The Status of Biofuels in China
by Susan van Dyk (IEA Bioenergy Task 39/University of British Columbia) … Recent heavy pollution in urban areas of China have led to the adoption of stricter fuel specifications to lower sulfur emissions from gasoline and diesel use.
Biofuels form part of the country’s basket of measures to reduce emissions and domestic air pollution. The country currently produces about 3 billion litres of ethanol and about 1.14 billion litres of biodiesel per year, which makes
China the world’s third largest ethanol producer country after the United States and Brazil. However, it remains unclear how China will meet the ambitious ethanol and biodiesel production targets set in its 13th Five Year Plan (announced on October 24, 2016). China aims to expand ethanol production through newly implemented processor subsidies and import restrictions (USDA, 2017). Unlike stationary power, which can be derived from multiple sources including solar, hydro and wind, transportation has limited options available for decarbonisation. Although biofuels can potentially alleviate energy security concerns and make important contributions to reducing transportation-related emissions and air pollution, the most recent policiies of China’s central government are primarily focussed on the development of “new energy vehicles” (electric and hybrid vehicles).
China’s biofuels policies have mainly focused on ethanol production, with about 99% of the ethanol produced in China based on conventional starch-based feedstocks. Current ethanol production has been developed within a highly regulated environment as no facilities can be built without government approval. Ethanol production and distribution is controlled by state-owned oil companies. Only state-approved companies can carry out blending and receive incentives and subsidies. An E10 mandate is in place in twelve provinces and 34 cities …
After the initial development of ethanol production facilities based on using stale grain reserves in 2007, the government banned further bioethanol production from grains. Instead they encouraged the production of so-called “generation 1.5” non-grain feedstocks such as cassava, sweet potato and sweet sorghum. A further two ethanol facilities were supposed to be developed based on cassava and one based on sweet sorghum. These 1.5 generation crops were supposed to be predominantly grown on marginal lands. However, this approach has had limited success, with land and water availability proving to be significant challenges, with these alternative biofuels feedstocks still competing with food production.
In April 2015, China Steel Corporation announced a US$46 million investment into Lanzatech to develop a facility with an annual production capacity of 17 million gallon (64 million litres), with construction to begin in 2015. The intention was to scale up to 34 M gallons (128 M litres) sometime in the future (Lanzatech, 2015; Lane, 2015). In July 2015, DuPont announced a licensing agreement with Jilin Province New Tianlong Industry Co., Ltd., (NTL) to begin the development of China’s largest cellulosic ethanol manufacturing plant to be located in Siping City in Jilin Province. This agreement will allow NTL to license DuPont’s cellulosic ethanol technology and use DuPont™ Accellerase® enzymes to produce renewable biofuel from from Jilin Province’s corn farm biomass residues (DuPont, 2015). Beta Renewables also reports that the M&G Group has entered into a JV with the Chinese Guozhen group to produce bioethanol from wheat straw and corn stover.
China’s FAME biodiesel industry is largely unregulated. It has developed slowly and is dominated by small-scale private businesses. No mandate for biodiesel blending exists, except for a small trial in two counties in Hainan province. There are also limited incentives to carry out biodiesel blending. The vast majority of the biodiesel that is produced is used by industry, with only about 30% used for transport (USDA, 2016). Market penetration for biodiesel has been quite limited as state-owned oil companies own 90% of the gas stations and they have not encouraged biodiesel use.
Virtually all of the biodiesel that is produced is based on used cooking oil as the feedstock. Although fairly large volumes of so-called “gutter oil” (illicit used oils) are available in China, competition from their illegal re-use in food applications has resulted in supply availability challenges.
The first, partially bio-jet fuelled flight in China took place in October 2010 as the result of a collaboration between the China National Petroleum Corporation, Air China, Boeing, Honeywell, the China National Aviation Fuel Group and Pratt & Whitney. The Sinopec Corporation, another Chinese national oil company, built a biofuel facility in Southeast China’s Hangzhou in 2011 with a production capacity of 6,000 tonnes of aviation bio-fuel per year from used cooking oil. READ MORE