China cuts back on ethanol expansion

CHINA: As Beijing balks at using grain crops for its local ethanol production, one of China’s largest biofuel producers, China Agri-Industries Holdings Ltd. has decided to put on hold plans to build three of its five proposed ethanol plants in the country.

Earlier this year, Beijing indicated plans to halt grain-based ethanol production, which is perceived to be contributing to hikes in food prices. In response to the central government position, China Agri-Industries, the Hong Kong-listed unit of China National Cereals, Oils and Foodstuffs Corp., said it will be shelving two projects that will draw ethanol from grain crops.


China Agri-Industries has dropped plans to invest US$44 million to build a grain-fed ethanol plant in the northeastern Liaoning province. The Chinese crop processor and biofuel producer also has called off a US$48 million bioethanol project using grains and other materials in the Hebei province.

In addition to the two grain-based projects, China Agri-Industries also is calling off a US$18 million non-grain ethanol project in the Hubei province.

“There is considerable uncertainty about the likelihood of obtaining approval for such projects, and even if approval is obtained, the time needed to obtain it (can be long),” Managing Director Yu Xubo said in a statement.

Energy Current