Budweiser Brewing Co APAC Ltd, the largest beer company in the Asia-Pacific in terms of sales revenue, may have its first carbon-neutral malt house in Yangzhou, Jiangsu province by year-end, as the brewer increases efforts to reduce carbon emissions.

Budweiser APAC, a subsidiary of Belgium-headquartered AB InBev, the world's biggest brewer by production volume, has partnered with its supplier, Supertime Baoying, in Baoying county, Yangzhou, and the malt factory is expected to achieve carbon neutrality and receive certification later this year.

After the certification, Supertime Baoying is expected to become the first carbon-neutral supplier for Budweiser APAC.

The global brewer operates two carbon-neutral breweries in China — in Wuhan, Hubei province and Jinzhou, Liaoning province.

"Sustainability is not just a part of our business, it is our business, seamlessly integrated into every aspect of our value chain," said Jan Clysner, vice-president of sustainability and procurement at Budweiser APAC.

"We need quality raw materials, quality water, a sustainable way of packaging beer, and a sustainable way of producing and transporting our beer to consumers. We are a natural product brewed locally for local consumers," Clysner said.

He added that the company has roadmaps on how to make most of its breweries carbon-neutral. In the long run, it has an ambition to turn net zero by 2040.

Next, Budweiser APAC will cooperate with its suppliers for more carbon-neutral factories, driving the green transformation of the beer industry, and contribute to the realization of China's dual carbon goals.

China is aiming for carbon peak before 2030 and carbon neutrality before 2060.

The nation has been a powerhouse of beer production and consumption, and green and sustainable development has become the main trend of the beer sector in the country.

Among a group of green manufacturing enterprises listed by the Ministry of Industry and Information Technology last year, there were 17 beer production companies, accounting for 85 percent of total alcohol makers on the list.

"Beer is a production cost-sensitive product, indicating that the market is highly competitive. Higher requirements have been put forward for cost controls in the production process, and for the consumption and utilization level of various resources and energy," said He Yong, secretary-general of the China Alcoholic Drinks Association.

Budweiser APAC said its malt supplier Supertime Baoying has contracted 100 percent renewable electricity and fully achieved biomass boiler steam supply, which have helped lower costs.

"Biomass makes our costs much more predictable. Not depending on whether fuel prices go up or down will bring much more stability and security in our cost of operations," Clysner said.

The first batch of carbon-neutral malt produced by the factory will supply Budweiser APAC's Nantong and Suqian breweries in Jiangsu, creating a closed-loop green production chain, the company said.

With an annual capacity of 130,000 metric tons, the malt house currently provides products for the China market, and has the potential for export and producing different types of malt for various kinds of beer, the brewer said.

Chinese consumers have been increasingly pursuing high-quality beer.

In 2024, the consumption volume of high-end beer in the country is expected to exceed 5.5 million kiloliters, and sales revenue is forecast to reach 280 billion yuan ($39.2 billion), accounting for 40 percent of total beer sales, according to a projection by Topsperity Securities.

Budweiser, which entered the high-end Chinese beer market early, has seen growing production capacities and profits.

Domestic breweries CR Beer and Tsingtao Beer have also been launching more high-end products to satisfy growing demand from consumers.