ZHEJIANG JIAAO ENPROTECH STOCK CO., LTD. Announces Strategic Investment by China National Aviation Fuel Group in Lianyungang Jiaao SAF Project
July 25, 2025 – We, ZHEJIANG JIAAO ENPROTECH STOCK CO., LTD. ("Jiaao Enprotech"), announced today that China National Aviation Fuel Group (CNAF) intends to make a strategic investment in our subsidiary, LIANYUNGANG JIAAO ENPROENERGY CO., LTD. ("Lianyungang Jiaao"), as disclosed in our Announcement on Capital Increase and Share Expansion of a Controlled Subsidiary with Introduction of Investors and Waiver of Preemptive Rights.
CNAF, a central enterprise directly administered by SASAC, is Asia's largest integrated aviation fuel service provider covering procurement, transportation, storage, testing, sales, and refueling. This development not only signals growing market acceptance of Sustainable Aviation Fuel (SAF) but also highlights the promising future of bio-aviation fuel.
Policy Support Accelerates Industry Growth
Amid the global aviation industry's accelerated transition to "net-zero emissions," China has implemented multifaceted support policies for bio-aviation fuel. In May 2024, the State Council's Energy Conservation and Carbon Reduction Action Plan explicitly called for "promoting advanced bio-liquid fuels and sustainable aviation fuels." In October 2024, the NDRC and other departments emphasized "developing green fuels like bio-aviation fuel based on local conditions" in the Renewable Energy Substitution Action Guidance.
China has launched SAF pilot programs at four major airports, with plans to expand scale by 2025, focusing on routine bio-jet fuel refueling in the Yangtze River Delta and Beijing-Tianjin-Hebei regions. The International Air Transport Association (IATA) predicts SAF will drive 65% of aviation's carbon reduction by 2050, representing a market orders of magnitude larger than today. As the world's second-largest aviation market, China's sustained policy support is unlocking opportunities for domestic enterprises.
Breakthrough in Export Accreditation
In May 2025, we secured approval from the Ministry of Commerce and three other departments, becoming China's first company included in the bio-aviation fuel "Export Whitelist." This permits our Lianyungang facility to apply for export licenses for its full annual capacity of 372,400 tons of bio-aviation fuel.
This whitelist mechanism establishes stringent compliance standards, with production capacity verification as a key threshold. By setting clear technical and capacity requirements, it prevents disorderly expansion of inefficient or non-compliant producers while ensuring certified enterprises meet international standards, possess robust technical capabilities, and demonstrate stable supply capacity.
Analyst reports indicate this policy opens international export channels for China's SAF industry, marking a pivotal shift from policy support to market-oriented, standardized operations. As the first company to achieve this accreditation, we successfully completed China's first compliant export of 13,400 tons of bio-aviation fuel on May 6, 2025, setting a benchmark for domestic SAF companies in global competition.
Strategic Investments Validate Our Leadership
China's policy incentives have attracted overseas investment, including BP's strategic stake in Lianyungang Jiaao in 2024. The prospective investment by CNAF will further strengthen our advantages in raw material networks, technological leadership, and scaled production design.
This strategic move will enhance Lianyungang Jiaao's capital strength and facilitate new project development. Existing shareholders-Jiaao Enprotech, Jiaao Fund, Jiaao New Energy, BP Global Investments Ltd., and our actual controller Mr. Shen Jian-will sign relevant capital increase agreements with CNAF, waiving preemptive rights. CNAF will invest approximately RMB 261 million for a 10% equity stake post-capital increase. Jiaao Enprotech will remain the controlling shareholder, retaining actual control over Lianyungang Jiaao.
Integrated "Feedstock-Technology-Certification-Channel" Capabilities
We have built a unique closed-loop capability spanning:
Feedstock & Location: Strategically located in the Yangtze River Delta, our Lianyungang base efficiently serves regional pilot airports.
Certifications: Holding CAAC airworthiness certification and EU ISCC/DDC certifications, we qualify for premium markets like the EU (mandating 6% SAF blending by 2030).
Tech & Scale: Our 372,400-ton capacity using "waste oil conversion" technology delivers both emission reduction and cost advantages.