(Source: "Shanghai Securities News" January 8, 2026)
In 2026, the “first order” of the major reorganization of central enterprises will be officially implemented in the energy field.
The State-owned Assets Supervision and Administration Commission of the State Council announced on the 8th that upon approval by the State Council, China Petroleum & Chemical Corporation and China Aviation Fuel Group Co., Ltd. will implement reorganization.
Sinopec Group Co., Ltd. is the world's largest oil refining company and my country's largest jet fuel producer. China Aviation Fuel Group Co., Ltd. is Asia's largest jet fuel service company. The merger of the two "Big Macs" has aroused great concern in the industry.
“The core strategic significance of the reorganization of China Petroleum & Chemical Corporation and China Aviation Fuel Group Co., Ltd. is to create a full-chain integrated aviation fuel supply system, enhance energy security, international competitiveness and green transformation capabilities, while optimizing the layout of state-owned capital.”Dong Xiucheng, Executive Dean of the China International Carbon Neutral Economic Research Institute at the w88 casino, Deputy Supervisor of the China Petroleum Distribution Association and Dean of the Carbon Neutral Research InstituteSaid to the Shanghai Stock Exchange reporter.
Building a world-class aviation energy supplier
As leading companies in the two fields of energy and chemical industry and aviation fuel supply, China Petroleum & Chemical Corporation and China Aviation Fuel Group Co., Ltd. occupy core positions in their respective industrial chains.
Sinopec Group Co., Ltd. is a large energy and chemical group company integrating upstream and downstream, production, supply and marketing, and domestic and foreign w88. It is China's largest supplier of refined oil and petrochemical products. It is the world's largest oil refining company and the second largest chemical company. The total number of gas stations ranks second in the world.
China Aviation Oil Group Co., Ltd. is Asia’s largest air transportation service provider integrating aviation oil procurement, transportation, storage, testing, sales, and refueling. Its main business mainly involves five major sectors: aviation fuel, petroleum, logistics, international and general aviation. It provides fuel supply guarantee for 258 domestic transportation airports and 454 general airports, and provides services to 585 aviation customers around the world.
Sinopec Group Co., Ltd. predicts that my country's aviation fuel demand will grow at an average annual rate of about 4% during the "15th Five-Year Plan" period, reaching about 50 million tons in 2030 and about 75 million tons in 2040.
For this reorganization, China Petroleum & Chemical Corporation stated that this is an important progress in promoting the strategic reorganization and professional integration of central enterprises. It is also a proactive move to serve the national strategy and respond to international competition. It will help improve the security and level of national aviation energy supply, promote the green and low-carbon transformation of aviation energy supply, and create a world-class aviation energy supplier. China Petroleum & Chemical Corporation will consolidate the resource base for the production and supply of aviation fuel, increase support for the high-quality development of the sustainable aviation fuel industry, and assist in the green and low-carbon transformation.
In recent years, central enterprises have accelerated their strategic reorganization and professional integration. At the meeting of heads of central enterprises held from December 22 to 23, 2025, Zhang Yuzhuo, director of the State-owned Assets Supervision and Administration Commission of the State Council, said that in 2026, state-owned central enterprises will vigorously promote strategic, professional restructuring and integration and high-quality mergers and acquisitions.
The market generally believes that through this reorganization, the two large-scale energy central enterprises will achieve deep complementarity at the strategic level, the synergy will be further highlighted, and the overall competitiveness will also be improved.
Dong Xiuchengbelieves that this restructuring will help China Aviation Fuel Group Co., Ltd. to enhance its international competitiveness and build a world-class aviation fuel supply service enterprise. Comparing with the international integrated giants, this integration can open up the upstream refining and terminal network, fill in the industry's shortcomings, and enhance the voice of the global market; China Petroleum & Chemical Corporation's resource acquisition and refining capabilities will form synergies with China Aviation Fuel Group Co., Ltd.'s global distribution and refueling network to build "production-w88-service" integrated advantages and empower enterprises to participate in international competition. At the same time, the reorganization will also optimize the layout of state-owned assets, improve the efficiency of state-owned capital allocation, and promote state-owned energy enterprises to become stronger, better, and bigger.
Promoting the development of sustainable aviation fuel
In the energy field, sustainable aviation fuel (SAF) is recognized as the mainstream route to decarbonize the aviation industry. The International Air Transport Association (IATA) estimates that in order to achieve carbon neutrality in the aviation industry in 2050, SAF will contribute 65% of carbon emissions reductions, and SAF can reduce carbon emissions by up to 80%-85%.
The "Special Management Measures for Central Budgetary Investment in Energy Saving and Carbon Reduction" issued by the National Development and Reform Commission clearly includes SAF within the scope of investment support within the central budget.
It is understood that the SAF product of China Petroleum & Chemical Corporation has completed test flights on domestic large passenger aircraft C919 and ARJ21. On June 5, 2024, the domestic large aircraft C919, which was fueled with bio-jet fuel independently developed by China Petroleum & Chemical Corporation, landed smoothly at Shandong Dongying Airport after a flight of more than an hour. This is the first time that a domestic commercial aircraft has been filled with bio-jet fuel, which will help promote the further development and application of sustainable aviation fuel.
Sinopec Group Co., Ltd. is the first company in Asia to have independent research and development and production technology for bio-jet fuel. It has independently developed special catalysts and processes, and built my country's first set of bio-jet fuel industrial equipment in Zhenhai Refinery, achieving large-scale production. This set of production equipment has an annual processing capacity of 100,000 tons. If operated at full capacity, it can basically digest the "gutter oil" recovered from a city with a population of 10 million in a year. It not only realizes the utilization of waste resources, but also reduces carbon dioxide emissions by about 80,000 tons every year. Previously, biojet fuel produced by China Petroleum & Chemical Corporation has been used in some Boeing and Airbus models.
China Aviation Fuel Group Co., Ltd. provides oil product guarantee for many aviation customers around the world, and occupies a leading position in the industry in the promotion and application of SAF and ecological construction.
SDIC Securities believes that due to factors such as a large population base and eating habits, my country has abundant food waste that can be used, so the potential scale of waste oils and fats that can be extracted is huge. The advantage of raw materials is expected to become the core element of China's lower SAF costs. China is expected to take the lead in seizing the overseas SAF market with its world-leading production capacity planning and production progress.
Industry insiders believe that after the reorganization of the two companies, they will deeply combine their advantages in technological research and development, industrialization capabilities, storage and transportation, and international w88 in SAF and other fields to promote SAF R&D, use and continuous iteration, promote high-quality development of the industrial chain, and help the aviation industry reduce emissions and carbon emissions.
Lin Boqiang, dean of the China Energy Policy Research Institute of Xiamen University, told a reporter from the Shanghai Stock Exchange that this reorganization is beneficial to the improvement of SAF technology, industrial upgrading, efficiency improvement and application cost reduction.
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