Country scaling up green fuel evolution

China is poised to further step up the development of green fuels as the nation accelerates its broader energy transition, actively nurturing new drivers for high-quality economic growth.

The country has already made phased progress in cultivating its green fuel sector, marked by steadily expanding production capabilities. By the end of 2025, China's total green fuel production capacity reached approximately 8 million metric tons of oil equivalent (TOE) per year, according to the China Green Fuel Development Report 2026, the country's first comprehensive panoramic industry report recently released by the National Energy Administration.

Within this broader expansion, emerging sectors such as green methanol, green synthetic ammonia, and sustainable aviation fuel have recorded annual capacities of 380,000 tons, 700,000 tons, and 1.7 million tons, respectively. These figures firmly establish the country's supply capacity as a major force in the global market, the report said.

Green fuels — characterized by their low carbon emissions throughout their entire lifecycles — are gaining unprecedented momentum worldwide. With the continuous decarbonization of global shipping and aviation, international demand for these fuels is anticipated to continue surging in the upcoming years.

Industry experts believe that with expanding domestic applications driven by China's carbon-reduction objectives, the sector is currently embracing significant development opportunities and a rapidly growing market scale, with global green fuel demand expected to hit 10 million TOE by 2030 and exceed 100 million TOE by 2050.

Leveraging its abundant renewable energy and biomass resources, China is exceptionally well-positioned for large-scale commercialization, said the NEA.

Estimates show that by 2035, China aims to bring its total installed wind and solar power capacity to 3.6 billion kilowatts. If this clean electricity, alongside an estimated 617 million tons of available annual organic waste, is efficiently utilized, it could support a domestic green fuel industry scaled at tens of millions of tons of oil equivalent, it said.

Zheng Zhaohui, vice-president of the China Association for the Promotion of Industrial Development, noted that the strategic position of green fuels has been continuously elevated in recent years.

He emphasized that developing green fuels carries a fourfold strategic significance in addition to ensuring domestic energy security through enhanced self-sufficiency.

It accelerates the low-carbon transition to aid global climate governance, optimizes the modern energy system by expanding nonelectric applications, and cultivates robust new economic growth drivers, he said.

His views were echoed by Zhang Jian, vice-president of the China Electric Power Planning and Engineering Institute, saying that continuous technological innovation across the entire industrial chain has been a crucial catalyst.

"We have seen major breakthroughs in upstream synthesis, such as renewable hydrogen production, while downstream applications, including marine methanol engines, have successfully reached commercial validation," Zhang said.

Meanwhile, the NEA also noted that the industry must still overcome existing hurdles, such as high production costs, insufficient market demand, and international certification barriers.

Looking ahead, the NEA vows to consolidate the industry's foundational development to address these practical challenges.