GCiS China Strategic Research publishes study of the China biofuels market

January 7, 2011 |

In China, GCiS China Strategic Research has published a study of the China market for biofuels, covering both ethanol and biodiesel.  The study provides an in-depth look at the trends, participants and forecasts for the industry from 2009 to 2015.  Findings include the growing, multibillion dollar market, is centered around the government mandated “ethanol-only” areas of northeast and central China, which accounts for 20 percent of China’s automotive fuel consumption.

The ethanol supply is a tightly run monopoly, conferred upon three of China’s largest State-owned enterprises: Sinopec, CNPC and the Cofco group, and that the grain used as a fuel stock in nearly two-thirds of biofuels has been banned in new projects amid concerns of domestic food price inflation.

In contrast, biodiesel suppliers are mostly privately owned, whereas all but one ethanol supplier is state-owned, with the industry’s growth is described as organic, and the typical supplier is a chemicals producer acting on an opportunity.  GCiS reports that both types of biofuels are caught between rising raw material pricing and restrictions, and the fixed (and artificially low) pricing of diesel and gasoline to which biofuels must be pegged. GCis notes that the Chinese government has made subsidies and tax breaks available to suppliers of both fuels, although anecdotally, state owned ethanol enterprises are favored.

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Category: Research

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