As global climate governance enters a critical phase, green fuel, a key link between renewable energy and end-use consumption, is transitioning from an "option" to a "necessity." Li Zhongwu, Executive Vice President and Secretary-General of the Beijing Energy Society, noted that with the accelerating pace of decarbonization in global aviation and shipping, biomass-based green fuel, leveraging its strong adaptability to existing infrastructure, has become a realistic near-term option to address supply gaps. However, the inherent shortcomings of biomass feedstock, such as heterogeneity and volatility, hinder stable, large-scale production. He emphasized that starting from the industry's new baseline in 2026 and targeting the 2035 goal of building a climate-resilient society, China's green fuel sector benefits from converging technological, policy, and market advantages. Yet, a key pain point persists: "abundant planned capacity but insufficient stable commercial capacity," with obstacles remaining for industrial deployment.

"Looking ahead to 2035, with the implementation of mandatory standards, the formation of industrial clusters, and the full empowerment of digital and intelligent technologies, green fuel will no longer be confined to the transportation sector. It will become a flexible, low-carbon carrier connecting agriculture, chemicals, energy, and end-use consumption, supporting China's 2035 climate-resilient society while helping China become a key link in the global green fuel supply chain," said Guo Xiaobo, Managing Partner of Deloitte China's Strategic Client Services. On August 10, Deloitte China, the Beijing Energy Society, and Longji Energy Group jointly released the report "Chemical Biotechnology Empowers Green Fuel Value Proposition Under the Vision of a Climate-Resilient Society by 2035," which thoroughly explores the value proposition, core challenges, implementation bottlenecks, and development pathways of chemical biotechnology in green fuel. Li Zhongwu believes the report systematically breaks down industry development challenges from three dimensions—technology, cost, and industrial ecosystem—providing a forward-looking and practical guide for high-quality sector growth.

Guo Xiaobo argued that the period from 2026 to 2030 is a critical window for China's green fuel industry to shift from pilot projects to large-scale application. Currently, the green fuel market is entering a phase driven by both policy and demand. Rising carbon prices will continue to narrow the price gap between green and traditional fuels. The key to industrial breakthroughs lies in "technological innovation plus ecosystem synergy," using chemical biotechnology to address feedstock and cost pain points, and building a complete industrial system covering R&D, supply chains, business models, financing, and carbon assets. China has become a key pillar for global new green fuel capacity. At a time when global climate governance faces a "confidence deficit," decarbonization pressure in "hard-to-abate" sectors like aviation and shipping continues to rise. Countries worldwide are implementing policies such as mandatory blending mandates and carbon pricing to promote green fuel substitution.

The report notes that although green fuel offers significant value across transition, industrial, and environmental dimensions, moving from laboratory breakthroughs to industrial deployment requires overcoming challenges in technology, cost, and the industrial ecosystem. The report analyzes that before technologies like e-fuels reach scale, biomass fuels—including biodiesel, green methanol, or sustainable aviation fuel (SAF) derived from agricultural and forestry residues and organic waste—are among the few green fuels that can achieve large-scale application within the existing energy system. Four key factors are driving this shift. First, the supply-demand gap is widening. Global aviation and shipping emit over 1.9 billion tons of carbon annually, accounting for about 4.5% of global emissions. Demand for green fuel in these two sectors is projected to reach 34 million tons by 2030. However, global SAF production in 2026 is expected to be only about 2.4 million tons, less than 0.8% of total aviation fuel use, with the supply-demand gap continuously expanding. Second, policy incentives are intensifying. Many countries have already implemented mandatory SAF blending policies. China, in 2026, explicitly outlined plans for the green fuel industry, establishing a national low-carbon transition fund and launching the first batch of industrial pilot projects. "As the world's largest energy consumer, China, with its leading manufacturing capabilities in biomass chemical equipment and a complete industrial chain, has become a key support for global new green fuel capacity," Guo Xiaobo said.

Third, technological advancement is accelerating. With continuous iterations in chemical biotechnology, such as micronized bio-carbon-based materials solving feedstock challenges from the source, green hydrogen coupling, and large-scale synthesis of green methanol and SAF, combined with innovative trading models, diversified financing, and carbon market empowerment, the inflection point for industrial scale-up is approaching rapidly. "Technological iteration has always been the core engine driving biomass green fuel toward large-scale production," said Fu Yuqing, President of Longji Energy Group. Fourth, value chain collaboration is accelerating. Addressing the evaluation dilemma across the industry chain, the report proposes five collaborative pathways: joint R&D efforts across the entire process, a "decentralized collection, centralized pelletizing, unified supply" supply chain model, a "Book and Claim" mechanism for business models, diversified financing tools, and CCER emission reduction trading in the carbon market, to accelerate the construction of a complete industrial ecosystem.

China is now facing a systemic opportunity for its green fuel industry. As green fuel becomes a key decarbonization pathway for "hard-to-abate" sectors, countries worldwide are rapidly building out their green fuel industries. China has set a strategic goal of basically completing a climate-resilient society by 2035. Currently, potential production capacity (including planned, under construction, and completed) for green ammonia, green methanol, and SAF has exceeded 20 million tons per year, 50 million tons per year, and 8 million tons per year, respectively, ranking among the top globally. This positions China to exert structural influence on both the supply and demand sides. Guo Xiaobo stated that achieving industrial breakthroughs through chemical biotechnology is the core lever for China to fill production capacity gaps, balance energy security with dual-carbon goals, and capture global industry discourse power over the next decade. Biomass fuel will become a realistic pathway for short-to-medium-term decarbonization in aviation and shipping. The report outlines the value proposition of biomass green fuel: energy transition value, providing a realistic low-carbon fuel pathway for "hard-to-abate" transport sectors; industrial development value, transforming decentralized biomass resources into new green fuel value chains; and environmental synergy value, reintegrating carbon from agricultural and forestry waste into the energy cycle to reduce emissions.

However, biomass green fuel faces severe challenges in technology, cost, and the industrial ecosystem. In practice, while green fuel is an inevitable path for deep decarbonization in aviation and shipping, and the biomass route is the most practical current option, its production costs remain higher than traditional fuels. As facility scales expand and feedstock systems mature, costs are expected to gradually decline. Driven by falling costs, carbon pricing mechanisms, and policy demand, the economic viability of biomass fuel will become increasingly apparent, with a massive surge in green fuel demand imminent. This presents a systemic opportunity for China's green fuel industry, driven by policy support, resource endowments, a large-scale market, and a complete industrial chain. Fu Yuqing believes that producing SAF from agricultural and forestry waste is not only a differentiated technology route but also the core foundation for China's aviation decarbonization and feedstock self-sufficiency. Key factors include mandatory standards injecting certainty into the market, industrial clusters becoming a nexus for regional economic growth, innovative business models delivering carbon reduction value to end consumers, multi-coupling and co-production models activating commercial potential, and digital and intelligent technologies fully empowering the supply chain to create a traceable certification chain.

Biomass green fuel offers significant multi-dimensional value. Facing challenges in production stability and economic viability during commercialization, only continuous technological breakthroughs can transform the green vision from the laboratory into stable output from factories. Looking ahead, Fu Yuqing stated that Longji Energy will leverage China's comprehensive chemical industry system to continuously drive chemical biotechnology iteration and multi-technology coupling and co-production. The company is committed to breaking the cost and efficiency bottlenecks, helping China's green fuel sector transition from "pilot projects" to "mass production," and contributing core strength to filling the gap in domestic high-end green aviation fuel capacity.