China Sees Ethanol, Not Methanol, As Oil Option

China is expanding the use of ethanol as an alternative fuel to oil, but is unsure about methanol as the coal-based fuel is toxic and causes pollution, said a member of China’s top bioenergy policy-making panel.

A flurry of ethanol projects involving state-run giants, such as China National Petroleum Corp., has spotlighted the boom in ethanol production in China, which the government sees as part of the solution to its energy dilemma as car use soars and the country becomes more reliant on foreign oil.

“China targets to use ethanol-blended gasoline for 75% of its total gasoline demand by 2010, or around 50 million metric tons out of 70 million tons,“ said Li Shizhong, deputy director of the Institute of New Energy Technology under Tsinghua University.

However, there is a policy vaccuum on methanol use, with automakers holding back from producing engines that use the alternative fuel until a national standard is in place, leading some provinces to go alone with their own specifications for blending with gasoline.

Li told Dow Jones Newswires that the goal for ethanol output will be nearly four times as much as domestic production this year. China – the world’s third-largest producer of ethanol fuel after Brazil and the U.S. – will produce 1.3 million tons of ethanol this year, equivalent to 13 million tons of ethanol-blended gasoline.

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