China’s Ethanol Gasoline Promotion Progress

China’s Ethanol Gasoline Promotion Progress

China’s ethanol gasoline promotion areas have been expanded from 5 cities to 13 provinces Since 2002. According to the Implementation Plan to Expand Fuel Ethanol Production and Promote Vehicle Ethanol Gasoline, China will promote ethanol gasoline nationwide and achieve full coverage basically by 2020.

At present, filling stations subject to state-owned enterprises such as Sinopec and PetroChina provide the ethanol gasoline in the promotion areas. Some private filling stations still sell ordinary high-clean gasoline. However, the nationwide promotion of ethanol gasoline is guided by the country, thus many refined oil producers including Shandong independent refineries will produce ethanol gasoline later. The private filling stations will have fewer choices on oil products, which will be conducive to the supervision of ethanol gasoline in the future.

As of the end of 2018, China’s fuel ethanol capacity reached 4.2 million mt/a. SCI predicts that China’s fuel ethanol output will reach 2,342kt in 2018, up 140kt or 6.36% Y-O-Y.

Currently, China and the U.S. have launched a new round of negotiation, and the import volume from the U.S. will be uncertain. If the tariff returns to 30%, the import volume in 2019 will be higher than that in 2018. SCI predicts that the total demand volume of fuel ethanol will likely reach 6.7 million mt in 2019, based on expectations for the rapid promotion of ethanol gasoline in 2019 and 2020.

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