Bain Capital expects sustainable aviation fuel (SAF) demand to expand over the coming decades as governments introduce blending requirements, with China potentially becoming a major new regulated market, according to James Tam, a Bain Capital partner and co-chairman of EcoCeres.
The outlook comes despite a significant near-term imbalance in the SAF market. Global SAF production is expected to reach about 2.4 million tonnes in 2026, equivalent to only 0.8% of global jet fuel demand, while available production capacity is expected to exceed 9 million tonnes, according to the International Air Transport Association (IATA).
Tam said that the SAF industry is at the beginning of a multi-decade expansion as carbon-reduction requirements spread from Europe into Asian aviation markets.
“SAF is almost the only commercially available solution to decarbonise aviation,” Tam said, while arguing that hydrogen- and electric-powered aircraft are unlikely to address long-haul aviation demand in the near term.
EcoCeres prepares for potential Hong Kong IPO
The comments come as Bain Capital-backed EcoCeres prepares for a potential initial public offering in Hong Kong. The offering could raise around $1 billion, although Tam declined to comment on the IPO details.
The listing would provide a test of public-market investor appetite for a company focused heavily on SAF and other renewable fuels at a time when the sector faces both strong long-term policy expectations and weak immediate demand.
Bain Capital invested more than $700 million in EcoCeres in 2022, according to Tam. EcoCeres currently operates production facilities in Zhangjiagang, China, and Johor, Malaysia, with combined renewable-fuels capacity of about 770,000 tonnes per year. The company itself confirms the 770,000-tonne annual capacity across the two production bases.
SAF market faces a capacity utilisation problem
The long-term demand outlook contrasts with the industry’s current supply-demand imbalance.
IATA estimates that global SAF production will reach approximately 2.4 million tonnes in 2026, representing 0.8% of total jet-fuel consumption. At the same time, global SAF production capacity is expected to exceed 9 million tonnes, leaving a substantial portion of available capacity underutilised.
IATA has attributed the weak utilisation partly to the cost gap between SAF and conventional jet fuel, which can make airlines reluctant to absorb the additional cost without stronger policy support or incentives.
This creates a central challenge for SAF producers: building capacity ahead of regulatory-driven demand can leave plants operating below optimal utilisation, while waiting for mandates can delay investment needed to create future supply.
China could become a major SAF demand market
Tam said the inclusion of SAF in China’s 15th Five-Year Plan signals that domestic blending requirements could emerge in the coming years, although specific national SAF targets have not yet been announced.
China’s current five-year planning framework places greater emphasis on the development of cleaner energy and the green transition. Separately, China’s civil aviation authorities have identified green development and the transition away from fossil fuels as priorities during the 15th Five-Year Plan period.
For SAF producers, the significance of China extends beyond its potential fuel demand. The country also has a large waste and industrial feedstock base, established refining infrastructure and a major aviation market, creating potential conditions for domestic SAF production and consumption to develop together.
However, the timing and scale of any Chinese SAF mandate remain uncertain. The current policy direction should therefore not be interpreted as a confirmed national blending target.
Hong Kong sets 2030 SAF consumption target
A more immediate policy signal is emerging from Hong Kong.
Hong Kong’s first Five-Year Plan for 2026-2030 calls for SAF to account for 1% to 3% of fuel used by flights departing from Hong Kong International Airport by 2030. The plan also supports development of an SAF production base in the Guangdong-Hong Kong-Macao Greater Bay Area, with the production base expected to begin operating by 2030.
Hong Kong’s 2026 Policy Address goes further by stating that the government will study establishing a mechanism for a mandatory SAF consumption ratio and plans publicity and education measures from 2028 to support the 2030 target. It also proposes an SAF blending facility in Hong Kong to strengthen the regional supply chain.
These measures could create a clearer demand signal for producers supplying the Hong Kong aviation market.
EcoCeres plans 450,000-tonne Dongguan plant
EcoCeres is developing a third production facility in Dongguan, Guangdong, with planned annual capacity of 450,000 tonnes. It is scheduled to open by 2030 and is intended to supply airports in Hong Kong, Shenzhen and Guangzhou. Tam said the development timeline remains firm.
The broader investment programme has been reported at about HK$10 billion ($1.27 billion) over a 10-year build-out, although Tam said the refinery itself would cost materially less than the overall investment figure.
The plant’s scale is significant relative to Hong Kong’s planned SAF consumption. Tam said achieving the upper end of Hong Kong’s 1%-3% target would require nearly half of the facility’s output.
Any remaining production could potentially be directed towards other markets, including Europe, where the EU’s ReFuelEU Aviation framework requires SAF to account for 6% of aviation fuel supplied at EU airports in 2030.
Waste-based feedstocks form EcoCeres’ supply strategy
Feedstock availability and traceability are another part of EcoCeres’ positioning in the SAF market.
The company says its renewable fuels are produced from 100% waste-based feedstocks, with its technology platform designed to process different feedstock types. Its Zhangjiagang facility has operated since 2017 and has annual capacity of 350,000 tonnes.
Tam further added that EcoCeres sources used cooking oil from approximately 500,000 restaurants across China and can trace the feedstock back to individual collection sources.
Such traceability can be important for SAF producers because sustainability certification, feedstock eligibility and emissions accounting are increasingly connected to the ability to access regulated markets and premium offtake agreements.
EcoCeres has also positioned its proprietary technology as a competitive advantage. Tam said the company owns its technology stack and does not rely on third-party technology licensors or catalyst suppliers.
The company has existing commercial relationships with international airlines, including Qantas, Air France, British Airways and Cathay Pacific.
SAF investment depends on policy translating into demand
The current SAF market illustrates the gap between future demand expectations and near-term market economics.
IATA’s estimate of 2.4 million tonnes of production in 2026 compares with a long-term requirement of roughly 500 million tonnes annually by 2050 under the industry’s net-zero pathway. That means production must increase by more than 200 times from current levels, highlighting the scale of investment required across feedstocks, conversion facilities, logistics and certification.
For producers such as EcoCeres, the challenge is therefore not simply adding capacity. Plants need access to eligible waste feedstocks, technology that can operate economically, long-term buyers and policy frameworks capable of creating sufficient demand to support investment.
Hong Kong’s 2030 target provides one relatively defined demand signal, while China’s potential future mandate could provide a substantially larger market if formal blending requirements are introduced.
