Chinese biofuel company Zhejiang Jiaao Enprotech has announced a significant investment deal with BP, marking the first collaboration between a global oil major and China’s emerging sustainable aviation fuel (SAF) sector. BP will invest 354 million yuan (approximately $49.56 million) in exchange for a 15% stake in Lianyungang Jiaao Enproenergy Co., which is in the process of constructing a SAF plant capable of producing 500,000 tons per year in Lianyungang, a coastal city in eastern China.
Jiaao is recognized as one of the pioneering investors in China’s biofuel landscape, committing over a billion dollars to convert waste cooking oil into lower-carbon aviation fuel, aimed at both export and domestic markets. As the world’s second-largest aviation fuel market, China accounts for about 11% of global jet fuel consumption.
The investment agreement was shared by Jiaao on its WeChat account, signaling a strategic move towards enhancing its production capabilities in the green aviation fuel sector. The company is already one of China’s largest biodiesel producers, serving notable clients including global oil giants such as Shell, Exxon Mobil, and TotalEnergies.
According to Airbus, utilizing sustainable aviation fuel can lead to an approximate 80% reduction in CO2 emissions compared to conventional jet fuel. Although the Chinese government has advocated for the promotion of sustainable aviation fuel, it has yet to establish domestic mandates or subsidies, resulting in the majority of the country’s small-scale biofuel production being directed towards exports.
BP’s involvement aligns with its broader strategy to invest in lower-carbon energy initiatives, including plans for sustainable jet fuel and green hydrogen production in Spain and Germany.