Biofuel producers in China have plans to invest more than US$1bn in the country’s first plants to turn waste cooking oil into sustainable aviation fuel (SAF) for export and to meet domestic demand once Beijing introduces mandates for its use, Reuters reported.

Accounting for about 11% of global jet fuel use, China is the world’s second largest aviation market and the announcement of its policy on SAF use for 2030 could lead to billions of dollars of investment in the sector, industry executives told Reuters.

Chinese biofuel firms in China are planning to start up plants over the next 18 months to produce a total of more than 1M tonnes/year of SAF, according to six SAF investors quoted in the 17 May report.

That volume would be equivalent to 2.5% of China's current annual demand for aviation fuel, Reuters wrote.

Once operational, the projects would use up supplies of used cooking oil (UCO) feedstock that China currently exported, the company executives were quoted as saying .

The companies included Junheng Industry Group Biotech, Zhejiang Jiaao Enprotech and Tianzhou New Energy, the report said.

Last year, China exported a record 2.05M tonnes of UCO, mostly to the USA and Singapore, and also supplied feedstock to biofuel refiners such as Finnish firm Neste.

“We’re in discussion with airlines and oil majors for first exports and have proposed to the Chinese government to announce a clear SAF target,” said Eason Chen, a vice president of Tianzhou New Energy, which is building a 200,000 tonnes/year SAF plant in the southwestern province of Sichuan.

According to the report, China currently produces less than 100,000 tonnes of SAF, mostly at a plant operated by EcoCeres, which has been making the fuel since 2022 in the eastern region for export.

The companies planning to make SAF expected a mandate for a compulsory blend of 2%-5% of SAF into an aviation fuel market forecast to reach 50M tonnes in 2030, according to industry executives familiar with policy discussions, who spoke to Reuters on condition of anonymity.

Although modest compared to the European Union and Japanese targets of 6% and 10% respectively, a 5% mandate would be a jump from the 50,000 tonne SAF target for 2025 outlined by Beijing a few years previously and would equate to 2.5M tonnes of SAF use in China by 2030, the executives said.

Although global consumption of SAF in 2023 totalled 450,000-500,000 tonnes – double the previous year’s volume – it represented only 0.1% of total jet fuel consumption, according to the International Air Transport Association (IATA).