China has approved the restructuring of China Petrochemical Corporation (Sinopec) and China National Aviation Fuel Group (CNAF), the State-owned Assets Supervision and Administration Commission of the State Council said on Thursday.

Following the restructuring, the two companies will be able to leverage a range of corporate strengths -- including integrated refining and chemical operations and a more robust aviation fuel supply assurance system -- to reduce intermediate links, lower supply costs, provide strong support for China's aviation sector's energy security, and promote high-quality development of the industrial chain.

The two will also deepen cooperation in sectors such as sustainable aviation fuel -- from research and production to storage, refueling and trade, promote the research and a wider use of sustainable aviation fuel, help airlines cut carbon emissions, and strengthen the industrial chain of the aviation fuel industry.

China's aviation fuel demand is expected to grow by about four percent annually during the 15th Five-Year Plan period (2026-2030), with consumption projected to reach around 75 million tons by 2040.

The CNAF is Asia's leading aviation transport service provider, providing aviation fuel procurement, transportation, storage, quality test, sales, and refueling service. Its core business spans from aviation fuel, petroleum, logistics, international trade, to general aviation. Sinopec is the world's largest refiner and China's biggest aviation fuel producer.