Sinopec Corp. and China Aviation officially announced a restructuring
The restructuring between Sinopec Corp. and China Aviation is a deep integration of the industrial chain. The core lies in building an integrated system of "refining - airport," reducing costs and ensuring energy security by minimizing intermediate links, directly competing with international giants like Shell, and enhancing the competitiveness of traditional aviation fuel. At the same time, both parties will work together to tackle the decarbonization challenge in the aviation industry, integrating Sinopec's sustainable aviation fuel (SAF) research and production with China Aviation's terminal refueling network, creating a closed loop for the entire SAF industry and seizing the strategic high ground in green aviation
On January 8th, with the approval of the State Council, China Petroleum & Chemical Corporation (Sinopec) and China Aviation Oil Group implemented a restructuring. According to industry analysts, this "strong alliance" is beneficial for enhancing the international competitiveness of China's aviation fuel industry, systematically improving the resilience of jet fuel supply, industry efficiency, and low-carbon transition capabilities.
Previously, China Aviation Oil Singapore, the overseas listed platform under China Aviation Oil Group, announced on October 30, 2025, that its controlling shareholder was advancing restructuring plans with another enterprise group.
After the restructuring, the new entity will fully leverage the synergistic advantages of "refining and chemical integration" and "full coverage of terminal networks," reducing intermediate links and optimizing the logistics system to lower overall supply costs, thereby providing a more solid guarantee for the energy security of China's aviation industry.
From a strategic layout perspective, this integration focuses on two key areas: enhancing the international competitiveness of the traditional aviation fuel industry and leading the systematic development of sustainable aviation fuel (SAF) industry.
Supply Cost Reduction through Industry Chain Integration
This restructuring will effectively integrate Sinopec's large-scale refining capabilities with China Aviation Oil's aviation fuel reserves and terminal refueling network advantages, by constructing an integrated "resource-refining-logistics-airport" industry chain, reducing intermediate links, and systematically ensuring the energy security of China's aviation industry.
Currently, the international aviation fuel market is mainly dominated by integrated giants like Shell, which have formed significant competitive advantages through their scale, infrastructure, and global networks that span the entire industry chain. In contrast, China's aviation fuel industry has previously been relatively fragmented in production, sales, and airport refueling, with overall competitiveness needing improvement.
Through this restructuring, the new entity will integrate Sinopec's core capabilities in crude oil resource acquisition, global trade, and refining production with China Aviation Oil's distribution and refueling network covering domestic and international hub airports, achieving complementary advantages. This aims not only to reduce costs and increase efficiency through internal synergy and ensure supply chain autonomy but also to create a complete market entity that can directly compete with international giants in terms of scale, network, and comprehensive service capabilities, thereby comprehensively enhancing the international competitiveness and market voice of China's aviation fuel industry.
Promoting Sustainable Aviation Fuel Development
This restructuring will strongly promote the development of the sustainable aviation fuel (SAF) industry. The aviation industry is the most challenging sector in transportation to decarbonize, and SAF is internationally recognized as the core technological pathway to achieve deep emissions reductions.
In this strategic field, Sinopec has made key breakthroughs as a pioneer in domestic SAF technology research and large-scale production, completing application verification on domestic aircraft models. China Aviation Oil, on the other hand, controls the core links downstream of the SAF industry chain, occupying an indispensable position in airport fuel system adaptation, mixed refueling standard formulation, and the construction of a commercialization promotion ecosystem.
**After the restructuring, both parties will deeply integrate their advantages across the entire chain in the SAF field, including technological research and development, industrialization capabilities, global resource trade, storage and transportation, and terminal refueling, to build a complete industrial closed loop from "laboratory to wing." ** This integration will systematically accelerate the technological iteration, cost optimization, and large-scale market application of SAF, aiming not only to promote the high-quality development of the domestic green aviation fuel industry chain but also to lay a solid industrial foundation for China to gain technological leadership and market discourse power in the global aviation industry's low-carbon transformation process
