China blocks food for biofuel

Chinese biofuel producers should only use non-food crops, the government said yesterday, following fears of shortages and further price rises that could occur as demand for greener energy increases.

The moratorium will ease manufacturing concerns about competing for ingredients being used to make ethanol and biodiesel. Corn is currently accounts for 90 per cent of the inputs in Chinese ethanol manufacture, and has sharply risen in price over the past few years due to subsidies and high crude oil prices.
Moreover, last year’s 43 per cent rise in the price of pork, China’s principal meat, due to increasing feed costs, has pushed officials to act.

“Food-based ethanol fuel will not be the direction for China,” said Xu Dingming, an official of the National Energy Leading Group, at a energy seminar held this week, according to the Xinhua News Agency.

Biofuel manufacturers will now need to source non-food crops, such as cassava and sweet sorghum used to make liquor, leaving the remainder for consumption and processing.

Last year, responding to a rise in prices due to supply shortages, China, the world’s second largest producer after the US, banned corn exports for a month.

Four sites across China produce about one million tonnes of ethanol annually from three million tonnes of corn, with another three under construction, according to a 2006 US Department of Agriculture Foreign Agricultural Service report. Two major biodiesel plants in operation produce about 50,000 tonnes in total each year.

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