With the "dual carbon" goals being implemented for years and significant achievements made under the guidance of the Carbon Peaking and Carbon Neutrality Action Plan, low-carbon technology has evolved from a peripheral field to a core pillar of national strategy. Among these, CCUS (Carbon Capture, Utilization, and Storage) is regarded as a key technology for achieving carbon neutrality. The CCUS industry is currently in its early commercial stages. While traditional CCUS technologies, such as absorption and adsorption methods, are relatively mature, emerging CCUS technologies represented by synthetic biology are transforming the industry's commercialization trajectory. Synthetic biology integrates carbon capture with carbon utilization, enhancing the conversion efficiency of carbon emissions, expanding application scenarios, and accelerating the scale of commercial adoption. Leading this sector is Shougang Lanza, a frontrunner in low-carbon technology, particularly synthetic biology, and a dominant player in the CCUS industry, now preparing for its listing on the Hong Kong Stock Exchange.
Shougang Lanza has recently passed the hearing for its main board listing on the Hong Kong Stock Exchange. The company submitted its application on March 27 this year, with Yuexiu Financing acting as its sole sponsor. According to Frost & Sullivan, it is the first company in the CCUS industry to commercialize and scale the production of low-carbon products using validated synthetic biology technology. Prior to its listing, the company has garnered institutional interest, securing multiple rounds of funding from domestic and international strategic investors, including Caofeidian Fund, Mitsui & Co., Ltd., and Shanghai Guoping.
Low-Carbon Technology Achievements: Dual Drivers of "Commercial Products + Low-Carbon Solutions" Shougang Lanza has successfully developed two commercial products—ethanol and microbial protein—through its carbon capture and utilization technology. It is actively exploring new revenue models, including offering low-carbon comprehensive solutions to industrial clients by licensing its technology. Given the CCUS industry's early commercial phase, project demand exhibits some volatility. In 2025, ethanol, microbial protein, and other products accounted for 81.3%, 17.7%, and 1% of revenue shares, respectively.
The company's commercial ethanol, sold in liquid form, is primarily used as a raw material for vehicle fuel. A notable aspect of this business is its active expansion into downstream products, such as Sustainable Aviation Fuel (SAF), to tap into new growth opportunities. The company has already signed a memorandum of cooperation for technology licensing related to SAF production processes. It plans to commence construction of SAF facilities in 2026, with operations expected to start in 2027 and an annual capacity of approximately 50,000 tons.
The other commercial product, microbial protein, can be applied in various downstream products, including feed for fish, piglets, and poultry. With a crude protein content typically exceeding 80%—over 15% higher than fishmeal and nearly double that of soybean meal—it has gained customer recognition. In 2021, its microbial protein received China's first feed and feed additive new product certificate in the feed raw material category from the Ministry of Agriculture and Rural Affairs, as well as being selected as a major scientific and technological achievement in agriculture and rural areas by the Chinese Association of Agricultural Science Societies.
Low-carbon comprehensive solutions represent a new business model for Shougang Lanza and a future growth driver. On one hand, this business complements SAF initiatives, as the company plans to use ethanol produced under its licensed technology as a raw material for SAF production, supporting the expansion of its SAF business and synergistically driving scale growth. On the other hand, it has signed memoranda of understanding with three potential new clients, one of which has completed internal investment approval procedures. Additionally, it is negotiating specific cooperation terms with a listed A-share company for a new project in Inner Mongolia, with strategic cooperation and patent licensing agreements expected to be signed by the end of June 2026.
In essence, Shougang Lanza's commercial products are outcomes of its low-carbon technology outputs. The company holds a first-mover advantage in the CCUS industry, and during this early stage, research and development serve as accelerators for its growth. As it enters a period of commercial expansion, the company leverages its highly competitive low-carbon technology to develop a broader product portfolio, swiftly converting these into financial performance, capturing greater market share, and driving business growth.
High-Intensity R&D: Two Core Technologies Unlocking Growth Potential From 2023 to 2025, Shougang Lanza's R&D expense ratios were 6.1%, 7.5%, and 8.1%, respectively. As of the latest practicable date, it holds 264 authorized patents and has applied for 128 patents. The company has established an integrated R&D system encompassing product innovation, technology development, and commercialization. This system covers the entire R&D chain from strain construction and basic research to pilot testing and industrial application. Its R&D model combines independent development with external collaboration, focusing on mid-to-long-term development for production using biomass gasification technology and carbon dioxide utilization.
The company's core technologies include first-generation carbon reduction technology and second-generation carbon-negative technology. The first-generation technology converts carbon monoxide from industrial exhaust gases into ethanol and microbial protein, applicable in treating industrial exhaust from sources such as steel, ferroalloy, calcium carbide, silicon carbide, and phosphorus chemical industries. The second-generation carbon-negative technology uses carbon dioxide, carbon monoxide, and hydrogen as raw materials for ethanol and microbial protein conversion. For every ton of ethanol produced, this second-generation technology directly consumes 0.5 tons of carbon dioxide, increasing the carbon fixation rate to 93.5%.
Shougang Lanza's core technologies have received certification from several renowned domestic and international institutions, such as RSB, and were selected by the International Energy Agency as a successful case study in advanced biofuels titled "Successful Case Studies of Advanced Transport Biofuels." To date, the company has commercialized its first-generation carbon reduction technology utilizing carbon monoxide and continues to advance its second-generation carbon-negative technology capable of utilizing carbon dioxide. The second phase of the Hebei Shoulang project will adopt this second-generation technology, with plans to gradually promote it to future new projects. Driven by these two core technologies, the company is poised to unlock significant growth potential.
Future Growth Outlook: Technology Industrialization and Replication to Sustain Performance Release From an industry perspective, although CCUS is in its early stages, it is considered a key technology for achieving carbon neutrality. In the Chinese market, CCUS projects are developing rapidly. In recent years, the number of new projects has continued to grow. According to Frost & Sullivan, 20 new projects were added in 2025, with an expected increase to 56 by 2030, representing a compound annual growth rate (CAGR) of 22.7%. Products derived from CCUS technology, including ethanol, ethanol-derived SAF, and microbial protein, are all expected to maintain high growth trajectories.
According to Frost & Sullivan, from 2021 to 2025, the market size for industrial exhaust-to-ethanol using synthetic biology technology grew at a CAGR of 45.3%, with an expected CAGR of 22% through 2030. SAF, an alternative fuel aimed at replacing traditional aviation fuel, saw a global CAGR of 124.1% during the period, with an expected CAGR of 41.6% through 2030. Microbial protein also maintained double-digit growth rates, with CAGRs of 19.4% and 44.9% for the respective periods mentioned.
Shougang Lanza possesses three distinct competitive advantages in the CCUS field: first-mover advantage, scale advantage, and R&D technological advantage. Since its establishment in 2011, the company has been deeply engaged in the CCUS industry. According to Frost & Sullivan, it is the first company in the CCUS industry to commercialize and scale low-carbon product production using validated synthetic biology technology. Based on 2025 revenue, it is the largest company in the global CCUS industry utilizing synthetic biology technology, holding a market share of 58.4%. The company has also achieved several global firsts, including the first large-scale industrial production facility for biological fermentation of steel industrial exhaust gases and the world's first biological fermentation production facility for ferroalloy industrial exhaust gases.
Furthermore, Shougang Lanza can replicate the industrial application of its proprietary technology, rapidly deploying it in new production capacities and achieving commercial scale. Currently, the company has successfully put into operation four large-scale production facilities: Hebei Shoulang Phase I, Shoulang Jiyuan, Ningxia Binze, and Guizhou Jinze, with a combined annual capacity of 210,000 tons of ethanol and 23,200 tons of microbial protein. Installation work for the Hebei Shoulang Phase II production facility has been completed, with trial production expected to commence in June 2026.
The Hebei Shoulang Phase II project utilizes the company's second-generation carbon-negative technology, advancing its commercialization. The company also plans to offer this second-generation technology to other industrial clients, expanding its application scope. The company estimates that the Phase II project will contribute approximately 2,100 tons of ethanol and 105 tons of microbial protein in 2026. The average capacity utilization rate in 2026 is projected to be around 28%, increasing to about 50% in 2027, thereby continuously contributing to performance growth.
In summary, the "dual carbon" goals outline an investment blueprint for the next 30 years. Low-carbon technology has become a hot theme in ESG investing, with the CCUS field emerging as a preferred high-growth sector. As a leading player in the CCUS domain, Shougang Lanza holds significant competitive advantages within the industry. Its "commercial products + low-carbon technology solution output" strategy is expected to drive future performance growth. Based on this outlook, the company has received recognition from diverse capital sources prior to its IPO, and its upcoming Hong Kong listing is anticipated to garner market favor.
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