Digitalization and intelligent transformation represent a mandatory course for all manufacturing and energy enterprises, as stated by Sun Jianneng, Vice President and General Manager of Honeywell Process Solutions in China.
During a conversation with Sina Finance at the World Economic Forum's 17th Annual Meeting of the New Champions, also known as the Summer Davos Forum 2026 in Dalian, Sun Jianneng elaborated on the prerequisites for achieving innovation at scale. He emphasized that realizing large-scale innovation requires the synergistic advancement of three key elements: a solid market foundation, technological maturity, and a commitment to sustainable development.
Core Requirements for Large-Scale Innovation
Discussing the forum's theme of "scaling innovation," Sun Jianneng outlined four essential conditions that must be met simultaneously for an innovative technology to achieve widespread replication and adoption.
The primary foundation is a robust market base. A stable and substantial downstream demand is crucial as it can continuously support early-stage R&D investments, technological iterations, and commercial implementation, forming the prerequisite for scaling. The second condition is technological replicability. A successful lab prototype does not equate to an industrial-scale solution. Mature technology must withstand long-term market validation, possessing the capability for standardized replication and mass production. Third is the requirement for sustainable development. With global environmental and compliance standards continually tightening, no matter how outstanding a technology's performance or economic benefits may be, its long-term scalability is untenable if it fails to meet low-carbon and environmental standards. Finally, talent supply is critical. High-end engineers and R&D personnel serve as the essential "software" guarantee for industrial expansion.
Reflecting on China's industrial landscape, Sun Jianneng noted that China is one of the world's most suitable markets for implementing scaled innovation. The country benefits from a continuous annual supply of millions of university graduates and approximately a million master's and doctoral degree holders, sustaining the "engineer dividend." Coupled with a massive domestic market, China possesses significant inherent advantages for the deployment, iteration, and mass production of new technologies.
Addressing the Scale-Up Challenge for Sustainable Aviation Fuel
The current global price of Sustainable Aviation Fuel (SAF) is typically two to three times that of conventional jet fuel, with the green premium hindering widespread industry adoption. According to IATA estimates released in June, SAF production in 2026 is projected to account for only 0.8% of total aviation fuel consumption, leaving a vast gap to reach the association's 2050 target of a 65% SAF blend. This situation places cost pressures on both consumers and airlines.
In Sun Jianneng's view, while short-term reliance on policy mandates for blending and carbon tax adjustments are necessary measures for industry nurturing, the core long-term solution for achieving scale and price parity lies in technological iteration and capacity expansion.
Stable upstream feedstock is the first hurdle for scaling. While the used cooking oil (UCO) pathway is technologically mature, it faces issues of feedstock adulteration and unstable supply. The high market demand for UCO has led some suppliers to mix in impurities to boost volume, which can damage production equipment and catalysts and even pose risks of re-entering the food chain. Sun Jianneng stressed the need for government authorities to establish a comprehensive, source-to-end control system to ensure feedstock purity and stable supply.
Regarding when SAF might achieve price parity and subsequently reduce fuel costs for airlines and consumers, Sun Jianneng acknowledged that solely relying on SAF to lower overall fuel costs is a highly challenging goal. The immediate objective is to gradually mitigate the cost impact of SAF on the aviation industry. Leading companies in the sector are already factoring long-term competitiveness into their capacity planning and process selection stages. Projecting based on IATA's decarbonization timeline, SAF is expected to reach price parity with conventional fossil-based jet fuel around 2040. If costs remain several times higher by then, air travel will struggle to compete with lower-carbon transportation modes like high-speed rail.
He also proposed that the green transition should not impose carbon constraints solely on the aviation sector. Carbon tax and emission reduction policies need cross-industry coordination to ensure fairness between air and land transport. A dual incentive mechanism combining mandatory blending requirements and carbon subsidies could motivate transformation across the entire value chain.
Sun Jianneng introduced that Honeywell possesses multiple technological pathways for scaling SAF production. One route involves converting used cooking oil into SAF. The largest sustainable aviation fuel facility in China utilizing this modified process has successfully commenced operations, employing Honeywell's Ecofining™ technology. This facility can convert 10,000 barrels of used cooking oil into SAF daily, equivalent to an annual capacity of approximately 500,000 tonnes. Additionally, Honeywell offers a technological pathway that converts agricultural straw into methanol/ethanol, which is then transformed into SAF. This approach is suitable for regions rich in agricultural and forestry resources, such as Northeast China, providing differentiated solutions based on local resource endowments.
Key to Scaling Green Hydrogen Lies in Cross-Regional Industrial Chain Integration
Beyond SAF, low-carbon technologies like green hydrogen also face challenges in achieving scale. Sun Jianneng pointed out the core contradiction lies in the mismatch between resources and demand. Regions like Northwest and Northeast China have abundant green electricity resources but limited local demand for green hydrogen consumption. Central and Eastern China have substantial demand for low-carbon feedstocks in industry but lack access to low-cost green electricity.
Resolving this contradiction requires synergistic coupling across the entire industrial chain. Leveraging Honeywell's technology, green hydrogen produced in the northwest can be converted into green methanol. This product can be stored and transported locally or further processed into SAF, thereby establishing a cross-regional industrial chain from "green power to green hydrogen to green fuels." Simultaneously, it is crucial to address technological shortcomings in hydrogen storage and transportation carriers. Through collaboration among upstream and downstream enterprises and coordinated local industrial support, the potential for scaling the green hydrogen industry can be unlocked.
Refining and Petrochemical Industry at Structural Inflection Point
Marking the beginning of China's 15th Five-Year Plan period, domestic refined oil demand has peaked, signaling a formal structural transformation inflection point for the refining and petrochemical industry. Sun Jianneng analyzed that the underlying logic of this inflection point has fundamentally shifted. The industry's past focus on competing through production capacity scale has now turned towards process technology routes, digitalized lean operations, and product portfolio strategy.
"The trend towards electrification is firmly established, with demand for gasoline and diesel peaking. Coupled with supply volatility in crude oil due to geopolitical conflicts, blindly expanding capacity will only increase costs and compress profits," Sun Jianneng explained. The new development path for the industry involves producing less oil and more chemicals, reducing refined oil output while focusing on high-end chemicals and new materials. Enhancing corporate competitiveness through higher product value-add is now the unified direction for both the renovation of existing assets and new projects among domestic refiners, aligning closely with the petrochemical industry's transformation strategy of "reducing oil, increasing chemicals, and specializing."
AI and Industrial Interconnection Activate Endogenous Drivers for Transformation
Beyond cost reduction through green and low-carbon technologies, industrial digitalization and AI-powered intelligent operations serve as endogenous levers for enterprises to enhance long-term competitiveness. Sun Jianneng introduced that Honeywell is comprehensively advancing from traditional automation to autonomous industrial operations. Its self-developed "Connected Business" digital platform provides industry clients with 24/7 remote intelligent operation and maintenance services.
While traditional equipment faults or parameter adjustments required on-site engineer intervention, the interconnected platform integrates data from all plant equipment. AI simulation models calculate optimal production parameters in real-time, predict equipment anomalies in advance, and optimize operating conditions, significantly reducing maintenance costs and unplanned downtime. Beyond hardware and on-site technical services, this digital interconnected solution has been deployed at scale in the petrochemical and energy sectors.
AI tools are also permeating internal corporate management. After sales representatives complete customer visits, AI can automatically identify business opportunities and compile reports, substantially reducing administrative burdens and freeing up human resources to focus on technology and customer service. Sun Jianneng stated that AI-assisted office work and industrial intelligent decision-making systems have been fully implemented within the company, underscoring that digitalization and intelligence are essential courses for the transformation of all manufacturing and energy enterprises.
Comments