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| Ethanol expansion on hold due to tight foodstuff supply |
| News Archive - Environmental, New & Alternative Energy - April news | |
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CHINA will not expand production of ethanol gasoline made from grains such as wheat in the near future due to a tight foodstuff supply, the country's top economic planner said yesterday. To use grain as a raw material is no longer the right way to widely develop the biological fuel industry though the sector is ripe in technology and industrialization, the National Development and Reform Commission said. Other crops such as broomcorn, tapioca and sugar cane will be substituted. The government will also favor bio-diesel as another type of bio-fuel, the commission said. The move may force some domestic companies such as Henan Province-based Tianguan Group, which uses grains to produce ethanol, to find substitutions to maintain their businesses, analysts said. China began developing the ethanol gasoline industry in the late 1990s to reduce reliance on crude oil imports and pollution. Now the nation's annual capacity of ethanol gasoline is 1.02 million tons, and it is mainly made from grain. The country also owns some bio-diesel production facilities, but capacity is still minimal. However, China's development of non-grain-produced gasoline is still in its infancy. During the next five years, the country's effort to develop bio-fuel will mainly be focused on research and raw materials exploration, the commission said. Other difficulties confronting China's bio-fuel development include price competition. The commission asked for more government subsidies in the sector. Experts said ethanol gasoline production only makes a profit when gasoline prices stay above 6 yuan (75 US cents) per liter. Prices range from 4.13 yuan a liter for No. 90 gas to 5.31 yuan a liter for No. 98 gas in Shanghai. However, there's still great potential for the development of non-grain ethanol gasoline and bio-diesel once these adverse conditions are resolved, the commission said. China will see large-scale industrialization of bio-fuel after 2015 and the government hopes bio-fuel consumption will equal 15 percent of the country's total transport fuel by 2020. That can translate into a saving of 10 million tons of crude oil, the commission added. |
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