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BP Partners China's Jiaao for Sustainable Aviation Fuel
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BP plc (BP - Free Report) ), a global oil major, has invested 354 million yuan ($49.56 million) in Zhejiang Jiaao Enprotech’s sustainable aviation fuel (“SAF”) unit, marking the first alliance of its kind in China’s emerging green aviation fuel sector, per a Reuters report. The investment grants BP a 15% stake in Lianyungang Jiaao Enproenergy Co, a subsidiary of Jiaao, focused on the development of a major SAF plant in the eastern coastal city of Lianyungang.
A Significant Partnership for Green Aviation Fuel
Jiaao Enprotech, a leading Chinese biofuel firm, is at the forefront of sustainable aviation fuel production in China. The company is constructing a 500,000-ton-per-year SAF facility in Lianyungang, which is set to be one of the largest of its kind in the region. The investment from BP represents a significant step in advancing sustainable aviation fuel capabilities in China, particularly as the country moves toward greener energy solutions.
The partnership between Jiaao and BP is notable not only for the scale of the investment but also because it marks the first collaboration between a Chinese SAF unit and a global oil major. This alliance is expected to accelerate the growth of China's green aviation sector and support global efforts to reduce carbon emissions from air travel.
China's Growing Role in the Global SAF Market
China is the world's second-largest aviation fuel market, accounting for approximately 11% of global jet fuel consumption. Despite this significant share, the country is yet to implement domestic mandates or subsidies, specifically for promoting sustainable aviation fuel. Most of China's biofuel production is currently directed toward exports.
Jiaao, however, is investing heavily in SAF production, utilizing waste cooking oil as a feedstock to create lower-carbon aviation fuel. The company's efforts align with Beijing's broader goal of promoting sustainable aviation fuel, which has the potential to reduce CO2 emissions by up to 80% compared to traditional jet fuels, according to the report.
BP's Commitment to Lower-Carbon Energy
BP’s investment in Jiaao’s SAF unit aligns with its broader strategy to diversify into lower-carbon energy solutions. The company has been actively investing in green technologies and renewable energy projects worldwide, including recent plans to develop facilities in Spain and Germany that could potentially produce sustainable jet fuel and green hydrogen.
Conclusion
BP's acquisition of a stake in a Chinese sustainable jet fuel company represents a significant step in its strategy to support the global transition to cleaner energy. With the completion of the sustainable jet fuel plant expected in 2025, BP and Zhejiang Jiaao Enprotech Stock Co. are poised to make substantial contributions to reduce the aviation industry's carbon footprint.
SM Energy is set to expand its oil-centered operations in the coming years with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for its shareholders.
The Zacks Consensus Estimate for SM’s 2024 EPS is pegged at $7.57. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.
MPLX derives stable fee-based revenues driven by long-term contracts, with minimal exposure to commodity-price fluctuations. The partnership’s robust capital expenditure forecast for 2024, along with significant expansion initiatives, underscores its commitment to sustainable growth.
The Zacks Consensus Estimate for MPLX’s 2024 EPS is pegged at $4.21. The company has a Zacks Style Score of B for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry, with a focus on the subsea segment in offshore basins worldwide. FTI’s growing backlog ensures strong revenue visibility and supports margin improvements.
The Zacks Consensus Estimate for FTI’s 2024 EPS is pegged at $1.25. The company has a Zacks Style Score of B for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
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BP Partners China's Jiaao for Sustainable Aviation Fuel
BP plc (BP - Free Report) ), a global oil major, has invested 354 million yuan ($49.56 million) in Zhejiang Jiaao Enprotech’s sustainable aviation fuel (“SAF”) unit, marking the first alliance of its kind in China’s emerging green aviation fuel sector, per a Reuters report. The investment grants BP a 15% stake in Lianyungang Jiaao Enproenergy Co, a subsidiary of Jiaao, focused on the development of a major SAF plant in the eastern coastal city of Lianyungang.
A Significant Partnership for Green Aviation Fuel
Jiaao Enprotech, a leading Chinese biofuel firm, is at the forefront of sustainable aviation fuel production in China. The company is constructing a 500,000-ton-per-year SAF facility in Lianyungang, which is set to be one of the largest of its kind in the region. The investment from BP represents a significant step in advancing sustainable aviation fuel capabilities in China, particularly as the country moves toward greener energy solutions.
The partnership between Jiaao and BP is notable not only for the scale of the investment but also because it marks the first collaboration between a Chinese SAF unit and a global oil major. This alliance is expected to accelerate the growth of China's green aviation sector and support global efforts to reduce carbon emissions from air travel.
China's Growing Role in the Global SAF Market
China is the world's second-largest aviation fuel market, accounting for approximately 11% of global jet fuel consumption. Despite this significant share, the country is yet to implement domestic mandates or subsidies, specifically for promoting sustainable aviation fuel. Most of China's biofuel production is currently directed toward exports.
Jiaao, however, is investing heavily in SAF production, utilizing waste cooking oil as a feedstock to create lower-carbon aviation fuel. The company's efforts align with Beijing's broader goal of promoting sustainable aviation fuel, which has the potential to reduce CO2 emissions by up to 80% compared to traditional jet fuels, according to the report.
BP's Commitment to Lower-Carbon Energy
BP’s investment in Jiaao’s SAF unit aligns with its broader strategy to diversify into lower-carbon energy solutions. The company has been actively investing in green technologies and renewable energy projects worldwide, including recent plans to develop facilities in Spain and Germany that could potentially produce sustainable jet fuel and green hydrogen.
Conclusion
BP's acquisition of a stake in a Chinese sustainable jet fuel company represents a significant step in its strategy to support the global transition to cleaner energy. With the completion of the sustainable jet fuel plant expected in 2025, BP and Zhejiang Jiaao Enprotech Stock Co. are poised to make substantial contributions to reduce the aviation industry's carbon footprint.
Zacks Rank & Key Picks
BP currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector may look at some better-ranked stocks like SM Energy Company (SM - Free Report) , MPLX LP (MPLX - Free Report) and TechnipFMC plc (FTI - Free Report) . While SM Energy currently sports a Zacks Rank #1 (Strong Buy), MPLX and TechnipFMC carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy is set to expand its oil-centered operations in the coming years with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for its shareholders.
The Zacks Consensus Estimate for SM’s 2024 EPS is pegged at $7.57. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.
MPLX derives stable fee-based revenues driven by long-term contracts, with minimal exposure to commodity-price fluctuations. The partnership’s robust capital expenditure forecast for 2024, along with significant expansion initiatives, underscores its commitment to sustainable growth.
The Zacks Consensus Estimate for MPLX’s 2024 EPS is pegged at $4.21. The company has a Zacks Style Score of B for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry, with a focus on the subsea segment in offshore basins worldwide. FTI’s growing backlog ensures strong revenue visibility and supports margin improvements.
The Zacks Consensus Estimate for FTI’s 2024 EPS is pegged at $1.25. The company has a Zacks Style Score of B for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.