July 13, 2007
China unlikely to force grain-based ethanol plants to make a switch
Officials at China Agri-Industries Holding Limited (China Agri) can probably breathe easier after China's National Development and Reform Commission said there is currently no plan to demand the four fuel plants of China Agri to replace their raw materials, and it is unlikely to come in near future.
The State Council of China recently passed a Medium to Long-term Development Plan for Renewable Energy, stating that fuel ethanol production from grain is to be halted and only environmentally friendly non-grain-based production that does not take up farmland or consume grain would be encouraged.
Currently, both of China Agri's ethanol projects under construction in Guangxi and Hebei provinces are non-grain-based.
However, its two corn-based ethanol projects in operation in Heilongjiang and Jilin cannot be turned into non-grain-based ones.
The company said it has not received any official order to halt its grain-based fuel ethanol production projects so far.
China Agri has an estimated ethanol production capacity of 180,000 tonnes.
That production is expected to be ramped up to 1.08 million tonnes by 2009, with vegetables as the raw ingredient.