Sinopec and China Aviation Oil officially announce restructuring.

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On January 8th, with the approval of the State Council, Sinopec Group and China National Aviation Fuel Group have undergone a restructuring.

Industry analysts believe that the strong alliance between Sinopec and China National Aviation Fuel will help enhance the resilience of the aviation fuel industry chain and ensure energy security for the aviation industry.

According to S&P forecasts, China's aviation fuel consumption will increase from 39.28 million tons in 2024 to 75 million tons by 2040. After the restructuring of the two companies, they can leverage multiple advantages such as integrated refining and chemical operations and a secure aviation fuel supply system, reduce intermediate links, lower supply costs, and provide strong assurance for China's aviation energy security.

The strong alliance between Sinopec and China National Aviation Fuel will help enhance the international competitiveness of China's aviation fuel industry.

Currently, the major international aviation fuel service providers are mainly integrated petrochemical companies, such as Shell, BP, ExxonMobil, Total, etc. These companies are large-scale, have strong capabilities in fuel quality and infrastructure, have good reputations, and well-developed networks, offering clear comparative advantages. In China, businesses such as aviation fuel production, sales, and refueling are handled by different companies, and the overall competitiveness needs to be improved when compared with large international aviation fuel providers. After the restructuring of the two companies, they will achieve complementary advantages, helping the aviation fuel industry further grow stronger, better, and bigger, thereby increasing competitiveness.

The strong alliance between Sinopec and China National Aviation Fuel will also promote high-quality development of the sustainable aviation fuel industry.

Carbon emissions from the aviation industry are the most challenging to reduce in the transportation sector. Sustainable Aviation Fuel (SAF) is recognized as the main emission reduction pathway. Sinopec is the earliest enterprise in China to have SAF production capability, filling the gap in the application of domestic SAF in domestic aircraft models. China National Aviation Fuel holds an important position in the promotion, application, and ecosystem construction of SAF. After the restructuring, the two companies will deeply integrate their advantages in technological R&D, industrialization capabilities, storage, transportation and refueling, international trade, and other fields related to SAF, promoting SAF R&D, use, and continuous iteration, driving high-quality development of the industry chain, and helping the aviation industry reduce emissions and lower carbon.

Source: People's Daily

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