Development of China’s biofuel industry and policy making in comparison with international practices

Abstract

Bioethanol and biodiesel are the main biofuels produced in the industrial scale. Research into bioethanol in China began around 1930, whereas biodiesel was not investigated as a biofuel until 1980. The Renewable Energy Law of the People’s Republic of China, which took effect on 1 January 2006, was perhaps the most important decree aimed at promoting the development and utilization of renewable energy. Current bioethanol production in China uses 10 % of the corn production in the north-eastern and northern provinces (Jilin, Liaoning, Heilongjiang, Hebei and Henan) as the feedstock (Fig. 1). When the aged grain was exhausted by the end of 2004, edible grain had to be used as the feedstock for bioethanol production. Nevertheless, production remains relatively low as only 0.71 % of the country’s grain (3.366 million tons of grain) was used for production of 1.32 million tons of bioethanol in 2006. However, due to the fact that 70 % of grain was used for feeding animals, concern was raised over potential conflicts between the demand for animal food and the demand for fuel. This led to a rise in crop prices in late 2006. Apart from grain, cassava, sugar cane, Jerusalem artichoke, sweet potato and lignocellulose from crop straw/ stalk and forestry residues might also be used as the feedstock. China’s first cassava bioethanol project, which has an annual capacity of 200,000 tons, was started in Beihai City of Guangxi Zhuang Autonomous Region in 2007 (Fig. 1). Experimental production capacity of 10,000 tons of cellulose-based ethanol and a feedstock conversion rate of over 18 % have been reported [1]. Because of the increasing financial support for the development of a cellulose-based ethanol industry and the reduction in related taxes or fees by the government, emphasis on cellulose-based ethanol is likely to become an inevitable trend in China’s bioethanol industry. Currently, biodiesel production plants in China are usually small-scaled, producing 100–20,000 tons and usually operating for only a few months in the year due to lack of sufficient supply of feedstock. At present, almost all biodiesel is sourced from animal fat or waste vegetable oil from oil crushing plants or restaurants [2]. However, due to high demand from animal feed or other chemical processing sectors, the price for these feedstocks is often too high for biodiesel production. In June 2011, China’s Ministry of Finance and the State Administration of Taxation jointly issued a notice that temporarily removes the 5 % consumption tax for biodiesel producers who used cooking oil that is not allowed for human consumption, non-edible lipid from the animal slaughtering houses, etc. This may help to ease the constraints on the biodiesel industry. Moreover, to supply the feedstock of biodiesel, the State Forestry Administration plans to develop 800,000 ha of oleaginous nut-bearing plants, principally in Sichuan, Yunnan, Guizhou, Chongqing, Hebei, Shanxi, Anhui, Henan, Hubei and Jiangxi, by 2015. The trees could eventually produce 6 million tons of biodiesel (China bio-fuels industry analysis, 2009). Besides the edible oilseed, other potential inputs include rapeseeds, Jatropha nuts, switch grass, sunflower seeds, Chinese pistachio, peanuts, sesame seeds, Barbados nuts, Fufang vines, Yousha bean and Chinese dogwood nuts. A considerable amount of assistance has been provided to increase the production capacity of the biofuel industry worldwide in the form of grants or loans. Some of this assistance has been provided by energy ministries and J. Zhao (&) Bureau of Academic Divisions, Chinese Academy of Sciences, Beijing 100190, China e-mail: zhaojun@cashq.ac.cn