Aviation industry experts in China foresee a modest short-term increase in the consumption of sustainable aviation fuel (SAF), primarily due to production constraints and high costs. Despite the challenges, recent policy changes have sparked some optimism. Beijing has removed the export tax rebate on a key biofuel feedstock, which could potentially boost the domestic supply and reduce production costs of SAF.
The high production costs remain a significant hurdle for the widespread adoption of sustainable aviation fuel. Currently, SAF is priced at three to five times the cost of conventional jet fuel, making it less attractive for airlines to switch from standard jet fuel. This price disparity stems from the complex and costly production processes involved in manufacturing SAF.
Limited domestic supply further complicates the scenario. The Chinese market, crucial for the growth of sustainable aviation fuel, faces significant supply constraints. The removal of the export tax rebate on biofuel feedstocks is seen as a step towards alleviating this issue. Industry analysts suggest that this policy change could potentially lower production costs and enable a more robust domestic supply chain.
Stakeholders across the aviation industry are advocating for increased use of sustainable aviation fuel. They argue that despite its current high costs, SAF represents a critical component in the sector's efforts to reduce carbon emissions and meet environmental targets. The transition to cleaner fuel sources is essential for achieving long-term sustainability goals.
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