China faces obstacles in developing biodiesel

Biodiesel refineries in various regions in China including Shandong, Hunan and Sichuan Province are currently running well below capacity. Gushan Environmental Energy Limited, China’s largest biodiesel producer, is planning to sell a factory in Beijing and suspend production at factories in Hunan and Sichuan Province.
China registered a total of 38 biodiesel refineries in 2012 with a combined annual production capacity of more than 2 million tons. However, they produced only 880,000 tons last year, according to the China Biodiesel Organization, a branch of the China National Chemical Information Center.
The USA, Brazil, Europe, and Canada supply about 90% of global biofuel production. Experts see potential growth in China’s biofuel market as petroleum and environmental concerns grow.
China’s push towards biofuel is focused on production from non-food feedstocks such as waste oil, seed oil and jatropha, in-line with the Policy for Sustainable Development. One problem Chinese biofuel refiners have run into is that most recycled waste oil and non-grain feedstock is illegally used in the food catering industry because it can be turned for a high profit.
While China’s national policy measures for promoting the biodiesel industry are limited, local governments have significant freedom to offer subsidies to biofuel companies. Global Bioenergy Industry News says that total support for ethanol and biodiesel is expected to reach approximately CNY 8 billion (USD1.3 billion) by 2020.
Despite others’ struggles, some state-owned refineries are making a concerted effort to promote biodiesel technology and build biodiesel projects. Sinopec is building a biodiesel facility in Jiangsu Province with an annual production capacity of 100,000 tons and plans to build another facility in Qinghuangdao City, Shandong Province, according to Sinopec’s official website.
(July 31, 2013)