Sinopec has completed the restructuring of China National Aviation Fuel, known as CNAF, with the goal of consolidating an integrated aviation fuel business in China. The operation joins the group’s refining capacity with CNAF’s national supply, storage, and refueling network.
The reorganization seeks to strengthen the security of aviation kerosene supply and improve coordination between production, transport, sales, and airport services. It will also allow for reduced operating costs and increased responsiveness to changes in demand.
Sinopec integrates aviation fuel production and supply
Sinopec is China’s largest refinery by capacity and one of the country’s leading producers of aviation fuel. CNAF, for its part, operates an extensive network dedicated to the purchase, transport, storage, quality control, marketing, and direct supply to aircraft.
With the integration, Sinopec will be able to connect its refining structure with CNAF’s logistics network. This model seeks to replace a fragmented chain with a coordinated operation and greater control over the national supply.
The company believes that this structure will strengthen the sector’s resilience against logistical disruptions, price variations, and tensions in international oil markets.
Jet fuel demand to grow in China
Aviation fuel is emerging as one of the main growth drivers within the Chinese refined products market. This trend contrasts with lower gasoline and diesel consumption due to the economic slowdown and the advancement of electric vehicles.
According to forecasts cited by Sinopec, Chinese jet fuel consumption could rise from 39.28 million tons in 2024 to 75 million tons in 2040. That figure is equivalent to approximately 591 million barrels.
The projected growth responds to the expansion of passenger and cargo air transport. It also increases the need to ensure stable production and distribution channels at the country’s main airports.
The operation opens space for sustainable aviation fuel
Furthermore, Sinopec intends to use the reorganization to accelerate the development of sustainable aviation fuel, or SAF. This product can be manufactured from used oils, biomass waste, renewable sources, and recycled carbon.
SAF can significantly reduce emissions during its life cycle compared to conventional fuel. However, its global production remains limited and maintains higher costs than traditional kerosene.
Sinopec and CNAF will be able to combine research, refining, logistics, and marketing capabilities to scale up SAF. Likewise, the integration will facilitate joint projects with airlines, airports, and technology providers.
Sinopec seeks to compete with major international suppliers
The Chinese aviation fuel industry has operated for years with separate activities among producers, distributors, and refueling operators. This model has limited efficiency and competitiveness against large integrated international companies.
With the new structure, Sinopec seeks to offer more comprehensive services within and outside China. The company also intends to strengthen its presence in international markets and support the expansion of Chinese airlines.
The reorganization of CNAF makes aviation fuel a centerpiece of Sinopec’s refining business. The group is betting on growing air demand in a market where gasoline and diesel are losing momentum.
Source: Reuters
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