On August 22, BP Group's Senior Vice President of Biofuels Growth, Nigel Dunn, Vice President of Business Schoelzel Philipp, and Deputy Director of Business for the Asia-Pacific Region, Gu Xian, visited our company. The two parties officially signed an equity investment agreement, marking a milestone collaboration that will see both sides engage in deep cooperation across multiple fields. This partnership aims to explore new development opportunities and achieve the grand objective of mutual benefit and win-win results.
On August 22, Shen Jian, Chairman of Lianyungang Jiaao New Energy Co., Ltd., and Nigel Dunn, Senior Vice President of BP Group's Biofuels Growth Business, signed the equity investment agreement on behalf of both companies.
BP has been operating in China since the early 1970s and is one of the leading foreign-invested enterprises in the domestic energy sector. BP's key business activities in China include aviation fuel supply and refueling services, technology services, retail of refined oil products, lubricants blending and sales, oil and gas supply and trading, LNG terminal operations and pipeline management, electrification and mobility, and venture capital.
As a leading biodiesel producer in China, Jiaao Environmental's collaboration with BP will create a complementary effect. This partnership will not only enhance Lianyungang Jiaao's capital strength, promote the launch of new projects, and advance the production of SAF, but also benefit Jiaao's strategic planning and long-term interests. It will further enhance the company's competitive edge and profitability, promoting Jiaao's sustainable development.
Strategic Significance of the BP Partnership: Strong Collaboration and Complementary Advantages
The partnership between Jiaao Environmental and BP, a foreign energy giant, brings together strengths and allows for the sharing of BP's extensive management experience. In the comprehensive utilization of waste oil resources, Jiaao Environmental can leverage its advantages in transportation costs and regional sales. The strategic significance of this collaboration with BP is substantial.
BP, during the first Civil Aviation Green Development Forum, expressed that China is an important market for BP Aviation and that the company will continue to work closely with partners to actively develop aviation fuel business in China.
The Future of SAF: Promising Development in Transforming the "Hard-to-Abate" Aviation Sector
Sustainable Aviation Fuel (SAF) is a liquid alternative to conventional jet fuel, made from renewable resources and waste materials. Its feedstock can include waste oil, household waste, energy crops, carbon dioxide, and industrial gases, among other biomass and non-biomass materials. Xie An, Director of Deloitte China's Sustainability and Climate Change Institute, pointed out that the aviation industry is recognized as a "hard-to-abate" sector. However, SAF is a powerful commercial tool to reduce the emission intensity of air travel in the near term. SAF is a drop-in fuel that can reduce carbon emissions by up to 85% compared to traditional aviation fuel, depending on feedstock and production processes. Various SAF stakeholders, including raw material and fuel suppliers, airlines, aircraft manufacturers, logistics companies, investors, and regulators, remain optimistic about low-carbon solutions.
Globally, the aviation industry has already set aggressive goals to reduce carbon emissions. In addition to developing new aircraft technologies and improving operational and infrastructure efficiencies, the development of SAF is one of the most critical measures to achieve net-zero targets. According to the International Air Transport Association (IATA), 65% of emission reductions by 2050 will be achieved through the use of SAF.
As China's "Dual Carbon" goals and the 14th Five-Year Plan policies are gradually implemented, they provide essential support for carbon reduction and decarbonization across industries, including the aviation sector, while accelerating sustainable development. China defines SAF as a non-fossil fuel that meets sustainability standards. By using cleaner, renewable materials such as waste cooking oil and animal and vegetable waste fats instead of traditional petroleum-based aviation fuels, the aim is to reduce carbon dioxide emissions and promote the sustainable development of the aviation industry. SAF can be blended with traditional jet fuel in certain proportions and is chemically equivalent to conventional jet fuels, requiring no modification to aircraft engines. Existing infrastructure can support its distribution and storage, significantly reducing the cost of product replacement.
The SAF produced by Lianyungang Jiaao using various waste oils as feedstock offers higher carbon reduction values compared to SAF made from food crops like soybean oil and rapeseed oil. Additionally, it does not compete with human food resources, making it more sustainable and promising for future development.