Sinopec accelerates green transition with SAF, carbon trading: Executive

Sinopec, China's largest refiner, is accelerating its green transformation through expanded sustainable aviation fuel trading and comprehensive carbon management initiatives, positioning the company to capitalize on growing global demand for low-carbon energy solutions, Lv Lianggong, senior vice president with Sinopec, said at the 14th China International Oil and Gas Trade Congress in Shanghai Nov. 8.

The energy giant completed its first domestic SAF export in 2024, Lv said, marking a significant milestone in China's development of biofuel trade.

The company's SAF trading volumes have maintained rapid growth momentum since the beginning of this year, Lv added, with full-year projections reaching 120,000 metric tons.

Sinopec's flagship refining complex, the 38 million mt/year Zhenhai Petrochemical & Refining, has been the sole SAF producer among China's state-owned oil companies, with a capacity of 100,000 mt/year. However, SAF production at the refinery has been on an ad hoc basis, mainly due to huge losses resulting from high feedstock costs, market sources said.

The company plans to upgrade its units to enhance efficiency. A source close to Sinopec's SAF trading business said the refinery is going to upgrade its units to raise its SAF yields, while the refinery source with Zhenhai was not able to comment when contacted. A Shanghai-based SAF trading manager said the yields are typically at about 70%-80%.

Simultaneously, Sinopec is exploring opportunities in the green methanol market as part of its broader low-carbon trading portfolio expansion, Lv said during the speech, reflecting its commitment to developing multiple revenue streams within the renewable fuels sector.

Carbon management initiatives

Beyond biofuel trading, Sinopec has implemented comprehensive carbon emission management across its entire trading value chain. In 2023, the company executed China's first full life cycle carbon-neutral petroleum transaction, Lv said, establishing a precedent for the domestic energy sector's environmental accountability measures.

The company's carbon trading activities expanded internationally in 2024 with its first transaction in the EU's carbon market, Lv added.

According to Lv, Sinopec has continued conducting carbon trades in international markets this year to complement its oil and gas trading operations, demonstrating its commitment to integrating environmental considerations into core business activities.

These initiatives align with China's broader decarbonization goals and the global energy transition toward cleaner alternatives. The SAF market has gained particular momentum as airlines worldwide seek to reduce their carbon footprint while meeting increasingly stringent environmental regulations.