(Repost) Why is SAF considered a massive investment opportunity?

Key points: 1. To align with the net-zero emissions target stipulated in the Paris Agreement, the aviation industry must reduce its carbon footprint to approximately 885 million tonnes by 2030 (a 13% reduction from 2019 levels) and to roughly 200 million tonnes by 2050 (an 80% reduction from 2019 levels)—a formidable challenge. 2. The most effective way to cut aviation-related carbon emissions is through the adoption of Sustainable Aviation Fuel (SAF), which can reduce CO₂ emissions by up to 80%. The European Union is the first economy to mandate SAF blending ratios. According to the International Energy Agency (IEA), global SAF consumption is projected to surge from 530,000 tonnes in 2023 to 11 million tonnes—a 22-fold increase over five years. 3. Currently, major SAF producers are concentrated in Europe; only two or three companies in China manufacture SAF. However, with the removal of export tax exemptions on UCO (used cooking oil), Europe faces raw material shortages and rising SAF prices. Meanwhile, domestic SAF demand in China remains nascent, leading to falling UCO prices and significantly higher profit margins for Chinese SAF producers. 4. China holds a pronounced cost advantage in raw materials compared to overseas markets, positioning it to foster globally competitive enterprises. The SAF sector is likely to follow the familiar pattern where Chinese firms rise while Western counterparts struggle—offering enormous growth potential for related companies. I. Aviation Emission Reduction and SAF Adoption Over 98% of aviation-related carbon emissions stem from jet fuel combustion. Developing and deploying sustainable aviation fuel is therefore central to the aviation industry’s energy transition. SAF is produced from feedstocks such as waste cooking oil, animal fats, and agricultural residues like straw. Compared to petroleum-based fuels, SAF produced using Honeywell technology can reduce lifecycle greenhouse gas emissions by 60%–88%, enabling airlines to achieve low-carbon flight. This makes SAF one of the most promising measures for the aviation industry to meet its net-zero goals. To align with the Paris Agreement’s net-zero target, the aviation industry must reduce its carbon footprint to ~885 million tonnes by 2030 (13% below 2019 levels) and to ~200 million tonnes by 2050 (80% below 2019 levels)—a daunting task. SAF blending requires no engine modifications. Once certified under relevant standards (e.g., ASTM D7566), SAF is deemed fully compatible with conventional fossil jet fuel and can be blended directly without requiring significant modifications to existing engines or infrastructure. Currently, the typical SAF blending ratio is…

Geely’s Financial Acumen | Geely-Volvo ‘Split’

Regarding the funding source for the acquisition, domestic media coverage has been scarce; Reuters reported that the transaction involved €3.07 billion (US$3.57 billion) in syndicated bank loans, with 14 banks participating in the senior syndication. BNP Paribas and China CITIC Bank International served as lead arrangers, bookrunners, underwriters, and global coordinators; BNP Paribas also acted as loan agent. In short, the deal relied heavily on leverage—borrowed funds. Moreover, when discussing Volvo Group, it is important to note that it also owns U.S.-based Mack Trucks, France-based Renault Trucks, and holds a 45% stake in Dongfeng Commercial Vehicle Co., Ltd. Geely’s investment in AB Volvo thus grants it participation across all of Volvo’s global commercial vehicle markets. On brand strategy, Geely Holding Group Director, Executive Vice President, and CFO Li Donghui clearly articulated Geely’s ambition: 'If we draw comparisons, Geely is akin to Volkswagen Group, Volvo to Audi, Lotus to Porsche, and Proton to Škoda.' This indicates Geely’s aspiration to emulate the Volkswagen Group model—an ambitious vision indeed. To accelerate this pursuit, during its second phase of capital operations (2017–2018), Geely executed frequent overseas acquisitions—not only investing in AB Volvo and Daimler AG but also acquiring stakes in Proton and Lotus, and fully acquiring U.S.-based flying car startup Terrafugia Inc. Simultaneously, Geely launched multiple projects both domestically and internationally—for instance, while negotiating with Proton, Geely was concurrently advancing nearly ten international business initiatives. Rapid business expansion and frequent cross-border M&A have continuously driven up Geely’s asset and liability scales. At end-2014, its total assets stood at ¥130.13 billion, with total liabilities at ¥97.47 billion. By Q3 2019, total assets had grown to ¥377.426 billion, while total liabilities nearly tripled to ¥262.06 billion. Li Donghui noted that in 2017, Geely Holding held ¥54 billion in cash and ¥24 billion in bank acceptance bills—equivalent to approximately ¥78 billion in cash and cash equivalents. According to Geely’s latest financial reports, however, its net cash reserve stood at ¥11.8 billion in 2019, with net receivables at ¥15 billion—both substantially reduced amid this two-year spree of acquisitions. Meanwhile, Geely Automobile Holdings’ net profits were ¥11.7 billion and ¥18.8 billion in 2016 and 2017, respectively, but declined to ¥8.26 billion in 2019, representing a year-on-year…

Gevo pulls DOE loan bid to focus on private funds for SAF plant

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Gevo Inc. withdrew its $1.46 billion DOE loan application for an ethanol-to-jet plant in North Dakota, opting for private financing due to enhanced oil recovery viability concerns. The company targets a final investment decision by mid-year.

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