*BPBeijing — Chinese biofuel firm Zhejiang Jiaao Enprotech said on Friday its sustainable aviation fuel (SAF) unit has entered an investment deal with BP, the first alliance involving a global oil major in China’s nascent green aviation fuel.
BP has agreed to invest 354 million yuan ($49.56 million) for a 15% stake in Lianyungang Jiaao Enproenergy Co, which is building a 500,000 ton per year SAF plant in the eastern coastal city of Lianyungang, a company executive told Reuters.
Jiaao is one of China’s first investors spending more than a billion dollars turning waste cooking oil into the lower-carbon aviation fuel for export and to meet domestic demand.
China is the world’s second-largest aviation fuel market with about 11% of global jet fuel use.
Jiaao announced the investment agreement with BP on its on its WeChat account late Thursday.
The company is one of China’s largest biodiesel producers and counts global oil majors Shell , Exxon Mobil and TotalEnergies among its clients.
Burning sustainable aviation fuel can reduce CO2 emissions by around 80% versus traditional jet fuel, according to data cited by Airbus.
Beijing has called for promoting sustainable aviation fuel, but has not rolled out domestic mandates or subsidies, and most of China’s small biofuel production is exported.
BP is one of the global oil majors investing in lower-carbon energy including recent plans to build facilities in Spain and Germany that could potentially create sustainable jet fuel and green hydrogen.
($1 = 7.1432 Chinese yuan renminbi)
Reporting by Chen Aizhu, Liz Lee, Colleen Howe and Shanghai newsroom; Editing by Himani Sarkar and Michael Perry – Reuters
