China Post Securities: SAF+LNG dual-demand drive, domestic industry chain prospects are promising.

China Postal Securities released a research report stating that under the changes in the trade pattern caused by the EU, there are still multiple development opportunities for the bio-diesel industry in China, starting from three perspectives: the global demand growth of bio-jet fuel, IMO's push for net zero emissions target, and the steady promotion of domestic bio-diesel. Emphasis on the double demand for SAF and ship fuel will drive the domestic bio-diesel industry chain. It is recommended to pay attention to listed companies with large-scale bio-diesel production capacity in China. The raw materials of bio-diesel in China are all waste oils, which have special environmental and resource characteristics. The raw materials are an important part of the domestic bio-diesel industry chain. It is recommended to focus on companies specializing in collecting waste oils. Main points of China Postal Securities are as follows: Bio-jet fuel (SAF) The EU explicitly excludes SAF from the scope of the current anti-dumping round, and with the implementation of mandatory blending in the EU and the successive release of SAF promotion policies in other regions, new industry demand continues to surge. Under a neutral assumption, it is estimated that global SAF demand will reach 15.5 million tons by 2030 and 196 million tons by 2050. A huge supply-demand gap for SAF will appear globally by 2035. The bank believes that China's SAF products will continue to shine in international competition due to the excellent carbon reduction advantage of raw materials. Bio-ship fuel The International Maritime Organization (IMO) has set a rigid red line for decarbonization of the maritime industry through a series of milestone meetings and policies. The "Ship Greenhouse Gas Emission Reduction Strategy" adopted at the MEPC 80 meeting in 2023 clearly sets the goal of achieving net zero emissions by 2050. Bio-ship fuel has a high degree of compatibility with policy requirements and shows great potential for application: its "plug-and-play" characteristics can directly adapt to existing ship engines and refueling facilities without the need for extensive modifications, making it an economical transitional fuel. Under the dual drive of policy constraints and market demand upgrades, bio-ship fuel is becoming the core transitional solution for decarbonizing the maritime industry, and its future application space will continue to expand. Domestic market increment There are frequent policies related to domestic bio-diesel in China, and the market potential is huge. On October 13, 2025, the National Development and Reform Commission issued a public consultation on the "Implementation Measures for the Minimum Proportion of Renewable Energy Consumption and the Weighted Responsibility System for Renewable Energy Power Consumption (Draft for Soliciting Opinions)", which includes biofuels in the non-electric consumption minimum proportion target, and in the supplementary provisions, it proposes "setting the minimum proportion target for sustainable aviation fuel consumption and monitoring evaluation and assessment supervision separately", which strengthens the certainty of the mandatory addition of bio-jet fuel policy. Risk warning: Risks of policies not being implemented as expected; risks of changes in trade policies; risks of overly rapid capacity expansion.