Cinda Securities: Strong demand in the EU, SAF prices continue to rise

The Zhitong Finance App learned that Cinda Securities released a research report saying that as of December 16, 2025, European SAFFOB prices reached 2,300-2,320 US dollars/ton, up about 25% from the beginning of the year. Domestic FOB prices rose simultaneously to 2100-2,300 US dollars/ton, an increase of about 24% from the beginning of the year. Strong overseas demand and raw material cost support have jointly dominated the SAF price upward cycle in this round. Currently, global SAF production and consumption will increase dramatically, and the SAF industry has significant “policy-driven” attributes. IATA predicts SAF production will reach 06 billion tons (7.9 billion litres) in 2025, accounting for 2% of total fuel demand, with appropriate government policy support.

Cinda Securities's main views are as follows:

Aviation decarbonization drives rapid growth in SAF demand, and SAF prices continue to rise

Since 2025, SAF prices have fluctuated. In the first half of the year, due to delays in demand implementation and production capacity to be released, there was a strong rebound in the first half of the year, driven by a geographical conflict between Iran and Israel leading to a rise in raw oil prices, the European Union's “RefuelEuAviation” law officially entering the implementation period, and the United Kingdom's simultaneous launch of a 2% SAF mandatory blending policy, and global SAF demand ushered in rapid growth. The surge in demand directly contributed to a sharp rise in prices. According to Baichuan Yingfu data, as of December 16, 2025, European SAFFOB prices reached 2,300-2,320 US dollars/ton, up about 25% from the beginning of the year. Domestic FOB prices simultaneously rose to 2100-2,300 US dollars/ton, an increase of about 24% from the beginning of the year. Strong overseas demand and raw material cost support have jointly dominated this upward price cycle.

HEFA dominates the market in the short term, and PTL has the greatest room for long-term cost reduction

Currently, there are four main categories of SAF production methods. As of January 2025, there are 11 approved SAF production processes, mainly certified by the American Society for Materials and Testing (ASTM). The IATA report highlights that apart from HEFA, all other technology routes have yet to achieve large-scale commercial application. The speed of technology promotion is the main bottleneck limiting the production of more SAF using existing raw materials. The Feto synthesis and alcohol spraying process is gradually shifting from the demonstration stage to commercial operation. In particular, its raw materials are more selectable, including agricultural and forestry waste, municipal solid waste, industrial waste, etc., and the market share will increase rapidly from 2030 to 2050.

The electric liquid transfer process is still in the early stages of testing, but since its emission reduction ability is more significant and there is almost no need to worry about raw materials, it is likely to become the most important technology path in the medium to long term. McKinsey expects HEFA, ATJ, FT, and PTL costs to drop by 22%, 32%, 24%, and 67% respectively from 2020 to 2050, and technological iteration will suppress high-end SAF premiums for a long time.

The global SAF mandatory blending policy is being implemented at an accelerated pace, and production and consumption will increase dramatically

Global SAF production and consumption will increase dramatically, and the SAF industry has significant “policy-driven” attributes. Since the price of SAF is higher than that of traditional aviation fuel, the main driving force for SAF applications at this stage is still international and domestic emission reduction policies. Most of these policies clearly state specific plans and goals for applying SAF, while others use reducing the carbon intensity of aviation fuel as a measure.

IATA predicts that with appropriate government policy support, SAF production will reach 06 million tons (7.9 billion litres) in 2025, accounting for 2% of total fuel demand; global SAF demand is expected to reach 18 million tons (23 billion liters) by 2030; after 2035, as SAF prices become more competitive, its market demand will expand further, and by 2050, the total global demand for SAF will reach 350 million tons.

China's SAF industry is expanding rapidly and is expected to become a major global exporter

According to Baichuan Yingfu data, project data as of October 2025 shows that China's SAF industry is in a period of rapid expansion, with production capacity of about 1.7 million tons/year, mainly in Shandong, Zhejiang, Jiangsu, etc., all using the HEFA process and using waste cooking oil (UCO) as raw materials. As construction and planning projects progress one after another, it is expected that 2025 to 2027 will usher in a period of concentrated production capacity release, with a total additional production capacity of about 5.5 million tons/year. Of these, 1.25 million tons/year is expected to be added in 2025, 3.75 million tons/year in 2026, and 500,000 tons/year in 2027. In addition, a production capacity of about 3.45 million tons is in the proposed or planning stage.

Cinda Securities believes that if all production capacity is implemented as scheduled, China's total SAF production capacity will exceed 10.65 million tons/year, which will not only meet the domestic aviation industry's low-carbon transformation needs, but is also expected to make China a major global SAF exporter and promote the international development of green energy.

Investment advice

Against the backdrop of a rapid increase in the mandatory blending ratio of SAF around the world, the gap between the EU and the UK continuing to expand, and domestic UCO raw materials and processing advantages highlighted, enterprises with mature HEFA processes, export white lists, and the first to release production capacity are expected to enjoy the dividend of a sharp increase in volume and price.

In terms of targets, it is recommended to focus on: Haixin Energy (300072.SZ) has the highest hydrocarbon-based firewood production capacity, and the heterogeneous project has been successfully completed and put into operation; Pengyao Environmental Protection (300664.SZ) has focused on the field of environmentally friendly water treatment for a long time, and successfully tested SAF and completed the first batch of international exports in 2024; Shangao Huaneng (000803.SZ) is a leading domestic organic solid waste treatment company, which lays out the second growth curve of HMOSs.

Risk Alerts

Policy progress falls short of expectations; export risk; risk of fluctuations in raw material prices; risk of overcapacity; risk of technological progress falling short of expectations.