China set to triple its ethanol production capacity: government researcher

Source: By Hallie Gu and Dominique Patton, Reuters • Posted: Tuesday, December 11, 2018

GUANGZHOU, China (Reuters) – China is set to more than triple its ethanol production capacity by 2020, a government researcher said on Tuesday, with demand for the commodity expected to surge as the country shifts toward cleaner fuels.

The nation is currently building or seeking approval for new ethanol plants with capacity to produce 6.6 million tonnes of the biofuel a year, Dou Kejun, a researcher at the China National Renewable Energy Centre, told an industry event in the country’s south.

China had an ethanol production capacity of 2.8 million tonnes in 2017, he said.

The country last year said it would require gasoline supplies nationwide to be blended with ethanol by 2020, a move that would require about 15 million tonnes of the biofuel annually.

That target is being widely watched by global biofuel markets as China is unlikely to meet its ethanol needs through domestic production.

Growth in Chinese production would take the country “quite close” to the volumes needed by 2020, Dou told Reuters on the sidelines of the event. Although he added that the process was “dynamic” and subject to change.

Other attendees at the event said China would need to import significant volumes from overseas suppliers such as the United States and Brazil.

“It will be a great opportunity for American and Brazilian ethanol,” said Feng Wensheng, a manager at major producer Henan Tianguan Group Co Ltd.

He added that the industry should lobby the government to reduce tariffs on corn imports and expand the corn import quota, with most ethanol in the future expected to be produced from the grain.

Feng estimated current capacity at around 3.38 million tonnes, including recently approved plants still under construction.

Of those, corn-based ethanol capacity is around 1.45 million tonnes, while facilities relying on cassava make up 1.7 million tonnes.

China also uses wheat, sorghum and rice to make the biofuel in some parts of the country.

There is also around 7 million tonnes of idle capacity at alcohol facilities, part of which could be turned into fuel ethanol production capacity, Feng said.

Reporting by Hallie Gu and Dominique Patton; Editing by Joseph Radford