September 5, 2007

China to replace 10 million tonnes of petroleum with bioethanol by 2020 

By 2020, China intends to increase its bioethanol use to 10 million tonnes, replacing  the 10 million tonnes a year of petroleum-based fuel, Chen Deming, vice chairman of the National Development and Reform Commission, told a news conference.

By 2010, China plans to expand its use of biofuels to utilise 2 million tonnes of bioethanol from non-grain feedstocks and produce 200,000 tonnes a year of biodiesel, he added.

The country would also move away from corn for bioethanol production, amid concerns over food security and price inflation. In future, all biofuel production would use non-grain crops, Chen said.

Beijing is eager to reduce its dependence on expensive crude oil as its economy powers forward. At the same time, it is concerned that using grains for fuel would affect its ability to produce enough food for its 1.2 billion population.

Although Latin American countries have responded to the move towards biofuels by expanding planting areas, China could not do so as its land is precious, he said.

China currently has four facilities with a designed capacity to produce 1.02 million tonnes of ethanol from grains, including about 800,000 tonnes made from corn. Much of the stock being used is old grain from reserves, Chen said.

Last year, production from China's biofuel plants actually exceeded capacity, producing about 1.3 million tonnes. Rising demand for corn for ethanol and other industrial uses has strained China's corn reserves, despite bumper harvests.

To meet this challenge, China would rely instead on non-grain plants that grow on less productive land such as sweet sorghum and cassava, Chen said.

Importing corn from the US to meet grain demand would be out of the question due to high grain costs and shipping, he added.