China to Promote Gasohol Nationwide by 2020

China will promote the use of the ethanol gasoline across the country, achieving full coverage by 2020, according to a document released by authoritative departments on Sep 13. This document was jointly issued by National Development and Reform Commission (NDRC), National Energy Administration, the Ministry of Finance and other 12 ministries and commissions.

The fuel ethanol plays an important role in environmental protection field. By China’s standard, the ethanol gasoline is mixed with 10% fuel ethanol. Using ethanol gasoline are able to effectively cut the carbon emission of automobile exhaust, emission of fine particles and other harmful substances, so as to improve the air quality and climate condition.

China is a big oil consumption country. With the popularization of the ethanol gasoline, the oil supply pressure will ease to some extent. Some oil can be substitute for the ethanol gasoline, which is beneficial to safeguard national energy security.

Currently, the corn, as principal raw materials of the fuel ethanol, is in a state of surplus. Northeast China (including Liaoning, Jilin and Heilongjiang) and Inner Mongolia are main productive areas of the corn. It was said that the 2016/2017 end stock of corn reached 287 mnt, facing serious overstock.

In view of this, the production and promotion of the ethanol gasoline will effectively relieve the corn inventory pressure and enhance country’s ability to regulate and control the grain market.

China’s biofuel ethanol industries have developed since 2001. Up to now, there are 12 pilot provinces using the ethanol gasoline, and the consumption volume is 20% of the total gasoline consumption volume. (In 2016, the total consumption volume of the gasoline was 120 million mt, among which the ethanol gasoline accounted for the total of 22.91%, reached 27,500 kt.) The ethanol gasoline price is same as that of regular gasoline.

Straws and forestry waste materials can be used to produce the cellulosic biofuels, excluding the excessive aged corn. According to calculations by authority, the annual volume of straws and forestry waste materials exceeds 400 million mt, among which 30% can be used to produce 20 million mt biofuel ethanol. Insiders widely believed that the promotion and use of the fuel ethanol will not boost the grain price.

Under the current circumstances, it is of great significance for China to expand the production of biofuel ethanol and advocates the use of ethanol gasoline in cars. Such activities will contribute to the optimization of energy structure, improvement of ecological environment and safeguard of food security. Besides, the promotion of ethanol gasoline will facilitate the development of agriculture of rural areas, and vitalize the old northeastern industrial base.

The industry ministry is developing a timetable to end production and sale of traditional fuel cars and will promote development of electric technology, Xin Guobin, a deputy industry minister, said in an international forum early in September. SCI holds that the sales volume of new energy vehicles in China is expected to reach 770,000 in 2017. But China’s car parc reached 194,000,000 as of the end of 2016. Accordingly, it will be difficult to end the production and sales of petrol and diesel vehicles in the short run. But the proposal of the timetable can be regarded as guide of China’s vehicle industry.