China To Ramp Up Bio-Energy Industry
13 November 2006 Chinese leaders are introducing measures to boost the development of its bio-energy sector, according to a report on the Shanghai Daily web site. The country hopes to limit dependence on foreign oil and cut pollution.
China’s plans include a risk fund system to subsidize projects when oil prices are low, a subsidy on land-use rights for raw material extraction, bailouts for pilot projects, and preferential taxation policies. These new measures were announced late on Friday by the Ministry of Finance, the National Development and Reform Commission, the Ministry of Agriculture, the State Administration of Taxation, and the State Forestry Administration. Specific details of the programs are forthcoming.
Vice Minister of Finance Zhu Zhigang said besides being environment-friendly and able to ensure energy security, bio-energies can help boost income for farmers as bio-diesel and ethanol use crops as feedstock. But Zhu also warned the sector should only be developed if food security is satisfactory. The government said in April it would not expand production of ethanol made from grains like wheat in the near future due to a tight food supply.
Zhu said the government will select the companies which will receive subsidies based on factors such as their efficiency and technological know-how. Some companies are already taking advantage. China National Offshore Oil Corp. has been studying the feasibility of building bio-diesel plants on Hainan Island and in Sichuan Province. Last month, Austria’s Biolux started building a US $150 million bio-diesel plant in Nantong, Jiangsu Province.
China announced earlier that it has set the goal of one-tenth of its energy coming from renewable resources, which include hydro, solar, wind, and bio-energy by 2010, and 16% by 2020. The share is around 7% now.
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