China announces 'Agricultural Biofuel Industry Plan': new crops, higher targets
China's Ministry of Agriculture has announced its 'Agricultural Biofuel Industry Plan' which forms the basis for the development of a number of new crop bases to provide sufficient biomass resources to meet the country's growing demand for biofuels. The plan implements the shift away from food grains to non-food crops, as it was announced earlier.
The People's Republic's biofuel targets have now been raised: instead of 12 million tons of ethanol by 2020, the new goal is to produce 6 million tons by 2010 and 15 million tons by 2020. For biodiesel, a target of 5 million tons has been set (more on the previous targets). Under the new vision, bioenergy will make up almost 25% of the nation's energy consumption.
According to the Agricultural Biofuel Industry Plan, released yesterday, the new crop bases will consist of sugarcane, sweet sorghum, cassava and rapeseed for use in the production of both ethanol and biodiesel. The plan rules out the expansion of grain-based ethanol production, in particular corn and potato-based fuels, to avoid any detrimental impact on the food sector. For biodiesel, the shift to non-food crops is easier to implement.
According to the ambitious plan:
energy :: sustainability :: ethanol :: biodiesel :: biomass :: bioenergy :: biofuels :: sugar cane :: sweet sorghum :: cassava :: rapeseed :: China ::
Nine provinces - Heilongjiang, Jilin, Liaoning, Jiangsu, Shandong, Henan, Anhui, Hubei and Hebei - currently have gas stations that offer fuel mixed with 10 percent ethanol. The number of provinces is expected to grow this year as ethanol output is increased.
The country's four existing State-approved ethanol plants, which produce some 1.2 million tons per year, are located in the corn and maize production centers of Heilongjiang, Jilin, Anhui and Henan. Like the many unlicensed producers, the plants mostly use corn.
However, the rapid expansion of corn-based production has had a serious impact on corn prices and last year spurred fears of possible food shortages.
"The new investment is likely to be in plants that produce ethanol without competing with grain supplies or taking up arable land," Zhou Dadi, former director of the energy research institute of the National Development and Reform Commission, said.
Four non-grain-based ethanol plants are currently under construction in the autonomous regions of Inner Mogolia and Guangxi Zhuang and the provinces of Hebei and Shandong, which boast ample supplies of cassava and other biomaterials. It is hoped they can help strike a better balance between ethanol demand and food supply.
With the growth in the production of non-grain based ethanol, the proportion of corn used in the process will fall from the present 90 percent to 70 percent after 2009, Cao Zhi, a market analysis on ethanol production, said.
However, some experts say the country lacks sufficient support policies to ensure the development of non-grain ethanol production.
Non-grain-based biofuels are currently not allowed to enter the market and their producers do not enjoy the same government subsidies as grain-based product manufacturers, Cao said.
References:
China Daily: Crop bases to feed biofuel production - July 4, 2007.
Biopact: Researchers look at key drivers of China's bioenergy strategy - April 10, 2007
Biopact: An in-depth look at China's ambitious biofuels program - August 12, 2006
Article continues
The People's Republic's biofuel targets have now been raised: instead of 12 million tons of ethanol by 2020, the new goal is to produce 6 million tons by 2010 and 15 million tons by 2020. For biodiesel, a target of 5 million tons has been set (more on the previous targets). Under the new vision, bioenergy will make up almost 25% of the nation's energy consumption.
According to the Agricultural Biofuel Industry Plan, released yesterday, the new crop bases will consist of sugarcane, sweet sorghum, cassava and rapeseed for use in the production of both ethanol and biodiesel. The plan rules out the expansion of grain-based ethanol production, in particular corn and potato-based fuels, to avoid any detrimental impact on the food sector. For biodiesel, the shift to non-food crops is easier to implement.
According to the ambitious plan:
The total production of biomass energy from non-grain crops will grow to 500 million tons of coal equivalent, worth some 3 trillion yuan [€290/$385 billion], which will account for 24 percent of the nation's total energy consumption.Of all the non-grain ethanol resources, sweet sorghum is the favorite among agricultural experts due to its low cost, low needs for inputs and the fact it can be grown on non-arable land. Under the plan, a total of 3.8 million tons of ethanol will be produced annually from the stalks of the sweet sorghum. The plan proposes to integrate sweet-sorghum-based ethanol products into the current oil sales system, a privilege so far reserved for grain-based ethanol products:
energy :: sustainability :: ethanol :: biodiesel :: biomass :: bioenergy :: biofuels :: sugar cane :: sweet sorghum :: cassava :: rapeseed :: China ::
Nine provinces - Heilongjiang, Jilin, Liaoning, Jiangsu, Shandong, Henan, Anhui, Hubei and Hebei - currently have gas stations that offer fuel mixed with 10 percent ethanol. The number of provinces is expected to grow this year as ethanol output is increased.
The country's four existing State-approved ethanol plants, which produce some 1.2 million tons per year, are located in the corn and maize production centers of Heilongjiang, Jilin, Anhui and Henan. Like the many unlicensed producers, the plants mostly use corn.
However, the rapid expansion of corn-based production has had a serious impact on corn prices and last year spurred fears of possible food shortages.
"The new investment is likely to be in plants that produce ethanol without competing with grain supplies or taking up arable land," Zhou Dadi, former director of the energy research institute of the National Development and Reform Commission, said.
Four non-grain-based ethanol plants are currently under construction in the autonomous regions of Inner Mogolia and Guangxi Zhuang and the provinces of Hebei and Shandong, which boast ample supplies of cassava and other biomaterials. It is hoped they can help strike a better balance between ethanol demand and food supply.
With the growth in the production of non-grain based ethanol, the proportion of corn used in the process will fall from the present 90 percent to 70 percent after 2009, Cao Zhi, a market analysis on ethanol production, said.
However, some experts say the country lacks sufficient support policies to ensure the development of non-grain ethanol production.
Non-grain-based biofuels are currently not allowed to enter the market and their producers do not enjoy the same government subsidies as grain-based product manufacturers, Cao said.
References:
China Daily: Crop bases to feed biofuel production - July 4, 2007.
Biopact: Researchers look at key drivers of China's bioenergy strategy - April 10, 2007
Biopact: An in-depth look at China's ambitious biofuels program - August 12, 2006
Article continues
Wednesday, July 04, 2007
OECD-FAO Outlook: growing biofuel demand underpinning higher agriculture prices
The OECD-FAO Agricultural Outlook 2007-2016 [*.pdf] says current hikes in farm commodity prices were not caused by biofuels, but by temporary factors such as droughts in wheat-growing regions and low stocks. But when the focus turns to the longer term, structural changes are underway which could well maintain relatively high nominal prices for many agricultural products over the coming decade (graph, click to enlarge).
Reduced crop surpluses and a decline in export subsidies are also contributing to these long-term changes in markets. But more important is the growing use of cereals, sugar, oilseed and vegetable oils to produce the fossil fuel substitutes, ethanol and biodiesel. This is underpinning crop prices and, indirectly through higher animal feed costs, also the prices for livestock products.
In the United States, annual maize-based ethanol output is expected to double between 2006 and 2016. In the European Union the amount of oilseeds (mainly rapeseed) used for bio-fuels is set to grow from just over 10 million tonnes to 21 million tonnes over the same period. In Brazil, annual ethanol production is projected to reach some 44 billion litres by 2016 from around 21 billion today. Chinese ethanol output is expected to rise to an annual 3.8 billion litres, a 2 billion-litre increase from current levels.
Other findings and projections include:
bioenergy :: biofuels :: energy :: sustainability :: ethanol :: biodiesel :: agriculture :: commodities :: petroleum :: OECD :: FAO ::
The expectation that world market prices have attained a higher plateau may facilitate further policy reform away from price support. This would reduce the need for border protection and would provide flexibility for tariff reductions.
Given that in most temperate zone countries ethanol and biodiesel production are not
economically viable without government support, a different combination of production technologies, biofuel policies and crude oil prices than is assumed in the Outlook could to lead to lower prices than are projected.
The report points out that higher commodity prices are a particular concern for net food importing countries as well as the urban poor. And while higher feedstock prices caused by increased biofuel production benefits feedstock producers, it means extra costs and lower incomes for farmers who need the feedstock to provide animal feed.
Changing trade patterns
The Outlook also says trade patterns are changing. Production and consumption of agricultural products in general will grow faster in the developing countries than in the developed economies - especially for beef, pork, butter, skimmed milk powder and sugar. OECD countries are expected to lose export shares for nearly all the main farm commodities. Nevertheless, they continue to dominate exports for wheat, coarse grains and dairy products.
World agricultural trade, measured by global imports, is expected to grow for all the main commodities covered in the Outlook, but less rapidly than for non-agricultural trade as import protection is assumed to continue to limit expansion. Nevertheless, trade in beef, pork and whole milk powder is expected grow by more than 50% over the next 10 years, coarse grains trade by 13% and wheat by 17%. Trade in vegetable oils is projected to increase by nearly 70%.
The growing presence on export markets of Argentina and Brazil is staggering. While Brazil’s growth is mostly concentrated in sugar, oilseeds and meats, Argentina’s export performance also covers cereals and many dairy products. Other growing exporters in the developing and transition economies include Russia and the Ukraine for coarse grains, Vietnam and Thailand for rice, Indonesia and Thailand for vegetable oils, and Thailand, Malaysia, India and China for poultry.
Import growth is much more widely spread across countries. However, China’s dominance of oilseeds and oilseed products trade is striking. By 2016, China will have become the world’s largest importer of oilseed meals and it will have further consolidated its leading position in imports of oils and oilseeds. For the latter product, its share in global imports will have risen to almost 50%.
References:
Biopact: Growing biofuel demand underpinning higher agriculture prices, says joint OECD-FAO report - July 04, 2007.
OECD, FAO: Agricultural Outlook 2007-2016 - July 2007.
Article continues
posted by Biopact team at 3:08 PM 1 comments links to this post