China to introduce mandatory use of ethanol in fuel until 2020

Almaty. September 13. Silkroadnews – China plans to introduce the mandatory use of ethanol in fuel until 2020, Reuters reported.
“China plans to roll out the use of ethanol in gasoline nationally by 2020, as Beijing intensifies its push to boost industrial demand for corn and clean up choking smog,” the report said.
At the same time, it is noted that the PRC government for the first time has set clear terms for pushing the biofuel, known as E10 and containing 10% ethanol in the world’s largest automobile market. The official policy on this issue has not yet been approved, but the requirement to include a certain amount of biofuel in the fuel mix is already being introduced at the provincial level.
According to the analyst of Sublime China Information Michael Mao, without government support, ethanol is likely to be too costly to survive in the market.
As reported, as soon as the news appeared, shares of biofuel producers rose. Shandong Longlive Bio-Technology Co Ltd shares rose 10%, resulting in the biggest one-day profit since December 2015. The shares of the major biofuel producer COFCO Biochemical Anhui Co Ltd rose almost 6%.
The agency reminded, lately last year the PRC government reported it would seek to double ethanol production by 2020 due to growing volumes of ageing corn in the state warehouses.
China created state corn reserves estimated at about 200 million tonnes, which is equivalent to annual demand, following a now discontinued state stockpiling scheme aimed at supporting farmers.
With this it is reported that the government intends to build a base for ethanol production in the northeast of the country, mainly in the corn growing region.
“China’s use of renewable-based fuel lags the rest of the world, with only 3 million tonnes consumption in 2016, or less than one percent of total fuel use, the official added. The report on Wednesday said the government also aims to have large-scale domestic production of cellulosic biofuels, which are made from sources such as grasses, trees and crop waste, by 2025,” the report reads.
At present, China is the world’s third largest ethanol producer, however ethanol production in the PRC is about 2.1 million tonnes per year and considerably behind Brazil and the United States.