobalaspirationalgoal(LTAG)ofnet-zerocarbonemissionsby205011,12.AsofJuly2022,ofthe193ICAOmemberstates,133states,representing98.16%ofglobalRTK,havevoluntarilysubmittedtheirStateActionPlantoICAO13.Anumberofairlineshavealsopublishedtheircarbonneutralityplans,joinedbysomeaircraftmanufacturersandpartssuppliersthatalsofollowedsuittoreleasetheirownplansinsupportofthesector’sefforttoreducecarbonemissions14.INSTITUTEOFENERGY,PEKINGUNIVERSITY▏6In2021,theIATA77thAnnualGeneralMeetinghasapprovedaresolutionfortheglobalairtransportindustrytoachievenet-zerocarbonemissionsby2050,whichisabigstrideforwardcomparedwiththepreviousaimofloweringcarbonemissionsto50%of2005levelsby2050.Tobeabletoservetheneedsofthetenbillionpeopleexpectedtoflyin2050,atleast1.8billiontonsofcarbonmustbeabatedinthatyear.Moreover,thenetzerocommitmentimpliesthatacumulativetotalof21.2billiontonsofcarbonwillbeabatedbetweennowand205015.©PhotobyHarrisonQionUnsplash2THEROLEOFSAFINAVIATIONEMISSIONSREDUCTIONINSTITUTEOFENERGY,PEKINGUNIVERSITY▏82.1MainmeasuresadoptedbytheaviationindustrytoreduceemissionsTheaviationsectorcanreducecarbonemissionsthroughavarietyofmeasures,includingdevelopingnewaircrafttechnologytoenhancefuelefficiency,usingelectricandhydrogen-poweredaircraft,improvingoperationalandinfrastructureefficiency,andflyingonSAF.Forthosecarbonemissionsthatcannotbeeliminatedbyitself,theindustrycanalsooptforoffsettingplansandcarboncapture,utilization,andstoragetechnologies(CCUS)(Table2-1)16,17,18,19.Table2-1:MainemissionsreductionmeasuresbytheaviationsectorMeasureExamplesofactionMainperiodsofcontributionNewtechnologies•Aircraftandenginemanufacturerscontinuetoimproveairframedesignsandpropulsionsystems,includingoptimizingstructuraldesignsandusinglight-weightmaterialsandnewcombustionchambers;•Developfullyelectric,hybridandhydrogen-poweredaircraft,whosecommercialorexperimentaluseisenvisagedbeyond2030.2010-2050Improvedoperationalandinfrastructureefficiency•Governmentsandairnavigationserviceproviders(ANSP)removeinefficienciesinairtrafficmanagementandinfrastructure;•Developmoreaccurateflyingplansandshortenflighttimetoreducefueluse;keepflightsatoptimalheightstomaximizefuelefficiency;•Airportsuselow-emissionvehiclesandinstallfacilitiespoweredbysolarandotherrenewableenergyatterminalstofurtherreducecarbonemissions;•Theadoptionofcollaborativedecisionmaking(A-CDM)toreducecongestionanddelaythatwillresultinmorefuelconsumption.2020-2050Sustainableaviationfuels(SAF)•FuelsuppliersprovidecostcompetitiveSAFonalargescale;•CertifyandapprovemoretechnicalpathwaystoproducingSAFtoaccelerateSAFdevelopmentanduptake;•AirportoperatorsprovideneededinfrastructuretosupplySAFinamoreaffordableandefficientway.2025-2050Carbonoffsetting,capture,utiliza-tion,andstorage•Airlinesinvestinoffsettingschemestooffsetcarbonemissionsproducedbythemselves;•Airlinesintroducevoluntaryoffsettingprogramsforcorporateclientstoenablethemtooffsetorreducecarbonemissionsassociatedwiththeirbusinesstravels;•Airportsinvestinoffsettingschemeslikeairportcarbonaccreditation,andbuildcertifiedgreenterminals.2025-2040Source:IATA,ATAGandICAO9▏INSTITUTEOFENERGY,PEKINGUNIVERSITY2.2SAFwillbethemostimportantreduc-tionmeasureAmongthesemeasures,developingnewaircrafttechnologyandimprovingoperationalandinfrastructureefficiencywilltaketimeandcallforcontinuousimprovement.Overthepast10-plusyears,fleetfuelefficiencyhasbeensteadilyontherise,butoptimizationactionsinconventionaltechnicalfieldswillonlyproducelimitedeffectsintermsofreducingcarbonemissions.Inthefuture,themostimportantmeasureforreducingcarbonemissionsistoexpandtheuseofSAF.Figure2-1:ContributionsofdifferentmeasurestoaviationemissionsreductionNewtechnologiesFueleciency&InfrastructureimprovementsCO2compensation(CORSIA)Anaverageimprovementinfueleciencyof1.5%p.a.from2009to2020SustainablealternativefuelsNoactionIATAtarget20052010CO2emission2020203020402050XABCEmissionreductionleverX1234AcaponnetaviationCO2emissionsfrom2019(carbon-neutralgrowth)Areductioninnetaviationemissionsof50%by2050,relativeto2005levelsSource:IATA,ATAG20,21,WorldEconomicForum22SAFisaliquidfuelthatcanbeusedincommercialflights.Comparedwiththecurrentmainstreamaviationfuels(whicharemostlypetroleum-based),SAFcanreduceCO2emissionsby80%orevenmore.Theycanbeproducedfromvariousfeedstocks,includingwasteoilandfats,agricultural,forestryandmunicipalwastes,andnon-foodcrops.TheycanevenbeproducedviasynthesizinghydrogenandcapturedCO2fromtheair.SAFaresustainableinthatacrosstheirlifecycles,carbonemittedbyfeedstocksduringgrowthandsynthesisoutweighscarbonemittedfromuse.Moreover,SAFfeedstockdoesnotcompetewithfoodcropsorwatersuppliesandthuswillnotcontributetoforestdegradationorbiodiversityloss.Tomeetsustainabilitycriteria,SAFproductsaregenerallyrequiredtopasscertificationbyindustry-recognizedorganizations.Intechnicalandsafetyterms,SAFproducts,oncecertifiedbyrelevantstandards(likeASTM-D7566),willbedeemedashavingmeetthecriteriatoblendwiththeexistingpetroleum-basedaviationfuelswithoutextensiveengineandinfrastructuremodifications.Currently,themaximumSAFblendinglimitis50%.However,itisnottechnicallychallengingtorealize100%SAF.Forexample,Boeingoncetestedaflightusing100%SAFin2018.2.3ItiscriticaltodramaticallyincreaseSAFproductionandconsumptionTounlockthepotentialofSAF,itisessentialthatSAFconsumptionbedramaticallyincreasedfrom63millionlitersINSTITUTEOFENERGY,PEKINGUNIVERSITY▏10(approximately50thousandtons)in2020and100millionliters(approximately80thousandtons)in2021tonearly7.9billionliters(approximately6.3milliontons)in2025andfurtherto449billionliters(approximately358.3milliontons)in205023(Figure2-2).Figure2-2:IATA’sSAFtargets0.056.318.3572.621822763582020202520302035204020452050%oftotalfueldemand0.03%2%5.2%17%39%54%65%SAFdemand(Milliontons)In2050,SAFwillaccountfor65%ofaviation’scarbonmitigation.SAFconsumptionwillincreasefrom50,000tonsin2020to6.3milliontonsin2025andfurtherto358milliontonsin2050.Source:IATA,2021Thispaceofgrowthischallengingfortheaviationsector,butitisachievable.ThepastfiveyearshavealreadywitnessedsomeprogressintheutilizationofSAFinthesector.Today,SAFisalreadyavailableatanumberofairports,includingOsloAirportinNorway,StockholmAirportinSweden,andLosAngelesInternationalAirportandSeattleAirportintheUS24,25.3TECHNICALPATHWAYSTOPRODUCINGSAFAsofOctober2021,atotalofninetechnicalpathwaystoSAFproductionhavebeenapprovedbytheASTMInternational,includingsevenpathwaysapprovedbyASTMD7566andtwopathwaysapprovedbyASTMD165526,27,28.Thisreportwillmainlyexaminethreeoftheninepathways,includingtheHydroprocessedEstersandFattyAcids(HEFA)process,theGasification/Fischer-Tropsch(G+FT)processandtheAlcoholtoJet(AtJ)process,aswellasanunapprovedpathway,thePowertoLiquid(PtL)process.Thesefourtechnicalpathwaysarewidelyconsideredbytheaviationindustryasmostpromisingandarebeingcloselywatchedbymajorfuelsuppliersworldwide.INSTITUTEOFENERGY,PEKINGUNIVERSITY▏123.1ThestatusofproductionCurrently,EuropeandNorthAmericaremainthemajorcon-sumersandproducersofSAF.TheHEFApathwaydominatestheexistingandnewproductioncapacitiesdisclosedbymajorEuropeanproducers,despitethefactthatG+FT,AtJandPtLarealsoadoptedinsomenewproductioncapacities.IntheUS,mostofSAFproducersoptfortheAtJpathway.InEurope,atleasteightmanufacturingfacilitieshavebeenbuilttoproduceSAF,inadditiontomorethan20neworexpansionprojectsthatarebeingplanned(includingfivedemonstrationprojects).By2025,SAFproductionwilllikelyreach7.2milliontonsunderHEFA,700thousandtonsunderG+FT,400thousandtonsunderAtJ,and200thousandtonsunderPtL(Table3-1).Theoretically,ifstimulatedbystrongexternalpolicyincentives,thesecapacitiescanproduceuptothreemilliontonsofSAFayear.Withoutclearpolicysignals,however,thesecapacitiesmaybemostlyutilizedtoproducebiofuelsusedforroadtransport29.©PhotobyHonglinShawonUnsplash13▏INSTITUTEOFENERGY,PEKINGUNIVERSITYTable3-1:MainSAFproducersandproductioninEuropeSupplierCountrySiteTech.Start/ExpansionTotalfuelcapacity(Mt./yr.)Existingfacilities/Expan-sionsNesteFinlandPorvooHEFA–0.4NesteNetherlandsRotterdamHEFA–1.3UPMFinlandLappeenrantaHEFA–0.1TotalEnergiesFranceLaMedeHEFA–0.5CepsaSpainSanRoqueHEFA–0.1RepsolSpainCartagenaHEFA20230.2ENIItalyVeniceHEFA20240.4PreemSwedenGothenburgHEFA20251.0NewprojectsEnerkemNetherlandsRotterdamG+FT2021<0.1ColabitoilSwedenNorssundetHEFA20210.5ENIItalyGelaHEFA20210.5ST1SwedenGothenburgHEFA20220.2KaidiFinlandKemiG+FT2022<0.1SkyNRGNetherlandsDSL01HEFA20230.1SunfireNorwayNordicBluePtL2023<0.1CapheniaGermanyDresdenPtL2023<0.1TotalEnergiesFranceGrandpuitsHEFA20240.2SkyNRG/LanzaTechTBDFLITEAtJ20240PreemSwedenLysekilHEFA20240.7NesteNetherlandsRotterdamHEFA20251.0VelocysUKAltaltoG+FT20250.1LanzaTechUKWalesAtJ20250.4UPMFinlandKotkaG+FT20250.5FulcrumUKStanlowG+FT20250.1SynkeroNetherlandsSynkero†PtL20270.1EngieFranceNormandy‡PtLTBDTBDHEFAG+FTPtLAtJSource:AnalysisbasedonWorldEconomicForum(2020),“CleanSkiesforTomorrow:SustainableAviationFuelsasaPathwaytoNet-ZeroAviation”andpressreleases.Note:Listisnotexhaustive.Timelinesassumedelayforprojectsannouncedpre-COVID-19.Pilot/demonstrationfacilitiesnotcountedtowardsfutureproductivecapacityestimates.Expansionorre-configurationofexistingsites.Mapdoesnotincludeco-processingfacilities–e.g.ConocoPhillipsplantinCork,Ireland&GalpEnergeiainSines,Portugal.JointventureoftheFLITEconsortium,ledbySkyNRGandLanzatech,withfundingsupportprovidedfromtheEUH2020programme.Thefinallocationoftheplannedsiteisyettobeannounced.†LedbySynkero,aprojectdevelopmentcompany,incollaborationwithpartnersSkyNRG,thePortofAmsterdam,RoyalSchipholGroup,andKLM.Productionissettocommenceatlowlevelsafter2025soisnotincludedinthesubsequentfiguresinthetext.‡JointventurebetweenEngie,Safran,ADP,Airbus,Sunfire,andAirFrance-KLM.Theyearofoperationandexpectedoutputisyettobeannounced.INSTITUTEOFENERGY,PEKINGUNIVERSITY▏14IntheUS,thefederalgovernmentaimsproducethreebilliongallons(approximately9.06milliontons)ofSAFby2030.Accordingtothepathwaysdisclosedbysomemajorsuppliers,AtJisthemostcommonpathway,followedbyG+FTandHEFA.Forexample,LanzaJetplanstoproduceonebilliongallons(approximately3.02milliontons)ofSAFperyearby2030byAtJprocessing(Table3-2)30.Table3-2:MainSAFproducersandproductionintheUSSupplierTech.YearTotalfuelcapacityMt./yr.LanzaJetAtJ20303.0WorldEnergyHEFA20240.5GevoAtJ20250.5FulcrumG+FT20220.1VelocysG+FT-0.9HEFAG+FTAtJSource:TheWhiteHouse3.2TheprospectsofdevelopmentAmongthefourpathways,HEFAiscurrentlythemostcom-merciallyviableprocess,whereasG+FTandAtJaresupposedtograduallyshiftfromdemonstrationtocommercialization.PtLremainsatthenascentandexperimentalstage.HEFAisexpectedtocontinuetomaintainitsmarketdominancebefore2030,butitsproductioncapacitywillnotgrowrapidlyinviewofthelimitedsupplyoffeedstocks.FTandAtJareexpectedtoenjoyconstantlyexpandingmarketsharesbetween2030and2050thankstotheirgrowingtechnologicalmaturity,decliningcostsandfeedstockdiversity(agriculturalandforestrywaste,municipalsolidwasteandindustrialwaste,etc.).ThePtLpathwaystillhasalongwaytogobeforecommercial-ization,butcomparedwithtraditionalfuels,SAFproducedbyPtLprocessingwilloffergreatpotentialforemissionsreductionandproducersalmostdon’thavetoworryabouttheavailabilityoffeedstocks.Therefore,ifbackedbyfavorablepolicies,largermarketsharesandtechnologicalbreakthroughsthatwillsignificantlyhelpreduceitscosts,PtLwouldbecomethepredominantrouteinthemediumandlongterm(Table3-1).15▏INSTITUTEOFENERGY,PEKINGUNIVERSITYFigure3-1:ExpectationsofdifferentSAFpathwaysbetween2020and2050HEFAG+FTAtJPtLR&DOperationR&DOperationR&DOperationR&DOperation2020—20302030—20402040—2050Note:1)Thewidthofbarsintheoperationperiodrepresentsdifferentpathways’levelofdominance.2)TheestimationismadebasedontheresearchofATAG,IATAandWEF.INSTITUTEOFENERGY,PEKINGUNIVERSITY▏16©PhotobyBottleinonPixabay4SAFADMINISTRATION,LAWS,ANDPOLICIESINCHINAINSTITUTEOFENERGY,PEKINGUNIVERSITY▏184.1LawsandpoliciesChinamanagesthequalityofaviationfuelsthroughadministrativelicensing.InJuly2004,theDecisionoftheStateCouncilontheAdministrativeLicensingofItemsThatRequireAdministrativeApprovalsetforththatcivilaviationfuelsuppliersshallobtainairworthinessapprovalandfueltestingorganizationsshallalsohaveapprovalfromtheCivilAviationAdministrationofChina(CAAC).InApril2005,CAACreleasedtheRegulationsonAirworthinessManagementofCivilAviationFuels(CAAR-55).From2006,airworthinesscertificationauthoritiesforcivilaviationstartedtocertifyaviationfuelsuppliersandtestingorganizations31.InMarch2010,theAviationFuel/OilandAerochemicalsAirworthinessCertificationCenterofCAACwasestablished.4.1.1RegulatorysystemChina’sregulatorysystemforcivilaviationiscomposedofthreelevels:laws,administrativerules,andcivilaviationregulations.ThefirstlevelistheLawofthePeople’sRepublicofChinaonCivilAviation,whichisthebasiclawofChinagov-erningtheorganizationandimplementationofflyingactivitiesaswellasthebasisforthedevelopmentofdirectives,rules,regulations,andpoliciesbyaviationagencies.Thesecondlevelisadministrativerules,throughwhichaviationfuelsareapprovedthroughadministrativelicensing.Thethirdleveliscivilaviationregulations.CAACisresponsibleforintroducingtheChinaCivilAviationRegulations(CCAR).Today,airlinesandotheraviationcompaniesregulatedbyCAAChaveallestablishedandimprovedtheirmanagementsystemsinaccordancewithCAARrequirements.InApril2005,theairworthinesscertificationdepartmentofCAACreleasedtheRegulationsontheAirworthinessofCivilAviationFuels(CCAR-55),whichstandardizestheairworthinessmanagementofaviationfuels32.TheProcedureforCertifyingtheAirworthinessofCorporateSuppliersofCivilAviationFuels(AP-55-01)thatwaspromulgatedinFebruary2007providedfurtherclarityontheprocedureofcertifyingtheairworthinessofaviationfuels.Figure4-1:China’sregulatorysystemforcivilaviationLawonCivilAviationAdministrativerulesCivilaviationregulationsAdministrativedocumentsAdvisorycircularsAdministrativeproceduresOperatingmanualsAnnouncementsNormativedocumentsChinaCivilAviationTechnicalStandardOrder(CTSO)CCARisthemostexpansiveandnumerousinthewholecivilaviationsystem.19▏INSTITUTEOFENERGY,PEKINGUNIVERSITY4.1.2RelevantpoliciesFrom2010,CAACstartedtoplacemoreemphasisontheR&DandutilizationofSAFandhasdefinedSAFasastrategicenergyreservefordecarbonizingtheaviationindustry.Overthepasttenyears,CAAChastakenavarietyofmeasuresforthispurpose,includingestablishingacoordinationmechanism,strengtheningstandardsdevelopment,supportingdomesticairlinestomakeSAF-poweredtestandcommercialflights,andparticipatingininternationalcooperation.SomepoliciesrecentlypromulgatedbytheStateCouncilandCAACalsocoverthedemonstrativeandcommercialuseofSAF(Table4-1).TheChinesegovernmentismoreencouragingofbiodieseldevelopmentandhassuccessivelyintroducednearly20laws,plans,aswellasindustrial,fiscalandtaxpoliciesandproductstandards.TheMinistryofFinance(MoF)andtheStateAdministrationofTaxation(SAT)havealsoreleasedanumberofofficialdocumentstoprovidetaxbenefitsforbiodiesel.Table4-1:ChinesepoliciesrelatedtothepromotionanduseofSAFDateofissueIssuerPolicytitleDescriptionOct.2021StateCouncilActionPlanforPeakingCarbonEmissionsby2030PushforthesubstitutionofadvancedliquidbiofuelsandSAFfortraditionalfuelsandimprovefuelend-useefficiency.Jan.2022CAAC14thFive-YearPlan(FYP)forGreenCivilAviationDevelopmentAchievebreakthroughsinpromotingthecommercialuseofSAF,withanaimtoraiseSAFconsumptiontoover20,000tonsin2025andcumulativelyto50,000tonsduringthe14thFYPperiod;establishanexpectedgoalforreducingfueluseandreducingcarbonemissions—reducingfuelconsumptionpertonkilometerforairtransportfleetto0.293kgandCO2emissionspertonkilometerforairtransportto0.886kg33,34.May2022NationalDevelop-mentandReformCommission(NDRC)14thFYPforBioeconomyDevelopmentThePlanpointsoutthatareaswithgoodconditionsareencouragedtopromoteandpilottheuseofbiodieselandadvancethedemonstrativeuseofaviationbiofuels35.Jun.2022NDRCandNationalEnergyAdministration(NEA),etc.14thFYPforRenewableEnergyDevelopmentScaleupeffortstodevelopnon-foodliquidbiofuelsandsupporttheR&Dandpromotionofadvancedtechnologyandequipmentforbiodieselandaviationbiofuelproduction.Source:compiledbasedonpoliciesreleasedbythegovernment.INSTITUTEOFENERGY,PEKINGUNIVERSITY▏204.2Airworthinesscertification4.2.1ManagementsystemChina’sairworthinessmanagementsystemiscomposedoftheCAACDepartmentofAircraftAirworthinessCertification(DAAC)andairworthinesscertificationdivisionsofregionalbureaus,withthesupportofdesignatedairworthinessrepresentatives,technicalcenters,certificationcenters,researchinstitutionsandtrainingorganizations36.China’smanagementsystemforcertifyingtheairworthinessofaviationfuelsisdifferentfromthatofwesterncountries.AsChinadoesnothaveASTM-likeindustryassociations,whenSinopecNo.1AviationBiofuelwascertified,itwascharacterizedasoneofthemost-oftenusedaircraftpartsandthecertificationwasconductedbyreferencetothecertificationofpartsandinaccordancewiththeCTSOA(ChineseTechnicalStandardOrderAuthorization)certification37.Moreover,qualitymanagementcoverstheentirecontinuumofaviationbiofuels,fromdesigntoproduction,storage,transportation,andinto-planeservice.ThemilestoneeventofSinopecNo.1AviationBiofuelhasbasicallyresultedinthecreationofaSAFairworthinesscertificationsystem.InFebruary2014,SinopecZhenhaiRefining&ChemicalCompany(ZhenhaiRefining)receivedthefirstCTSOAcertificate,anairworthinesscertificate,fromCAAC,signalingthecommercialuseofadomesticallyproducedaviationbiofuel.Tograntauthorization,DAACformedacertificationboardcomposedofexpertsfromairworthiness,engine,refining,aviationfuelandothertechnicalfields,aswellasareviewgroupcomprisingexpertsfromtheAviationFuel/OilandAerochemi-calsAirworthinessCertificationCenterofCAAC(FCCC)38.4.2.2CertificationprocessAirworthinesscertificationofaviationbiofuelsincludesthreeparts:designcertification,producercertificationandpost-certifi-cationsupervision.Designcertificationreferstothecertificationoffuelperformance,processandotherrelatedactivitiestoconfirmthatthemanufacturingprocess,performanceandothertechnicalindicatorsofthefuelconformtoCTSO-2C701requirements.ProducercertificationalsoreferstoCTSO-2C701foradocumentreviewandasiteconformanceassessment.Post-certificationsupervisionmeansthatafterthecertificateisgranted,CAACwillappointanauthorizedrepresentativeresponsibleforday-to-daysupervisionofthecertificate-holdingorganization,withinthescopeofresponsibilitiesandauthoritydefinedbyCCAR-18339.InChina,airworthinesscertificationisconductedinaccordancewithregulatoryproceduresandtechnicalstandards.Generally,theproducerisrequiredfirsttosubmitanapplicationintheAMOSsystem.AftertheapplicationisprocessedbyDAAC,FCCCwillbeauthorizedtoformareviewgroup.Iftheaviationbiofuelpassesthecertification,thecompanyproducingthebiofuelwillbeawardedaCTSOAcertificate.ThecertificationofthebiofuelcompanywillonlyapplytoamanufacturingprocessthatiscapableofmassproductionandwillnotcoverlaboratoryR&Doraprocessthatremainsatthesmall-scalestage.ProcessesarenotlimitedtothoseapprovedbyASTM,suchasHEFA,FTandAtJ.ThetimetakentocompletecertificationdependsonwhethertheprocessisoneofthesevenpathwaysapprovedbyASTM-D7566.BeforeCAACissuedtheCTSOAcertificatetoZhenhaiRefining,theaviationbiofuelproducedbythecompanyhasundergoneatwo-yearexaminationagainstCTSO-2C701.Theexaminationcoveredtwoparts:designandproductionandthescopeofcertificationincluded:manufacturingprocess,qualityassurancesystem,physicalandchemicalproperties,particularproperties,materialcompatibility,enginebenchtestandflighttestvalida-tion40.4.2.3RelevantstandardsStepbystep,Chinahasdevelopeditsownsetofstandardsandcertificationsystemforaviationbiofuelmanufacturingprocessesandperformancemeasurement.Currently,aviationbiofuelremainscharacterizedasa“part”ofaircraftforthepurposeofairworthinesscertification.Chinahasnotdevelopedstandardsforsustainability.FCCCandsomeacademicinstitutionsareconductingresearchonstandardsandmethodologiesforsustainabilitycertification.21▏INSTITUTEOFENERGY,PEKINGUNIVERSITYIn2011,BoeingandAirChinacollaboratedtocompletethefirstsuccessfulSAFpassengerflighttest.Beforethetest,SAFairworthinesswascertifiedbyDAAC.Ttransportation,storageandinto-planeservicewereallcertifiedinaccordancewiththeapplicablerulesoftheAirworthinessManagementofCivilAvi-ationFuel,the55thpartoftheChinaCivilAviationRegulations(CCAR).Specifically,theseactivitieswerecarriedoutaccordingtotheStandardofCivilAircraftRefuelingProcedure(MH/T6005)andtheCommercialAviationFuelQualityControl&OperatingProcedures(MH/T6020).In2013,CAACdevelopedtheCivilAviationJetFuelContainingSynthesizedHydrocarbons(CTSO-2C701)41.ThestandardprescribesthataviationbiofuelsshallbeapprovedintheformofCTSOA,includingbiofuelsproducedbyHEFAandG+FTprocessing.SinopecNo.1AviationBiofuelwascertifiedthisway.In2018,ChinaamendedtheNo.3JetFuel(GB6537)andincludedintoitAppendixesBandCthatrespectivelylisttechnicalrequirementsandtestingmethodsforFT-SPKandHEFA-SPK.In2022,FCCCassistedDAACinrevisingCTSO-2C701.ThenewCTSO-2C701aincludessevenprocesseslistedinASTMD7566anddrawsonthe“qualificationprocess”and“fasttrack”ofASTMD4054.Currently,anyaviationbiofuelmanufacturermustapplyforairworthinesscertificationthroughtheAMOSsystem42.CertificationwillbeconductedbyFCCCinaccordancewithCTSO-2C701aandaCTSOAcertificatewillbeawardediftheaviationbiofuelmanufacturingprocessisapproved.Accordingtocurrentrequirements,aviationbiofuelmustbeblendedwithconventionalaviationfuel,withamaximumblendlimitof50%(whichappliestoHEFAandFTprocesses).IfanaviationfuelpendingcertificationistobeusedinChina,itshallbeblendedwithaNo.3jetfuelthatconformstotheGB6537standardbeforecertification.Ifitistobeusedinothercountries,itshallbeblendedwithJetA-1thatconformstoASTMD1655orDEFSTAN91-91beforecertification.Asforstandardsonbiodiesel,ChinahasintroducednationalstandardsB5DieselFuelsandAutomobileDieselFuels(StageVI)43.Moreover,relevantindustrystandards,suchasHydro-treatedVegetableOil(HVO)(NB/T10897-2021)andFeedstockofBiodiesel(NB/T13007-2021),havealsobeenapprovedbyNEAinDecember2021andstartedtobeenforcedonJune22,202244.BiodieselproductsproducedinChinathataretobeexportedtoforeigncountrieswillhavetoobtainsustainabilitycertificatesrequiredbydestinationmarkets,suchasRSBandISCCcertificates.INSTITUTEOFENERGY,PEKINGUNIVERSITY▏22©PhotobylynyingJuonUnsplash5MAINSAFMARKETPARTICIPANTSINCHINATheSAFmarketisstillinitsinfancyinChinaandbasicallyoperatesinasimilarwaytotheconventionalaviationfuelmarketintermsofproduction,sales,utilization,regulation,andotherrelevantareas.Comparedwithconventionalfuels,SAFcanbeproducedusingabroadervarietyoffeedstocks.Therefore,therearemorediverseproducersandfeedstocksuppliers(Figure5-1).INSTITUTEOFENERGY,PEKINGUNIVERSITY▏24Figure5-1:China’sSAFsupplychainProducersSuppliersAirlinesCNAFFeedstocksuppliersChina’sSAFsupplychainZhenhaiRefiningHaixinLYZYECOZhongdiyouShougangLanzaTech……AirChinaChinaSouthernChinaEasternHainanAirlinesCathayPacific……5.1ProducersToday,thereisonlyalimitednumberofcompaniescapableofproducingSAFinChina,butliketheirwesterncounterparts,Chinesecompaniesthatproducebiodiesel(especiallythosethatproduceHVO)arealsoabletotransitiontoSAFproductionbyretrofittingtheirproductionlinestosuitmarketneeds45.AsofJune2022,HVOproductioncapacitiesthatwereeitherinoperationorbeingplannedinChinatotaled2.35milliontonsayear;operationalandplannedSAFproductioncapacities,hostedbytwoplantsandmanufacturingfacilities,totaled150thousandtonsayear.Today,activeplayersinChina’sSAFandHVOmarketsinclude:SinopecZhenhaiRefining&ChemicalCompany(ZhenhaiRefining),ECOEnvironmentalInvestmentsLimited(ECO),BeijingHaixinEnergyTechnologyCo.,Ltd.(Haixin)46,ZhongdiyouNewEnergy(Shandong)Co.,Ltd.(Zhongdiyou),BeijingShougangLanzaTechNewEnergyCo.,Ltd.(ShougangLanzaTech),LongyanZhuoyueNewEnergyCo.,Ltd.(LYZY)andShijiazhuangChangyouBioenergyCo.,Ltd.(Changyou).Amongthem,ECOandZhenhaiRefininghavealreadystartedasmall-scaletrialproductionofSAF.HaixinandZhongdiyouhavedevelopedplanstoeitherbuildnewSAFcapacitiesorrepurposetheexistingbiodieselcapacitiesforSAF.ShougangLanzaTechisadvancingacommercial-scaleprojectofcon-vertingCOandCO2fromindustrialwastegasesintoethanolviabio-fermentationandplansatrialproductionofbiodieselorSAFusingethanol.Buildingonitssuccessinproducingnext-generationbiodiesel,LYZYisalsoplanningtobuildnewHVOproductioncapacities.Apartfromthesecompanies,HangzhouEnergyEngineeringTechnologyCo.,Ltd.andsomeothercompaniesarealsoinvolvedinChina’searlySAFR&Dprojects.Someresearchinstitutes,liketheGuangzhouInstituteofEnergyConservationoftheChineseAcademyofSciences(CAS),arealsoexploringhowtoproduceSAFusingagriculturalandforestrywastes47.25▏INSTITUTEOFENERGY,PEKINGUNIVERSITY5.1.1ZhenhaiRefiningZhenhaiRefining,asubsidiaryofChinaPetroleum&ChemicalCorporation(Sinopec),isthelargestcompanyinChinathatintegratesrefiningandchemicals.Asanoilandgascompany,ZhenhaiRefiningoffersagoodexampleofatraditionalenergycompanymakingforaysintotheSAFmarket.Sinopec,asthelargestproducerofconventionalaviationfuelsinChina,isthefirstcompanyinthecountrytosystematicallyinitiateR&D(in2009)andproductionofSAF.WithinSinopec,ZhenhaiRefiningnotonlysuppliestwomilliontonsofconven-tionalaviationfuelsperyear(beforetheCOVID-19pandemic),butalsoundertakestodevelopandproduceSAF.TheexistingSAFmanufacturingfacilityatZhenhaiRefiningcanprocess100thousandtonsoffeedstocks.Trialproductionstartedinthemiddleof2022.LikelargemultinationaloilcompaniessuchasBPandShell,Sinopec’sSAFproductionremainsonasmallscale.WhetherSinopecwillinvestmoreinthebusinessdependsonmarketdemand.5.1.2ECOEstablishedin2000,ECOisawhollyownedsubsidiaryofTheHongKongandChinaGasCompanyLimited(Towngas).ECOfocusesonthedevelopmentofnewenergyprojectsinChina,coveringresourceexploitation,coal-basedchemicals,liquefactionofcoalbedmethane,vehicularfuelsandutilizationofbiogasfromlandfills.InHongKong,ECOalsooperatesLPGfillingstationsandapermanentaviationfuelstoragefacilityfortheHongKongInternationalAirport48.ECOisanotherexampleofalargetraditionalenergycompanytappingintotheSAFmarket.Itsparentcompany,Towngas,focusesonsupplyingtowngasmainlytoHongKongandChinesemainland.In2021,TowngassuppliedthreemilliontonsofaviationfuelsinHongKongandproducedapproximately180thousandtonsofHVOthatgeneratedasalesrevenueofHKD2.6billion,muchhigherthanHKD960millionin2020.HVOhassurpassedwatertariffsandsalesrevenuesfromfossilfuelssuchasoilandcoaltobecomethelargeststreamofincome,secondaryonlytothemaingasbusiness(includinggassales,installation,gasappliances,andmaintenance)49,50.5.1.3HaixinHaixin’s(formerlynamedasBeijingSanjuEnvironmentalProtection&NewMaterialsCo.,Ltd.),whichwasestablishedin1997.Thecompany’smajorshareholderistheState-ownedAssetsSupervisionandAdministrationCommissionofHaidianDistrict,Beijing51.Since2019,HVOhasbecomeanimportantareaofbusinessforHaixin,withanannualproductioncapacityof350thousandtons,allofwhichareexportedtoEurope.Thecompanyplanstoincreasethecapacitytoonemilliontonsayear.Todate,HaixinhasnotproducedSAF,butdependingonmarketdemand,itmaybuildnewSAFproductioncapacitiesorrepurposetheexistingHVOproductioncapacitiesforSAF.5.1.4ZhongdiyouZhongdiyouwasestablishedin2020andislocatedintheZhanhuaEconomicDevelopmentZoneinBinzhou,Shandong.Zhongdiyoufocusesonproducingbiofuelssuchasliquidparaffin,HVOandSAF,utilizinghydrogenationfacilitiesintheprovince’soutdatedrefiningcapacitiesthathavebeenupgradedthroughthecompany’sself-developed“plantresiduetooil”(PRO)technology.LeveragingopportunitiesfromthetransitionoftherefiningindustryinShandong,Zhongdiyoualsosharesitstechnologyandprocesswithlocalcompaniestoproducebiofuels.ZhongdiyouproducedHVOonatrialbasisinAugust2021,usingpalmacidoil(PAO)asthemainfeedstock.Thecompanycurrentlyproduces400thousandtonsofHVOayearaccordingtoISCCstandards,allofwhicharesoldtoEurope.Thecompa-nytargetsanannualproductioncapacitybetweenoneandtwomilliontonsinthefuture.INSTITUTEOFENERGY,PEKINGUNIVERSITY▏265.1.5LYZYEstablishedin2001,LYZYismainlyengagedintheresearch,development,manufactureandsalesofbiodieselandderivativeproductsthatareproducedfromwasteoil(suchasgutteroilandacidoil),includingindustrialglycerin,bio-esterplasticiz-ersandwater-basedalkydresin52.LYZYisanotherexampleofabiodieselcompanyexpandingitsbusinessoperationsintoHVO.In2021,thecompany’sproductioncapacityofbiodiesel(first-generation)totaled400thousandtonsayear,withanoutputof358thousandtons,anincreaseof54.65%fromlastyear.LYZYplanstoincreaseitsannualbiodieselcapacityto750thousandtonsinthenextthreetofiveyears.ItsMeishanmanufacturingfacility,locatedinLongyan,Fujiananddesignedwithanannualproductioncapacityof100thousandtonsofHVO,isstillunderconstruc-tion53,54.5.1.6ShougangLanzaTechShougangLanzaTech,establishedin2011,isaSino-foreignjointventurecontrolledbyShougangGroup.ThecompanyismainlyengagedinusingCOandCO2fromindustrialwastegasesasfeedstockforproducingethanolandproteinsusedforanimalfarming.In2018,ShougangLanzaTechputintooperationthefirstfactorytobegincommercial-scaleproductionofethanolandproteinsbyindustrialwastegasfermentation.TheoperationalprojectsinCaofeidianandNingxiabothhaveanannualcapacityof45thousandtons.ThecompanyhasalsobuiltanothertwonewprojectsrespectivelyinGuizhouandNingxia,eachwithanannualcapacityof60thousandtons.Duringthe14thFYPperiod,itstotalethanolcapacityisexpectedtoreachonemilliontonsayear.Intermsofprocess,thetechnicalpathwayfromethanoltoSAFhasbeencleared,buttherehasbeennocaseofsuchproductiononanindustrialscale.Thecompany’sUSpartner,LanzaTech,hasalreadycompletedpilotproductionunderthepathway.Currently,ademonstrationplantisbeingbuiltintheUSthatwillconvertethanoltoSAFatascaleof30thousandtonsperyear.Theplantisexpectedtobefullyoperationalinthesecondhalfof2023.ShougangLanzaTechhasrecentlyplannedtointroducethistechnologytoChinatobuildindustrialprojects.Fromaprocessperspective,thetechnicalpathwaywillbeAtJorG+FT.IfthetechnologyisfinallybroughtintoChina,itwillaccelerateChina’sprogressinSAFdevelopmentundersuchpathways.5.2SuppliersChinaNationalAviationFuelGroupLimited(CNAF)iscurrent-lythelargestaviationfuelsupplierinChinathatintegratesthepurchase,transportation,storage,qualitymanagement,sales,andinto-planservice55,supplyingmorethan95%ofdomesticaviationfuelsinthecountry.ItisexpectedtoremainthemajorplayerinsuchareasasSAFpurchase,sales,andinto-planeserviceinthefuture.Whenitcomestopurchase,domesticairlinesmostlybuyaviationfuelsfromthefollowingthreecompanies:ChinaNationalPetroleumCorporation(CNPC),ChinaPetrochemicalCorporation(Sinopec),andChinaNationalOffshoreOilCorporation(CNOOC).Internationalflights(includingflightsofdomesticairlinesoriginatingfromChinabutboundforforeigncountries)mainlyrelyonimportedfuels(bondedfuels).ChinaAviationOil(Singapore)CorporationLtd.(CAO)isresponsibleforthebusinessofimportingaviationfuels.InmainlandChina,SAFhasnotbeenusedbyairlinesonacommercialscale.Sofar,SAFpurchase,andinto-planeservicehavenotbeenestablishedasaroutinebusinessatCNAF,butthecompanywasfullyinvolvedinthesupplyofSAFforfourtestandcommercialflightsinChina(thefifthflighttestusedbiofuelwhenChinaSouthernAirlinestookdeliveryofanewplanefromFrance56.Particularly,in2011CNAFwentoutofitswaytobuildSAFreceiving,storage,blendinganddispensingfacilitiesattheBeijingCapitalInternationalAirportforthepurposeofthefirstflighttestconductedbyAirChina.Moreover,CNAFisalsoinvolvedinrelevantSAFR&Dprojects.In2019,2020and2021,CNAFpartneredwiththeCASGuangzhouInstituteofEnergyConversionandtheSecondResearchInstituteofCAACfornational-,provincial-andmin-27▏INSTITUTEOFENERGY,PEKINGUNIVERSITYisterial-levelaviationbiofuelR&Dprojects,butmuchremainstobedonebeforetheirproductscanbeusedcommercially.ApartfromCNAF,averyfewforeigncompaniesarealsosupplyingaviationfuelsandprovidinginto-planeserviceinChina,likeAirBP,theaviationdivisionofBP.ThroughitsfourjointventuresformedwithCNAF,AirBPprovidesaviationfuel-relatedservicesinGuangdong,Guangxi,Hunan,Hubei,Henan,Sichuan,Guizhou,andChongqing.Today,AirBPsuppliesSAFat20locationsinsevencountriesglobally.AirBPhasnotstartedanySAFbusinessorprojectinChina,butinviewofthesignificanceofthecountry’saviationmarket,AirBPhasstartedSAFresearchinChinasince2021topromoteSAFdevelopmentinthesecondlargesteconomy.Globally,AirBPhasinvestedinthreeSAFprojects—theFulcrumprojectinNorthAmericathatproducesSAFbyG+FTprocessing;BP’srefineryinCastellon,Spain;andacollabora-tiveprojectunderwhichAirBPwillpurchaseSAFfromNeste.Shell,anotherglobalaviationfuelsupplier,issupplyingSAFtoanumberofairportsworldwide,includingtheAmsterdamSchipholAirportandtheLosAngelesInternationalAirport.InAsia,ShellwillfirstsupplySAFtoHongKongandSingapore57.Worldwide,ShellhasalsomadeanumberofinvestmentsandinitiatedcooperativeprojectsrelatedtoSAF.InOctober2020,ShellenteredintoanagreementwithRedRockBiofuels,wherebyShellwilldistributeSAFtoRedRock’sexistingairlinecustomers.Inthesamemonth,ShellsignedacooperationagreementwithNestetoexpandSAFsupply.InJanuary2021,ECGGroupParaguayandShellsignedafive-yearcontractthatwillprovidemorethan500millionlitersofrenewabledieselandSAFperyeartoShell,startingfrom202458,59.Inaddition,ShellhasannounceditsintentiontoproducetwomilliontonsofSAFby2025.Tothisend,ShellhasmadeinvestmentstotherenovationofrefineriestoSAFplants.Forexample,ithasbuiltaSAFandbiodieselfactoryinRotterdam,Netherlandsthatisexpectedtobeoperationalin2024,withanannualcapacityof820thousandtons.ThecompanyhasalsoannouncedaninvestmentinSingaporetobuildamanufactur-ingfacilitywithannualcapacityof550thousandtonsofSAF60.5.3UsersMostofChineseairlinesarestate-ownedcompanies.Generally,theywillnotcarryoutSAF-relatedworkuntilinstructedbyrelevantpoliciesandplansofthecentralgovernment.Currently,ChineseairlinesasawholestayinstageofcapacitybuildingandhavenotintroducedclearplansforcommercialflightsusingSAF.Intermsofflighttest,AirChina,ChinaEasterAirlinesandHainanAirlinesrespectivelyconductedSAFflighttestsin2011,2013,2015and2017(Table5-1).However,afterthetests,Chineseairlinesdidn’tstriketheironwhileit’shottopromotecommercialuse.Asaresult,whileinternationalairlinesareactivelyinvolvedinthepromotionofSAF,theirChinesecounterpartsremainintheirinfancyintermsofSAFuse.INSTITUTEOFENERGY,PEKINGUNIVERSITY▏28Table5-1:Chineseairlines’flightsusingSAFDateAirlineSAFfeedstockBlendingratioProducerFlightdescriptionOct.28,2011AirChinaJatrophacur-casseedoil50%CNPCAtestflightfromBeijingCapitalInterna-tionalAirportApr.24,2013ChinaEasternPalmoil&wastecookingoil-SinopecA1.5-hourtestflightfromShanghaiHongqiaoInternationalAirportMar.21,2015HainanAirlinesWastecookingoil50%SinopecAflightfromShanghaitoBeijing,thefirstpassengerflightinChinausingSAFMay28,2016CathayPacificSugarcane10%Total/AmyrisAflightfromToulousetoHK(fordeliveryofanewplane)Nov.22,2017HainanAirlinesWastecookingoil15%SinopecAflightfromBeijingtoChicago,thefirstintercontinentalSAFpassengerflightinChinaFeb.28,2019ChinaSouthernSugarcane10%TotalAflightfromToulousetoGuangzhou(fordeliveryofanewplane)Bycontrast,foreignairlinesdemonstratemoreenthusiasmaboutSAFthantheirChinesecounterparts61,62(Table5-2).●2008-2011:GlobalairlinesarestillatastageoftechnicallyconductingSAFflighttests.●2011-2015:Atotalof22airlineshavemadeapprox-imately2,500commercialpassengerflightsusingSAF.●2011-July2022:ThenumberofcommercialSAFflightsreachesmorethan430thousandandover45airlineshavegainedexperienceinflyingonSAF.29▏INSTITUTEOFENERGY,PEKINGUNIVERSITYTable5-2:NumberofSAFflightsmadebyglobalairlinesDateNo.ofcommercialSAFflightsNo.ofairlineswithexperienceinSAFflight2008-2011Lotsoftestflightsglobally2011-2015>2,500222011-07/2022>430,000>45Source:IATA,AviationBenefitsBeyondBordersTodate,largeairlinesinChinesemainlandhavenotspecifiedanyplan,goalorpathwayregardingSAFuse.LocalairlinesareexpectedtoinastageofcapacitybuildingbeforerelevantpoliciesorspecificrequirementsareintroducedbytheChinesegovernment.HongKong-basedcarrierCathayPacificisamoreactiveuserofSAF.Since2016whenCathayPacifictookdelivery,usingSAF,ofanewplanefromToulouse,whereAirbusisheadquartered,thecompanyhascumulativelyconsumedmorethan200tonsofSAF.Ithasalsocommitted—topurchasing1.1milliontonsofSAFoverthenext10years,tousingSAFfor2%ofitstotalfuelcon-sumptionby2025andfurtherto10%by2030,andtoreachingnet-zerocarbonemissionsby2050.InApril2022,CathayPacificlaunchedtheCorporateSustainableAviationFuelProgramtoexpressitsdemandforSAFtorelevantsuppliers,towhichCNCPandShellwillsupplyfuels63.INSTITUTEOFENERGY,PEKINGUNIVERSITY▏30©Photoby宅-KENonPixabay6OUTLOOKFORSAFDEVELOPMENTINCHINAGenerally,theSAFindustryisstillinitsinfancyinChinaandhasabrightfutureahead,butcurrentlytheindustryfacesmanychallenges.Atthenationallevel,Chinalackssystematictop-downdesignsandclearpolicysignals,asaresultofwhichkeymarketplayersremainstayinginthestageofpreparationwithnocleardevelopmentplans.Therealsoexistbarriersandbottlenecksintermsofproductioncapacity,technologicalreadiness,feedstocksupplyandcost.However,China’sSAFindustryalsoenjoyscer-tainopportunitiesandadvantages.IfmakingfulluseofinternalandexternalfavorableconditionstounleashthepotentialofSAFinreducingcarbonemissions,theindustrywillprovideaboosttothecountry’seffortstoreducecarbonemissionsfromaviation,peakcarbonemissions,achievecarbonneutralityandstrengthenenergysecurity.INSTITUTEOFENERGY,PEKINGUNIVERSITY▏326.1TechnicalpathwaysCurrently,theindustryismainlyinterestedinfourtechnicalpathwaystoproducingSAF,includingHydroprocessedEstersandFattyAcids(HEFA),Gasification/Fischer-Tropsch(G+FT),AlcoholtoJet(AtJ)andPowertoLiquid(PtL)(Table6-1).HEFAistheonlypathwaythathasbeenadoptedbyChinainitsSAFandHVOproductionanddemonstrationprojects.Backedbymorematuretechnologyandprocess,thepathwayisfollowedbybothECOandZhenhaiRefiningintheirSAFprojects,sodoHaixinandZhongdiyou,whichalsoadoptHEFAintheircurrentHVOprojects(LYZYalsoplanstouseHEFAprocessinginitsHVOprojectthatissoontobeoperational).Westerncountrieshavealreadylauncheddemonstrationpro­jectsofG+FTandAtJ,butChinahasnotstartedtoexplorethetwoareas.Somedemonstrationprojectsproducingethanolfuelandrelatedchemicalsadoptthetwopathways.Forexample,somecompaniesinnortheastChinaareproducingethanolfromstrawsandstalks.ShougangLanzaTechisalsoconvertingindustrialwastegasesintoethanolinHebeiandNingxia.However,noprojectinChinaiscapableofdirectlyconvertingalcoholsintofuelsatanindustrialscale.Asinwesterncountries,thePtLpathwayremainsa“concept”inChina,buttherehavearisendemonstrationprojectsofproducingmethanolfromgreenhydrogen.In2020,atechnicalteamfromtheChineseAcademyofSciences(CAS)successfullycompletedtrialproductioninademonstrationprojectinLan-zhou,Gansuthatcanproducemethanolfromgreenhydrogenatascaleofonethousandtonsayear.Presently,theteamisworkingonanindustrializationprojectwithacapacityof100thousandtons64.©PhotobyDeltaMikeonPixabay33▏INSTITUTEOFENERGY,PEKINGUNIVERSITYFigure6-1:OpportunitiesandchallengesfordifferentSAFpathwaysinChinaHEFAAtJ1G+FTPtLOpportunitydescriptionSafe,proven,andscalabletechnologyPotentialinthemid-term,howeversignificanttechno-eco-nomicaluncertaintyProofofconcept2025+,primarilywherecheaphigh-volumeelectricityisavailableTechnologymaturityMatureCommercialpilotIndevelopmentFeedstock•Wasteandresiduelipids,purpose-lygrownoilenergyplant2•Transportableandwithexistingsupplychains•Potentialtocover5%-10%oftotaljetfueldemand•Agriculturalandforestryresidues,municipalsolidwaste4,purposelygrowncellulosicenergycrops5•Highavailabilityofcheapfeedstock,butfragmentedcollection•CO2andgreenelectricityUnlimitedpotentialviadirectaircapture•Pointsourcecaptureasbridgingtechnology%LCAGHGreductionvs.fossiljet73%-84%385%-94%699%7OpportunitiesintheChinesemarket•Richinrawmaterials.•Withgoodindustrialfoundation.Richinrawmaterials•Developmentbasisofrenewableenergyindustry.•Havebetterexploration.ChallengesintheChinesemarketThedistributionofrawmaterialsisscatteredandthecostofcollectionishigh.LackoftechnicalreserveandR&DfoundationLackoftechnicalreserveandhighcost.Note:1.Ethanolroute;2.Oilseedbearingtreesonlow-ILUCdegradedlandorasrotationaloilcovercrops;3.Excludingalledibleoilcrops;4.Mainlyusedforgas./FT;5.Asrotationalcovercrops;6.Excludingallediblesugars;7.Upto100%withafullydecarbonizedsupplychainSource:WorldEconomicForum,CleanSkiesforTomorrow:SustainableAviationFuelsasaPathwaytoNet-ZeroAviation,2021;researchbyChineseexperts.UndertheHEFApathwayadoptedinChina,companiesuniversallyoptforwasteoilinsteadofnon-foodcrops,whichisamoresustainablepracticethatbenefitscarbonemissionsreduction.Moreover,Chinaisindustriallybetterpositionedinthisfield,whichisfoundationalfortheexpansionofSAFproductioncapacityinthefuture.Intermsoftechnologicalreadiness,thereremainsmuchtobedoneforChinesecompanieswhenitcomestoG+FTandAtJprocessing.Sino-foreigncollaborationinR&DmayhelpacceleratetheadoptionofthesetwopathwaysinChina,wheretheywillhaveenormouspotentialinviewofthewidespreadavailabilityoffeedstocksforthetwopathways.INSTITUTEOFENERGY,PEKINGUNIVERSITY▏34TheworldholdshighexpectationsofPtLasamedium-andlong-termtechnicalpathway,sodoesChina,whichhostsanabundanceofresourcesforsolarandwindpowergenerationthatisbackedbyexplicitpolicysupport.Thiswillhelpdrivethedevelopmentofgreenhydrogen,whichinturnwillhelpgiverisetoPtLdemonstrationprojectsaround2025.6.2ProductioncapacityChina’scurrentSAFproductioncapacity(undertheHEFApathway)amountsto150thousandtonsayear.Fornow,notexplicitplanshavebeenannouncedtoinitiatenewproductionprojects65.BecauseofahighpositivecorrelationbetweenSAFproductioncapacityanduserdemand,China’sSAFproductioncapacitymaybeexpandedinresponsetogrowingdemand.InviewofmorematureprocessesfortheHEFApathway,SAFproducerswillfinditmorepracticalandefficientiftheywanttobuildnewSAFproductionfacilitiesorrepurposetheirexistingHVOcapacitiesusingthepathway.TheHEFApathwaysrequiresahydrogenationfacility(andahydrogenproductionfacilityifthereisnosupplyofthesubstance),whichisthemosttime-andcost-consumingcomponentofproductionexpansion.Practically,inChinaitusuallytakestwotothreeyearstobuildanewSAFproductionfacilitywithanannualcapacityof100thousandtons.ThetimecanbeshortenedtomonthsorapproximatelyoneyearifanexistingHVOfacilityorarefiningfacilitywithhydrogenationandhydrogenproductionsystemsistransformed.However,itislesspracticalandlesscostefficienttorepurposefirst-generationbiodieselproductioncapacityforSAFproduc-tionduetotheformer’ssignificantdifferencefromHVOandSAFproductionintermsofmanufacturingprocessandfacility.Before2025,ifweassumethatthereisnoadditionalSAForHVOproductioncapacityandChinaexpandsorrepurposescurrentlyoperationalSAF/HVOcapacitiesandthosetobecompletedbefore2025tomaximizeproduction,totalSAFproductionwillreachanestimated2.05milliontonsin202566(Figure6-2).Figure6-2:China’stheoreticalSAFproductioncapacityby20252.351.92.050.1500.51.0RepurposedMilliontons/year1.52.02.5HVOpotentialcapacityExistingSAFcapacitySAFHVOcapacityrepurposedforSAFproductionNote:1)ItisassumedthatnonewcapacitieswillbeaddedtothealreadyannouncedSAForHVOcapacitiesbefore2025;2)anotherassumptionisthatbothcurrentlyoperationalandSAF/HVOproductioncapacitiestobecompletedby2025willbeeitherexpandedorrepurposedtomaximizeSAFproductionandthat80%ofHVOproductioncapacitieswillberepurposedforSAFproduction.35▏INSTITUTEOFENERGY,PEKINGUNIVERSITYOnthedemandside,Chinaconsumed36.84milliontonsofaviationfuelsin2019.DuetodeclinesintrafficcausedbytheCOVID-19pandemic,aviationfuelconsumptiondroppedto25.23milliontonsin2020andrecoveredslightlyto26.47milliontonsin2021.IfweassumethatthebusinessvolumeofChina’saviationsectorrecoverstopre-COVIDlevelsin2024andcontinuestoincreaseslightlyin2025,China’saviationfuelconsumptionwillreach41.2milliontons.Iftheabove-men-tioned2.05million-ton-capacitycansupply1.85milliontonsofSAFtothemarket,SAFwillaccountfor4.5%ofChina’stotalaviationfuelconsumption(Figure6-3).Figure6-3:EstimatedaviationfuelconsumptioninChinaandtheoreticalSAFshareby202505101520Millontons25303540452019202020212022202320242025PotentialshareofSAF:4.5%Note:ItisassumedthatChinawillincreaseitstotalSAFproductioncapacityto2.05milliontonsandisabletosupply1.85milliontonsofSAFby2025.6.3AvailabilityoffeedstocksFeedstocksthatcanbeusedtoproduceSAFarewidespreadinabundanceinChina,includingwastecookingoil,agriculturalandforestrywastes,municipalorganicsolidwastes,industrialfumes,energycrops,andgreenhydrogen67.Wastecookingoil(WCO,commonlyknownas“gutteroil”)isthemajorsourceoffeedstockforproducingbiodieselinChinaandisexpectedtobethemajorfeedstockforSAFproductionatleastinthenextdecade.WCOsupplyissparselydistributedinChinaandtherecyclableamountisestimatedat3.4milliontons(2019)68.MostofitisprocesseddomesticallytoproducebiodieselorexportedtoEurope,withaminorityofitreusedtoproducesoaps,plasticizers,andpesticideemulsions.WhenthereismoremarketdemandforSAF,WCOcanalsobeusedtoproduceSAF.Agriculturalwastesgenerallyincludestrawsandstalksaswellasleftoversfromtheprimaryprocessingofagriculturalproducts,suchasricehusks,corncobs,peanutshells,andsugarcanebagasse.Theyaremostlyabundantlyavailableinmajoragriculturalproducingareas,includingnortheast,northandthelowerandmiddlereachesoftheYangtzeRiver.Chinacanprovideatotalof207milliontonsofagriculturalwastesforenergyproduction,including145milliontonsofstrawsandstalksand62milliontonsofleftoversfromtheprimaryprocessingofagriculturalproducts69.Forestrywastesincludeleftoversfromtreefelling,woodINSTITUTEOFENERGY,PEKINGUNIVERSITY▏36processing,clearing,andtrimming.Thesewastesaremostlyfoundinareaslikenortheastandsouthwest.Anestimated195milliontonsareavailableforenergyproduction70.Ofmunicipalsolidwastes(MSW),organicwastesrepresent20%to35%,whichifwellprocessed,canalsobeusedtoproduceSAF.Nationwide,atotalof235milliontonsofMSWwereremoved(in2020)71.If10%ofthemcanberecycledforenergyproduction,thatwilltranslateinto23.5milliontonsoffeedstock.Chinaalsogeneratesconsiderableamountsofindustrialwastegasthatcanbeutilizedtoproduceethanoltothetuneoffivemillionoreventenmilliontonsayear.ThenethanolcanbeusedtomakeSAF.Chinapossessessizeableswathesofmarginalland72(likesalineandalkalineland),whichcanbeusedtogrowenergycrops,butinviewofChina’slimitedlandreservesandwatersupply,highuncertaintyexistswithregardstotheuseofenergycropsforproductionoffuelslikeSAF.Fornow,thisreportwillnotfactorintheavailableamountofenergycrops.Theavailableamountsofabove-mentionedfeedstocksarelistedinthetablebelow.AlthoughWCOisthemostmaturefeedstockforSAFproduction,itsavailabilityislimited.Thesupplyofagriculturalandforestrywastesisbountifulwithenormouspotential,butinthefutureChinawillneedtocoor-dinatetheiruseformultiplepurposes(suchasreturn-to-field,heatsupply,powergenerationandliquidfueldevelopment).Table6-1:PotentialavailabilityofSAFfeedstocksinChinaFeedstockAvailability(milliontons/year)SAFoutputratioSAFproduction(milliontons/year)Wastecookingoil3.440%（HEFA）1.36Agriculturalwaste20710%（AtJ/G+FT）20.7Forestrywaste19510%（AtJ/G+FT）19.5Municipalorganicsolidwaste23.510%（AtJ/G+FT）2.35Industrialwastegas-basedethanol550%（AtJ/G+FT）2.5Total433.9-46.41Note:1)TheuseofdifferentfeedstocksandprocessesforSAFproductionwillalsoresultintheproductionofdifferentpercentagesofbiodiesel,gasoline,andnaphtha.OutputratioscanbeadjustedtomaximizeSAFproduction,butthiswillalsoresultinmorelow-valuebyproductslikenaphtha.Therefore,givencurrenttechnologicalreadinessandcostefficiency,theoutputratioslistedinthetableareoverallSAFoutputratiosunderoptimalconditions.Withtechnologicalprogress,theseratiosmaybefurtherimproved;2)OutputratiosforusingagriculturalandforestrywastesormunicipalsolidwastestoproduceSAFfluctuatebetween10%and15%.Astandard10%ratioisusedinthetable;3)TheoutputratioforusingindustrialwastegastomakeSAFissetat50%.4)TheestimationonfeedstocksforPtLpathwayisnotlistedabove,sincetheoreticallypotentialrawmaterialsforPtL,namelyCO2andrenewableelectricity,areendless.Source:DataonfeedstockavailabilitycomesfromTianYishuiandotherexpertsaswellasfromtheMinistryofHousingandUrban-RuralDevelopment;outputratioscomefromMcKinseyGlobalEnergyPractice,ICCT,InternationalRenewableEnergyAgency(IRENA)andChineseindustryexperts.37▏INSTITUTEOFENERGY,PEKINGUNIVERSITY6.4StandardsdevelopmentAsasustainablefuel,SAFmustmeetprocessandperformancecriteriarequiredforaviationfuelsafetyandqualityandsatisfysustainabilitystandards.Currently,countriesmainlycertifytheairworthinessofSAFproducedunderapprovedprocessesviastandardssuchasGB6537,ASTMD7566andDEFSTAN91-091.SAFsustainabilityiscertifiedagainststandardssuchasRSBandISCC.Westerncountriesareleadingtheworldinstandardsdevelopmentinviewoftheirstatusasmajorproducersandconsumersofbiofuels.Overthepast10-plusyears,ChinaonlyusedaverysmallamountofSAF,mostlyfortestflightsbysomeairlinesandforonlytwocommercialpassengerflights.Duringthisstage,SAFusemainlyfollowedconventionalaviationfuelstandardsfortransportation,storage,andinto-planeservice.Today,Chinahaspreliminarilyestablishedasetofstandardsonaviationbiofuelprocessandperformanceandiscurrentlyconductingresearchonsustainabilitystandards.Mostofbiofuels(mainlybiodiesel)producedinChinaaresoldtoEurope.ForSAFtobeproducedinthefuture,westernstandardsandcertificationsystemswillapplyiftheystilltargettheEuropeanmarket.AirlinesandpotentialSAFproducershavehighexpectationsaboutChineseauthorities’movetodevelopandimprovethecountry’sSAFstandardsandtheircoordinationandalignmentwithforeigncounterparts.ConsideringthefactthatChinahasalreadyestablisheditsownstandardssystemonaviationbiofuels,whichishighlyconsistentwithinternationalstandardslikeASTM,issuesassociatedwithstandardswillnotbecomeobstaclestoSAFdevelopment.Inthefuture,bothforeignanddomesticstandardswillbeconstantlyfleshedoutandenhancedinresponsetoexpandingSAFproductionanduse.INSTITUTEOFENERGY,PEKINGUNIVERSITY▏38©Photoby穿着拖鞋一路小跑onPixabay7POLICYSUPPORTHOLDSTHEKEYTOSAFDEVELOPMENTINSTITUTEOFENERGY,PEKINGUNIVERSITY▏407.1GovernmentdirectivesarecriticalforbreakthroughsCurrently,theSAFindustryremainshighlypolicy-drivenandthereforepolicytargetsconstituteanimportantcomponentoftheexternalenvironmentfortheindustry’sdevelopment.ThemostcrucialfactoriswhetherthegovernmentwillestablishmandatoryorrecommendedSAFblendingshares.InEuropeanandUSmarkets,governmentshaveintroducedgoalsfortheuseofsustainabletransportfuelsandspecificblendingrequirementsatbothnationalandregionallevels.Directive(EU)2018/2001oftheEuropeanParliament(REDII)andoftheCouncilestablishesabindingUniontargetofraisingtheshareofrenewableenergytoatleast32%ofEU’senergyconsumption,includingasub-targetofrequiringfuelsupplierstosupplyaminimumof14%(withadvancedbiofuelsaccountingfor3.5%)oftheenergyconsumptioninroadandrailtransportby203073,74.Asfortheaviationsector,theReFuelEUAviationInitiative,partofEU’s“Fitfor55”package,proposestograduallyphaseoutfreeemissionallowancesfortheaviationsectorandaligntheproposalwiththeglobalCarbonOffsettingandReductionSchemeforInternationalAviation(CORSIA).Forthefirsttime,theEuropeanCouncilalsoagreedtoincludemaritimeshippingemissionswithinthescopeoftheEUEmis-sionsTradingSystem(ETS).Atthesametime,aviationfuelsuppliersarerequiredtoblendmoreandmoreSAFinitsfuelssuppliedtoEuropeanaircraft75.ToencouragethedevelopmentofPtLprocessing,EUalsoplanstosetaquantitativetargetfortheshareofSAFproducedunderthepathway.Currently,theseproposalsforregulationsarependingapproval.Table7-1:EU’sproposedSAFblendingsharesSAFblendingsharePtLas%Year2%-From20255%Atleast0.7%From203020%Atleast5%From203532%Atleast8%From204038%Atleast11%By204563%Atleast28%By2050Source:compiledbasedoninformationfromEUwebsites.41▏INSTITUTEOFENERGY,PEKINGUNIVERSITYSimilarly,theEnergyIndependenceandSecurityActoftheUS(EISA)76,77hasestablishedannualtargetsforallkindsofbiofuelsandauthorizestheEnvironmentalProtectionAgency(EPA)toestablishandadjustannualbiofuelquotasdependingonmarketsupplyanddemand.EPArequiresallobligatedbiofuelblenders(includingrefineries)tosellprescribedquotasofbiofuelseachyearorbuycorrespondingquotasfromthetradingmarket.Drivenbythesepolicyrequirements,allparticipantsacrossthesupplychainofSAFinwesterncountriesareactivelypushingforSAFdevelopment,whichhasinturnresultedinitssteadygrowth.GlobalannualSAFconsumptionsoaredfromeightmillionliters(approximately6,400tons)in2016to100millionliters(approximately80thousandtons)in202178,butmostofithappenedinEuropeandNorthAmerica.InChina,the14thFYPforGreenCivilAviationDevelopmentproposestoincreaseannualSAFconsumptionto50thousandtons(approximately63millionliters)by2025.Thisisapositivepolicysignal,butthetargetof50thousandtonsisnotabindingoneandthepathwaytowardsthetargethasyettobeclarified.Generally,allplayersacrossthesupplychainarestillinastageofcapacitybuilding.Airlines,aviationfuelproducers,anddistributorsinChinaarepredominantlystate-ownedenterprises.Underthissystem.theabsenceoftop-downdesignsatthecentralgovernmentlevelwillcreateahighlevelofuncertaintyfortheindustry’sdevelopment.Participantsfromallpartsofthesupplychainwillremainhesitant,waitingforexplicitpolicysignalsfromthegovernment,whichwillresultinthelackofcoordinatedandcollectiveactionsamongthem.First,intermsofmarketdemand,withoutamandatorySAFtarget,airlineswillnottakeitasanurgentprioritytopromoteSAFuseandthereforehavenotintroducedanyfurtherplansinthisfieldexceptforthefewflighttestsbetween2011and2017.DespitetheglobalemissionsreductiontargetsetbyCORSIAfortheaviationsector,airlinesarestillwaitingfortheprogressinnegotiationsatthenationallevel,withoutanyactionplans.Second,intermsofinvestment,largefuelsupplierssuchasSinopecandCNPCwillfinditdifficulttoestablishmedium-andlong-termstrategiesforSAFproductionduetothetinySAFmarketandthelackofclearpolicysignals.TheSAFfacilityofZhenhaiRefiningisstillademonstrationprojectbynature.Asforsmallandmedium-sizedsuppliers,theywillalsofinditdifficulttomakeinvestmentdecisionswhenSAFinvolvesheftyinvestmentsbutwithoutpolicyclarityandmarketdemand.7.2SupportivemeasuresareessentialThelackofsystematictop-downdesignsforSAFinChinahasalsocontributedtotheabsenceofrelevantpolicyincentivesandself-drivenmarketmechanismsthatcanstimulatethede-velopmentoftheSAFindustry.InthebiodieselindustrythatiscloselyrelatedtoSAF,Chinaexemptsbiodieselthatconformstonationalstandardsfromconsumptiontaxesandgrantsarefundof70%ofvalue-addedtax.Whensuchpreferentialtaxtreatmentispilotedinsomeprovincesandcities,somelocalgovernmentshavealsointroducedcorrespondingfiscalandpricepolicies79thatareencouragingtobiodieselproducers.Anotherexampleistheelectricvehiclesectorunderthemobil-ityindustry,whichhasalsoenjoyedconsiderablegovernmentsupportthroughoutthepastdecadeofitsinfancy.Bycontrast,notargetedsupportivemeasureshavebeeninsti-tutedinSAFindustry.DuetothenascencyoftheSAFmarketandthedisconnectbetweenSAFstandardsandcertificationsystemsandrelevantpolicies,atbestSAFproductscanonlybecharacterizedasasub-categoryofthebiodieselcategorytoseekfiscalandtaxsupportbeforenewpoliciesareimplement-ed.HighcostisaweaknessofSAFwhencomparedwithconven-tionalaviationfuelsanditisalsoasignificantimpedimenttoitswidespreadadoption.DuetotheadverseeffectsoftheCOVID-19pandemic,airlinesareincreasinglyconservativeaboutinternalcostcontrolandexternalinvestment.UsingSAFthatismultipletimesmoreexpensivethanconventualfuelswillbeanextrafinancialburdenforairlines.SAFwillstandachanceofbecomingmorecostcompetitiveifthegovernment,SAFusersandsuppliers,aircraftmanufactur-ersandairportsmakecollectiveeffortsanddesignincentivemechanismstopromotetechnologicalprogressandwiderapplication.INSTITUTEOFENERGY,PEKINGUNIVERSITY▏42Inthisregard,theUShasmadeencouragingattempts.InSeptember2021,theBidenadministrationreleasedacross-departmentalactionplan,theSustainableAviationFuelGrandChallenge80,81.ItisacommitmentmadebytheDepartmentofEnergy,theDepartmentofTransportation,theDepartmentofEnergyandtheFederalAviationAdministrationincollaborationwiththeSAFindustrytoinvestuptoUSD4.3billiontoproduceSAFonacommercialscale,increasetheproductionofSAFtothreebilliongallons(approximately9.06milliontons)peryearby2030,andsupplysufficientSAFtomeet100%ofaviationfueldemand(approximately35billiongallonsperyear)by2050.Relevantgovernmentdepartmentsandmajorindustryparticipantshaveallmadecommitmentsordevelopedplans.7.3Multistakeholdercollaborationiscriti-calforimplementationSAFuseinvolvesallpartsofthesupplychain.Inmarketswithexplicitpolicysignals,multistakeholdercollaborationisanecessarysafeguardofimplementation.Inmarketswithoutclearpolicies(likeChina),suchcollaborationisevenmorecriticalwhentheSAFmarketremainsinitsearlystage,asthiswillhelpsolvethequestion“whichcamefirst,thechickenortheegg?”Multistakeholdercooperationcannotonlyhelpearlymoversbecomeresilientagainstrisksandaccumulatevaluableexperiencebutwillalsohelpinformpolicymakingandimprovement.Moreover,successfulexperiencewillalsoenhancepolicymakers’confidenceinpromotingSAF.Inwesterncountries,theSAFmarketisusuallyactivatedbythekeystakeholder,likeairports,fromthesupplychainincollaborationwithairlines,SAFproducersandaviationservicebuyers.ThispracticehasproducedencouragingresultsandoffersilluminatinginsightsfortheChinesemarket.Theap-pendixofthisreportofferscasesofwesterncountriesmakingcollectiveeffortsacrossthesupplychaintopromoteSAFuse.7.4ChinesepolicieswillbeshapedbyavarietyoffactorsTheChinesegovernmentplanstoscaleupSAFconsumptionto50thousandtonsby2025,butthisisnotamandatorytargetandpalesincomparisonwithconventionalaviationfuelconsumptionthatamountsto30to40milliontonsperyear(2018-2019).ItcanhardlybolstertheconfidenceofairlinesandproducersinmakingmoreSAFinvestments.Asinothercountries,whethertheChinesegovernmentwillinstitutestricterpoliciesorsetmoreambitiousgoalsaboutSAFnotonlydependsontheprogressoftheglobalaviationindustryinreducingcarbonemissions,butalsoonwhatpotentialcontributionsSAFcanmaketoChina’sclimatechangeresponse,environmentalprotection,energysecurity,andindustrialdevelopment.Whenweexaminecurrentandhistoricalpoliciesoncarbonemissionscontrol,wecanseethatthesefactorsareoftenpotentialdriversofpolicymakinginaparticularsector.Therefore,whetherChinawillprovidefurtherpolicyclarityonSAFpartlydependsonhowmuchSAFcancontributeinrelevantareas.43▏INSTITUTEOFENERGY,PEKINGUNIVERSITYTable7-2:SomedriversofChinesepoliciesoncarbonemissionsreductionSectorSelectedpoliesReducecarbonemi­ssionsReduceconven-tionalpollu­tantsStreng­thenenergysecurityEnhanceindus-trialcompeti-tivenessEnergy-­intensivesectors•GuidingOpinionsonAcceleratingtheEstablishmentandImprove-mentofaGreen,Low-carbon,andCircularEconomicSystem•14thFive-YearComprehensiveWorkPlanforEnergyConservationandEmissionsReduction•ImplementationGuidefortheTransformationandUpgradingofEnergy-IntensiveSectorstoSaveEnergyandReduceCarbonEmissions(2022)VVRenewableenergy•GuidingOpinionsonAcceleratingtheEstablishmentandImprove-mentofaGreen,Low-carbon,andCircularEconomicSystem•StrategicActionPlanforEnergyDevelopment(2014-2020)•14thFYPforRenewableEnergyDevelopment•14thComprehensiveWorkPlanforEnergyConservationandEmissionsReductionVVVVElectricvehicles•Mid-andLong-termDevelopmentPlanfortheAutomobileIndustry•DevelopmentPlanforEnergyConservationandNewEnergyVehicles(2012-2020)•DevelopmentPlanfortheNewEnergyVehiclesIndustry(2021-2035)•TheCircularoftheMinistryofFinance,theMinistryofIndustryandInformationTechnology,theMinistryofScienceandTech-nologyandtheNationalDevelopmentandReformCommissionConcerningthePromotionofNewEnergyVehiclesThroughtheFurtherImprovementofFiscalSubsidies(Caijian2020No.593)•GreenTravelActionPlanVVVVDispersedcoalcontrol•ActionPlanforAirPollutionPreventionandControl•CleanWinterHeatingPlaninNorthChina(2017-2021)•Three-YearActionPlanforWinningtheBlueSkyWar•StrategicPlanforRuralRejuvenation(2018-2022)VVINSTITUTEOFENERGY,PEKINGUNIVERSITY▏44©PhotobyHonglinShawonUnsplash8POLICYRECOMMENDATIONSINSTITUTEOFENERGY,PEKINGUNIVERSITY▏468.1FurtherclarifypolicydirectionTheutilizationandpromotionofSAFareassociatedwiththeoverallemissionsreductionoftheaviationsectoraswellaswiththeenergytransitionandtechnologicalchangeofthesupplychain.Currently,ICAO,IATA,aircraftandenginemanufacturers,airlines,conventionalandnewoilcompanies,andwesterngovernmentsareallactivelypromotingtheuptakeofSAFwithanaimtobecomestandardsettersandleadersinsuchareasasindustry,technology,andtrade.CarbonemissionsfromaviationwillgrowinChinainanticipa-tionofthesector’sfastgrowth.Aviationfuelisamajorcauseofcarbonemissionsaswellasabreakthroughinemissionsreduction.IfChinamovesearlytoindustrializeSAFproductionandreleasesexplicitpolicysignals,itwillnotonlyhelpcompleteitsSAFsupplychainandacceleratethepost-COVIDgreenrecoveryofitsaviationindustry,butwillalsohelpitselfgainmoreinitiativewhenparticipatinginthedevelopmentandimprovementofrulesoncarbonemissionsreductionbytheglobalaviationsector.Chinahassetashort-termgoalofcumulativelyconsuming50thousandtonsofSAFby2025,butthecountryhasnotdevelopedanyactionplan,remainsvagueaboutitsmedium-andlong-termpolicydirection,andhasnotprovidedenoughpolicysupport.Thegovernmentisadvisedtodevelopexplicitplansandfavorablepoliciesfortheindustry’sdevelopmentandtoleveragefiscalfundingtochannelprivate-sectorcapitalintoSAF-relatedindustries.ThegovernmentcanalsomakeitcleartoincludeSAFwithincarbonemissionstradingandincorpo-rateemissionsreductionintothemeasurementofairlines’carbonemissionsintensity.Regulatoryagencies,includingcivilaviation,energy,industry&commerce,andqualityinspection,canworkincollaborationandcoordinationwitheachothertostrengthenregulation,tracktheindustryonanongoingbasis,regularlyanalyzetheprogressinSAFproductionandpromotion,andintroducemeasuresandsolutionsbasedoncriticalissuesthathavebeenidentified.8.2Establishacross-ministerialworkinggroupanddevelopactionplansTostrengthenorganizationandleadership,Chinaisadvisedtoestablishacross-ministerialcoordinationmechanismtosolvemajorissuesarisingfromSAFdevelopmentanddevelopsup-portingpoliciestoadvanceprogressinacoordinatedmanner.ItisrecommendedthattheformulationofthedevelopmentandactionplansfortheSAFindustrybedominatedbythegovernmentandinvolveindustryassociationsandplatformorganizationsastheorganizer,aswellasotherstakeholdersfromacrosstheSAFsupplychain,includingairlines,refineries,aviationfuelsuppliers,aircraftmanufacturers,airports,andresearchinstitutes.Chinamayalsoadoptthesemeasures,suchas—creatingandimprovingmonitoring,reporting,audit,andmanagementsystemsforGHGemissionsfromaviationandSAF-relatedsectors;creatingneededcertificationsystems;andactivelyinvolvingitselfinthedevelopmentandimplementationofinternationalruleswithintheframeworkofCORSIA.8.3StrengthenthebasicinformationassessmentandcosteffectivenessanalysisoffeedstockChinaisalsoadvisedtostrengthencollectionandupdateofbasicinformationonvariousfeedstocksusedunderdifferenttechnicalpathwaystofindouttheirdistributionandavail-ability,soastofacilitatebetterallocationofresourcesfortheindustry.Costeffectivenessanalysisshouldalsobemadebasedonthelevelsofdifficultyofcollectingdifferentfeedstocks,technologicalreadinesslevelsandcostcurvestopromotethedevelopmentoffinancialsupportpoliciesbythegovernment.8.4GuidecollectiveactionsacrossthesupplychainCommunicationandexchangesbetweenparticipantsfromacrossthesupplychainshouldbefacilitatedtoenablecoor-dinationbetweenfuelusersandsuppliers.ThegovernmentisalsoadvisedtosupportcollaborativeinnovationinSAFamongvariouskindsofentities,andencourageoilrefineries,47▏INSTITUTEOFENERGY,PEKINGUNIVERSITYairtransportcompaniesandaviationmanufacturerstomakejointinvestmentsinSAFprojectsthatrewardinvestorswithreturnsinamarket-basedmanner,soastopromoteSAFuseonaregularandindustrialscale.8.5SupporttechnologicalinnovationOnthisfront,Chinacanadoptthefollowingmeasures—supportingtheestablishmentofaSAFtechnologyR&Dsystem;promotingthediversifieddevelopmentofdifferentSAFpathways,suchasoil-based,cellulose-based,andgreenhydrogen-basedtechnologies;guidingcompaniesandresearchinstitutestoacceleratetechnologicalinnovationandlaunchindustrial-scaledemonstrationprojects;andsupportingSAFproducerswithproprietaryintellectualpropertyrightstoexpandtheirproductioncapacityandglobalcompetitiveness.Chinahasasolidindustrialfoundationinthedomainofoil-basedaviationfuels,butthepresenceofChinesecompaniesinthefieldsofcellulose-basedandgreenhydrogen-basedaviationfuelsisminimal.ThecountryneedstoexpandR&Dspending,industry-widepartnership,andinternationalcooperationinthesefields.8.6ActivelypromotethepilotuseofSAFBasedonitsindustrialstrategy,ChinacanpilottheuseofSAFproducedfromdifferentfeedstocksandunderdifferenttechnicalpathways,takingaccountofthecharacteristicsofinto-planeservice.Buildingonitssuccessfulpilotexperienceandinviewoftheavailabilityoffeedstocksindifferentplaces,SAFproductioninfrastructureandregionallevelsofairtransportdevelopment,thecountrycanbroadenitssupporttoSAFonthedemandsidebymakingSAFavailableatmoreairports.ForairtransportcompaniesthatvoluntarilyuseSAFwitharelativelyhighshare,aholisticapproachmaybeadoptedtomanagementpoliciesonfleet,investment,pricing,credit,andtendering.Amarket-drivenapproachshouldalsobeupheldtoencouragehealthycompetition,tolowerSAFcosts,toproducereplicableandscalablepracticesandultimatelytocreateavirtuouscycleforSAFdevelopmentacrosstheentiresupplychain.INSTITUTEOFENERGY,PEKINGUNIVERSITY▏48REFERENCES1ICAO.EffectsofNovelCoronavirus(COVID-19)onCivilAviation:EconomicImpactAnalysis[EB/OL].(2022-06-10).https://www.icao.int/sustainability/Documents/COVID-19/ICAO_Coronavirus_Econ_Impact.pdf.2ICAO.EconomicImpactsofCOVID-19onCivilAviation[EB/OL].(2022-01-17).https://www.icao.int/sustainability/Pages/Economic-Impacts-of-COVID-19.aspx.3ICAO.2021globalairpassengertotalsshowimprovementfrom2020,butstillonlyhalfpre-pandemiclevels[EB/OL].(2022-01-17).https://www.icao.int/Newsroom/Pages/2021-global-air-passenger-totals-show-improvement.aspx.4ICAO.EconomicsImpactsofCOVID-19onCivilAviation[EB/OL].[2022-03-21].https://www.icao.int/sustainability/Pages/Economic-Impacts-of-COVID-19.aspx5ChinaStatisticalReportonCivilAviation2020,CAAC,June10,2021[10/06/2022].http://www.caac.gov.cn/XXGK/XXGK/TJSJ/index_1214.html.AlldatasharedinthissectionregardingtheChinesemarketcomesfromthisstatisticalreportifnotspecifiedotherwise.6ChinaStatisticalReportonCivilAviation2020,CAAC,May18,2022[10/06/2022].http://www.caac.gov.cn/XXGK/XXGK/TJSJ/index_1214.html.7IPCC.ClimateChange2022:MitigationofClimateChange(fullreport,finaldraftversion)[R/OL].[2022-04-04].https://www.ipcc.ch/report/ar6/wg3/.Note:AsfortheshareofCO2emissionsfromaviation,resultsvaryfromorganizationtoorganizationduetodifferentmeasuresandmethodsused.Forexample,IEAsaysthatCO2emissionsfromaviationin2019wereapproximatelyonebilliontons,accountingfor2.8%ofglobalemissionsfromfossilfuelenergyconsumption（https://www.iea.org/reports/tracking-aviation-2020）.AccordingtoAirTransportActionGroup(ATAG),CO2emissionsfromaviationrepresent2.1%ofman-madeCO2emissions(https://www.atag.org/facts-figures).Basedonitsdatacollectedfromdifferentsources,OurWorldinDatasaysthatGHGemissionsfromaviationaccountedfor1.9%ofglobalGHGemissionsin2016and2.1%in2018(https://ourworldindata.org/CO2-emis-sions-from-aviation).D.S.Leeandotherco-authorsbelievethataviationcontributes3%to4%iftheimpactsofbothCO2andnon-CO2GHGemissionsonglobalwarmingarefactoredin(https://www.sciencedirect.com/science/article/pii/S1352231020305689).ThisreportusesIPCCdatainviewofthisoveralldatasituation.8ICAO,TheReportontheFeasibilityofaLong-termAspirationalGoalforInternationalCivilAviationCO2EmissionsReductions,ICAO-LTAGreportAppendixR3:ResultsintheClimateScienceContext[R/OL].[2022-03-28].https://www.icao.int/environmental-protection/LTAG/Pages/LTAGreport.aspx.9AsforcarbonemissionsfromvarioussectorsinChina,foreignanddomesticresearchinstituteshavemadeestimatesusingdifferentmethodsandsourcesofdata,soresultsvarysometimes.EstimatesmadeinthisreportarebasedondatareleasedbyCAAC.10Thetermof“aviationoil”isalsousedinthesector,but“aviationfuel”ismainlyusedinthisreport.11ICAO.Longtermglobalaspirationalgoal(LTAG)forinternationalaviation[EB/OL].[2022.10.11].https://www.icao.int/environmental-protection/Pages/LTAG.aspx12ICAO.Stateadoptnet-zero2050globalaspirationalgoalforinternationalflightoperations.[2022.10.11].https://www.icao.int/Newsroom/Pages/States-adopts-netzero-2050-aspirational-goal-for-international-flight-operations.aspx13ICAO.StateActionPlansandAssistance[EB/OL].[02/08/2022].https://www.icao.int/environmental-protection/Pages/ClimateChange_ActionPlan.aspx14ICAO.AviationNetZero[EB/OL].[15/04/2022].https://www.icao.int/environmental-protection/SAC/Lists/Aviation%20Net%20Zero/ProjectViewNZ.aspx#InplviewHashfaf64a02-c0cb-4e19-a273-65956a587e8c=15IATA.Net-ZeroCarbonEmissionsby2050[EB/OL].(04/10/2021)[15/04/2022].https://www.iata.org/en/pressroom/2021-releases/2021-10-04-03/.16IATA.OurCommitmenttoFlyNetZeroby2050[EB/OL].https://www.iata.org/en/programs/environment/flynetzero/.17IATA.2050:Net-zerocarbonemissions[EB/OL].(2021-12-01).https://airlines.iata.org/analysis/2050-net-zero-carbon-emissions.18AviationBenefitsBeyondBorders.Aviationindustryreducingitsenvironmentalfootprint[EB/OL].https://aviationbenefits.org/environmental-efficiency/climate-action/.19ICAO.ClimateChange[EB/OL].https://www.icao.int/environmental-protection/pages/climate-change.aspx.20AviationBenefitsBeyondBorders.Waypoint2050[EB/OL].[11/04/2022].https://aviationbenefits.org/environmental-efficiency/climate-action/waypoint-2050/;21AviationBenefitsBeyondBorders.Aviationindustryreducingitsenvironmentalfootprint[EB/OL].[11/04/2022].https://aviationbenefits.org/environmental-efficiency/climate-action/.22WEF.DeployingSustainableAviationFuelsatScaleinIndia:ACleanSkiesforTomorrowPublication[R/OL].(10/06/2021)[07/04/2022].https://www.weforum.org/reports/deploying-sustainable-aviation-fuels-at-scale-in-in-dia-a-clean-skies-for-tomorrow-publication/.23IATA.Net-ZeroCarbonEmissionsby2050[EB/OL].(2021-10-04)[24/06/2022].https://www.iata.org/en/pressroom/2021-releases/2021-10-04-03/.DifferentscenarioanalyseswillresultindifferentestimatesaboutSAFdemand.Forexample,accordingtoonescenariointroducedbyATAGreport,Waypoint2050,SAFconsumptionwillreach445milliontonsby2050,accountingfor90%oftotalaviationfuelconsumption.https://aviationbenefits.org/environmen-tal-efficiency/climate-action/waypoint-2050/24ICAO.ICAOGlobalFrameworkforAviationAlternativeFuels[EB/OL].[24/06/2022].https://www.icao.int/environmental-protection/GFAAF/Pages/default.aspx;25IATA.FactSheet-SustainableAviationFuel[EB/OL].[24/06/2022].https://www.iata.org/en/programs/environment/flynetzero/26ASTM.StandardSpecificationforAviationTurbineFuelContainingSynthesizedHydrocarbons[EB/OL].https://www.astm.org/d7566-21.html.27ASTM.StandardSpecificationforAviationTurbineFuels[EB/OL].https://www.astm.org/d1655-21.html.28ICAO.Conversionprocesses[EB/OL].https://www.icao.int/environmental-protection/GFAAF/Pages/Conversion-processes.aspx.29TheWhiteHouse.FACTSHEET:BidenAdministrationAdvancestheFutureofSustainableFuelsinAmericanAviation[EB/OL].(2021-09-09).https://www.whitehouse.gov/briefing-room/statements-releases/2021/09/09/fact-sheet-bid-en-administration-advances-the-future-of-sustainable-fuels-in-american-aviation/.30TheWhiteHouse.FACTSHEET:BidenAdministrationAdvancestheFutureofSustainableFuelsinAmericanAviation[EB/OL].(2021-09-09).https://www.whitehouse.gov/briefing-room/statements-releases/2021/09/09/fact-sheet-bid-en-administration-advances-the-future-of-sustainable-fuels-in-american-aviation/.31MaDechao,LiuHua,XiaZuxi,ThoughtandPractice:AirworthinessCertificationofAviationFuelsunder“Fangguanfu”Reform[J],ManagementObserver,2019(32):92-94.32DaiJun,APerspectiveontheAirworthinessManagementofAviationFuels[J],CivilAviationScience&Technology,2011(2):102-104.33CAACDepartmentofGeneralAffairs,the14thFYPforGreenCivilAviationDevelopment,[EB/OL],(27/12/2021).http://www.gov.cn/zhengce/zhengceku/2022-01/28/5670938/files/c22e012963ce458782eb9cb7fea7e3e3.pdf.34CAAC,Illustrationthe14thFYPforGreenCivilAviationDevelopment[EB/OL],(27/01/2022).http://www.caac.gov.cn/XXGK/XXGK/ZCJD/202201/t20220127_211348.html.35NationalDevelopmentandReformCommission,the14thFYPforBio-economyDevelopment[EB/OL],(20/12/2021).http://www.gov.cn/zhengce/zhengceku/2022-05/10/content_5689556.htm.36DaiJun,APerspectiveontheAirworthinessManagementofAviationFuels[J],CivilAviationScience&Technology,2011(2):102-104.37CAAC,CCAR-21-2007RegulationsonCertificationofCivilAviationProductsandParts[S],Beijing,CAAC,2008:1-8.38CAAC,CAACCompletesAirworthinessCertificationofSinopecNo.1AviationBiofuelandAwardsCertificate(12/02/2014).http://www.caac.gov.cn/XWZX/MHYW/201402/t20140212_13732.html.391997:1-6.CAAC,RegulationsonDesignatedAirworthinessRepresentativesandDesignatedOrganizationalRepresentativeforCivilAircraft:CCAR-183-1997[S],Beijing:ChinaCivilAviation,1997:1-6.40CAAC,CAACCompletesAirworthinessCertificationofSinopecNo.1AviationBiofuelandAwardsCertificate(12/02/2014).http://www.caac.gov.cn/XWZX/MHYW/201402/t20140212_13732.html.41JetFuelContainingSynthesizedHydrocarbons,orcommonlyknownsasaviationbiofuel,referstoajetfuelthatcontainsconventionaljetfuelsandsynthesizedparaffinickerosine(SPK)accordingtodefinitionbyCTSO-2C701.SPKisproducedbyFTorHEFAprocessing.42CAACDepartmentofAircraftAirworthinessCertification,AirworthinessCertificationandManagementSystem[EB/OL].https://amos.caac.gov.cn/#/home43NationalEnergyAdministration,Q&AaboutBiodieselPolicy[EB/OL],(31/08/2021).http://www.nea.gov.cn/2021-08/31/c_1310158873.htm.49▏INSTITUTEOFENERGY,PEKINGUNIVERSITY44NationalEnergyAdministration,356codesfortheenergyindustry,includingDesignCodeforForcedInfiltrationEngineeringinUndergroundCoalMines[EB/OL],(22/12/2021).http://zfxxgk.nea.gov.cn/2021-12/22/c_1310420968.htm.45First-generationbiodieselisproducedviathetransesterificationoffattyacidsandtriglyceridesfromfeedstocks—suchasplantoil,animalfatandgutteroil—withsmallmoleculealcoholtoproducefattyacidmethylesters(FAME).HVO(hydrotreatedvegetableoil,alsoknownassecond-generationbiodiesel),basedonfirst-generationbiodiesel,isproducedbyhydrotreatingandisomerization,whichisparaffin-based.HVOdifferssignificantlyfromfirst-generationbiodieselbutissimilartoSAFintermsofmanufacturingprocess.AHVOproductionfacilitywithhydrogenationandisomerizationunitscanbeeasilyusedtoproduceSAF.46BeijingHaixinEnergyTechnologyCo.,Ltd.waspreviouslycalled“BeijingSanjuEnvironmentalProtection&NewMaterialsCo.,Ltd.”andwasrenamedonJuly15,2022.47CompaniesandorganizationslistedheredonotcoverallSAFandHVO-relatedorganizations.Forexample,therearemediareportsthatsomeothercompanieshavealsodevelopedSAFplans,buttheyarenotincludedbecausetheirprojectshavenotbeenverifiedtoexist.48AboutECO[EB/OL],(28/04/2022).http://www.eco.com.cn/cn/about_overview.aspx.49Towngas,AnnualReport2021[R/OL].[22/04/2022].https://www.towngas.com/tc/Investor-Relations/Financial-Information?type=Annual-Report&year=all.50TowngasSmartEnergy,Environmental,SocialandGovernanceReport2021,[R/OL].[22/04/2022].https://www.towngassmartenergy.com/sc/Social-Responsibility/Environmental,-Social-and-Governance-Report-(1)51Haixin,Aboutus,[EB/OL].[28/03/2022].http://www.sanju.cn/corporate/52LYZY,CompanyIntroduction[EB/OL].[22/04/2022].http://www.zyxny.com/text_12.html53LYZY,AnnualReport2021[R].[22/04/2022].54EssenceSecurities,BiodieselIndustryLeaderExpectedtoGrowFastGivenitsPotentialinEmissionsReductionandBenchmarkNESTE[R/OL].(14/02/2022)[22/04/2022].https://pdf.dfcfw.com/pdf/H3_AP202202141546983938_1.PDF55CNAF,Aboutus[EB/OL].[10/06/2022].https://www.cnaf.com/index.html56ThefifthtestflighthappenedwhenCathayPacifictookdeliveryofanewplanefromFrancetoHongKong(Table5-1).57Shell.CuttingEmissionsfromAviation[EB/OL].[28/04/2022].https://www.shell.com/energy-and-innovation/the-energy-future/decarbonising-aviation.html#vanity-aHR0cHM6Ly93d3cuc2hlbGwuY29tL0RlY2FyYm9uaXNpb-mdBdmlhdGlvbi5odG1s58Shell.Shell.DecarbonizingAviation:ClearedforTake-off.[R/OL].(2021)[28/04/2022].https://www.shell.com.cn/zh_cn/energy-and-innovation/the-energy-future/decarbonising-aviation.html59Shell.SustainableAviationFuel[EB/OL].[28/04/2022].https://www.shell.com/business-customers/aviation/the-future-of-energy/sustainable-aviation-fuel.html60Shell.SustainableAviationFuel[EB/OL].[28/04/2022].https://www.shell.com/business-customers/aviation/the-future-of-energy/sustainable-aviation-fuel.html61IATA.DevelopingSustainableAviationFuel(SAF)[EB/OL].https://www.iata.org/en/programs/environment/sustainable-aviation-fuels/62AviationBenefitsBeyondBorders.Sustainableaviationfuel[EB/OL].[24/05/2022].https://aviationbenefits.org/environmental-efficiency/climate-action/sustainable-aviation-fuel/63CathayPacific.CorporateSustainableAviationFuelProgram.[EB/OL].[27/06/2022].https://www.cathaypacific.com/cx/zh_HK/about-us/sustainability/climate-action/corporate-sustainable-aviation-fuel-programme.html64SomecompanieshavebeenreportedtoplannewSAFproductioncapacities,butwithoutspecifics,sothesecompaniesarenotcoveredinthisreportinviewofhighuncertainty.65SomecompanieshavebeenreportedtoplannewSAFproductioncapacities,butwithoutspecifics,sothesecompaniesarenotcoveredinthisreportinviewofhighuncertainty.66InadditiontoproductioncapacitiesundertheHEFApathway,capacitiesundertheAtJorFTpathwaymayalsoappearbefore2025,butthisishighlyuncertain.Therefore,theyarenotcoveredinthisreport.67ChinastillhasalongwaytogobeforeitcanadoptthetechnicalpathwayofusinggreenhydrogentoproduceSAFonacommercialscale.TheprospectsofproducingSAFfromenergycropsarerelativelyuncertain,soenergycropsasSAFfeedstocksarenotcoveredinthisreport.68TianYishui,ShanMing,KongGeng,MaLinwei,ShaoSi,et.Al.AStrategyStudyofChina’sBiomassEconomyDevelopment[J/OL],EngineeringScience,2021,23(1):133-140.https://www.engineering.org.cn/ch/10.15302/J-SS-CAE-2021.01.004.69Idem.Estimatesaboutavailableagriculturalandforestrywastesvarysignificantlyacrosstheindustry.Thisreportadoptsconservativeestimates.70Therearealsostudiesbelievingthattheavailabilityofforestrybiomassresourcesmaytotal300milliontons(https://www.engineering.org.cn/ch/article/20101206001).Thisreportadoptsaconservativeestimateof195milliontons.71MinistryofHousingandUrban-RuralDevelopment.ChinaUrban-RuralConstructionStatisticalYearbook.https://www.mohurd.gov.cn/file/2021/20211012/dae27f9eb22debfd6d1e7965040b76ff.zip.72Marginallandreferstolandthatcannotbeusedtoproducefoodcrops,butcanbeusedgrowstressresistantenergycrops.73EUR-Lex.DIRECTIVE(EU)2018/2001OFTHEEUROPEANPARLIAMENTANDOFTHECOUNCIL[EB/OL].(11/12/2018).https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.328.01.0082.01.ENG&toc=O-J:L:2018:328:TOC.74EuropeanCommission.RenewableEnergy–Recastto2030(REDII)[EB/OL].https://joint-research-centre.ec.europa.eu/welcome-jec-website/reference-regulatory-framework/renewable-energy-recast-2030-red-ii_en.75EuropeanCommission.Sustainableaviationfuels–ReFuelEUAviation[EB/OL].https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12303-Sustainable-aviation-fuels-ReFuelEU-Aviation_en.76EPA.SummaryoftheEnergyIndependenceandSecurityAct[EB/OL].https://www.epa.gov/laws-regulations/summary-energy-independence-and-security-act.77U.S.DepartmentofEnergy.SummaryoftheEnergyIndependenceandSecurityAct[EB.OL].https://afdc.energy.gov/laws/eisa.78IATA.Netzero2050sustainableaviationfuels[EB/OL].https://www.iata.org/flynetzero/.79NationalEnergyAdministration,Q&Aaboutbiodieselpolicy[EB/OL].http://www.nea.gov.cn/2021-08/31/c_1310158873.htm.80TheWhiteHouse.FACTSHEET:BidenAdministrationAdvancestheFutureofSustainableFuelsinAmericanAviation[EB/OL].https://www.whitehouse.gov/briefing-room/statements-releases/2021/09/09/fact-sheet-biden-administra-tion-advances-the-future-of-sustainable-fuels-in-american-aviation/.81OfficeofENERGYEFFICIENCY&RENEWABLEENERGY.SustainableAviationFuelGrandChallenge[EB/OL].https://www.energy.gov/eere/bioenergy/sustainable-aviation-fuel-grand-challenge.InstituteofEnergy,PekingUniversityAdd.:Rm.438PekingUniversityYanyuanBuilding,No.5YiheyuanRoad,HaidianDistrict,Beijing,ChinaZ.C.:100871Email:genergy@pku.edu.cnTel:+86-10-62751150HTTPS://ENERGY.PKU.EDU.CN/Thisreportusedenvironmentalfriendlypaper.