Discussion-Could China be the next SAF powerhouse?

[YorkRailFan]

I've been reading through the November 2023 edition of Air Transport World (ATW) magazine, and in the main story (Sustainable Aviation Fuel or SAF), it touches on the possibility of China becoming a powerhouse for SAF production. China is yet to release their stance/policy on SAF in aviation, with SAF becoming a huge potential market, China could jump in. While this may seem ridiculous to some, one must remember how China dominated the EV market in Europe overnight, and how China is the world's number one manufacturing hub. Additionally, the EU currently imports a lot of SAF from the US, meaning that China could potentially become Europe's number one supplier if they can undercut the US on pricing (which they almost certainly could).

 

[birchesgreen]

Maybe though China has trouble growing sufficient food for the population never mind stuff for bio-fuel. You should never underestimate them though!

 

[YorkRailFan]

Maybe though China has trouble growing sufficient food for the population never mind stuff for bio-fuel. You should never underestimate them though!

Remember Mao in the 50's and 60's with the Great Chinese Famine, Mao prioritized global image over his people. Perhaps China will develop SAF to increase their image and make them look better. But as you said, we should never underestimate them.

 

[birchesgreen]

Remember Mao in the 50's and 60's with the Great Chinese Famine, Mao prioritized global image over his people. Perhaps China will develop SAF to increase their image and make them look better. But as you said, we should never underestimate them.

The big issue developing for them and their agriculture is a lack of water. I can see them looking into SAF from a strategic fuel point of view because they are reliant on foreign imports of petrochemicals.

 

[YorkRailFan]

The big issue developing for them and their agriculture is a lack of water. I can see them looking into SAF from a strategic fuel point of view because they are reliant on foreign imports of petrochemicals.

Same here, and to potentially control another lucrative market.

 

[Magdalia]

I've been reading through the November 2023 edition of Air Transport World (ATW) magazine, and in the main story (Sustainable Aviation Fuel or SAF), it touches on the possibility of China becoming a powerhouse for SAF production.

Maybe though China has trouble growing sufficient food for the population never mind stuff for bio-fuel.

The big issue developing for them and their agriculture is a lack of water.

I don't know much about sustainable aviation fuel, but, wearing my economist's hat, I think it is a mistake to assume that, in order to do this, China needs to grow lots of plants in China. The plants could be grown in Africa and South America. China could then transport the plants to China before turning them into sustainable aviation fuel, or it could build the refineries in Africa and South America and do the transportation after the plants have been refined into sustainable aviation fuel.

 

[birchesgreen]

I don't know much about sustainable aviation fuel, but, wearing my economist's hat, I think it is a mistake to assume that, in order to do this, China needs to grow lots of plants in China. The plants could be grown in Africa and South America. China could then transport the plants to China before turning them into sustainable aviation fuel, or it could build the refineries in Africa and South America and do the transportation after the plants have been refined into sustainable aviation fuel.

They could but then they would still run into the same logistical and potential blockade issues as transport of the black stuff.

 

[YorkRailFan]

I don't know much about sustainable aviation fuel, but, wearing my economist's hat, I think it is a mistake to assume that, in order to do this, China needs to grow lots of plants in China. The plants could be grown in Africa and South America. China could then transport the plants to China before turning them into sustainable aviation fuel, or it could build the refineries in Africa and South America and do the transportation after the plants have been refined into sustainable aviation fuel.

That would increase costs, lowering Chinese competitiveness and create potential areas for a foreign power (the US) to block off parts of this supply chain.

 

[Magdalia]

That would increase costs

Not necessarily. It could be much cheaper to grow in Africa than in China, that would offset any increased transport costs. Furthermore long distance transport of bulk commodities by sea is cheaper than by land, and China is a very big country.

 

[YorkRailFan]

Not necessarily. It could be much cheaper to grow in Africa than in China, that would offset any increased transport costs. Furthermore long distance transport of bulk commodities by sea is cheaper than by land, and China is a very big country.

It would increase complexities in the supply chain.

 

[AlastairFraser]

It depends. If they could find a way of growing SAF feedstock like e.g. Jatropha plants without using existing limited agricultural land (perhaps on rafts in the South China Sea), then it's possible.

 

[YorkRailFan]

It depends. If they could find a way of growing SAF feedstock like e.g. Jatropha plants without using existing limited agricultural land (perhaps on rafts in the South China Sea), then it's possible.

If China has the will to, then they will.

 

[AlastairFraser]

If China has the will to, then they will.

Well, perhaps, but they may focus investment on batteries, if it is more economic.

 

[YorkRailFan]

Well, perhaps, but they may focus investment on batteries, if it is more economic.

True, although China is making a lot of money by simply exporting the rare earth materials, they may focus on microchips as a bigger priority though.

 

[AlastairFraser]

True, although China is making a lot of money by simply exporting the rare earth materials, they may focus on microchips as a bigger priority though.

They could make even more by exporting complete batteries with their low labour costs - as for microchips, they may focus on a few foundries for domestic and perhaps Russian demand, but most major buyers get them from the more established Taiwanese foundries.

 

[YorkRailFan]

They could make even more by exporting complete batteries with their low labour costs - as for microchips, they may focus on a few foundries for domestic and perhaps Russian demand, but most major buyers get them from the more established Taiwanese foundries.

They need microchips for domestic use as they can't buy them from TSMC anymore, I believe.

 

[AlastairFraser]

They need microchips for domestic use as they can't buy them from TSMC anymore, I believe.

With all the resources they have, building one or 2 fabrication foundries shouldn't drain too many resources.

 

[YorkRailFan]

With all the resources they have, building one or 2 fabrication foundries shouldn't drain too many resources.

True, knowing China, they would set up microchip, battery and SAF production all at once.

 

[Class 317]

SAF can be produced synthetically by combining Hydrogen produced from renewables with carbon from the air or even carbon from industrial waste streams.

Doesn't necessarily need a biofuel element.

China might be able to produce SAF this way cheaper using abundant Solar PV from one of the desert or semi arid areas.

 

[AlastairFraser]

True, knowing China, they would set up microchip, battery and SAF production all at once.

Especially if they get to turn Russia into a vassal state and get access to their rare earth minerals

SAF can be produced synthetically by combining Hydrogen produced from renewables with carbon from the air or even carbon from industrial waste streams.

Doesn't necessarily need a biofuel element.

China might be able to produce SAF this way cheaper using abundant Solar PV from one of the desert or semi arid areas.

True, but the energy loss in green hydrogen production is currently absurd, and they would have to build desalination plants as water shortages are quite severe in some areas.

 

[YorkRailFan]

Especially if they get to turn Russia into a vassal state and get access to their rare earth minerals

As well as bargaining with Central Asian, former Soviet countries.

 

[AlastairFraser]

As well as bargaining with Central Asian, former Soviet countries.

They don't really have the volume of rare earth minerals Russia does and the price Russia can sell them for in the limited market the Russians have created for themselves.

 

[YorkRailFan]

They don't really have the volume of rare earth minerals Russia does and the price Russia can sell them for in the limited market the Russians have created for themselves.

Kazakhstan has a lot of rare Earth materials.

 

[AlastairFraser]

Kazakhstan has a lot of rare Earth materials.

However, they'll not be as cheap as Russian rare earth minerals for the foreseeable future!

 

[YorkRailFan]

However, they'll not be as cheap as Russian rare earth minerals for the foreseeable future!

But they have some materials Russia doesn't have.

 

[AlastairFraser]

But they have some materials Russia doesn't have.

Perhaps, I doubt it though.