Hainan Yedo to build 30 Mgy cassava ethanol plant in China; feedstock from Laos

In China, Hainan Yedao announced that they would construct a 30 Mgy cassava-based ethanol plant in Hainan province. The $51 million project is awaiting government approval, and would utilize 4,498 hectares in Laos to provide feedstock for the plant.

This is the second project announced for the southern island province Hainan in as many weeks. Three jatropha biodiesel plants with 170,000 tonnes in total capacity were approved for construction by the national government. PetroChina will construct a 60,000 tonne facility in Sichuan, Sinopec will build a 50,000 tonne capacity plant in Guizhou, and CNOOC will erect a 60,000 tonne plant on the island province of Hainan.

China background

Last week, a deputy department director of the Ministry of Finance Zeng Xiao’an denied that China was responsible for the recent run up in global grain prices.

China Daily published a useful survey of Chinese ethanol production as background material to Zeng’s comments, including a note that China is now only 95 percent self-sufficient in grains. A Biofuels Digest report earlier this year projected that China was rapidly losing food self-sufficiency.

Also last week, China’s leading biodiesel producer, Gushan, cancelled a public offering of American Depository Shares through US markets, citing “the current trading price of its ADSs” and current market volatility.

Kunming Wuhua Zhisheng Economic and Development Research Institute distributed the first hydrous ethanol 93-octane gasoline.

China Biodiesel has just completed a capacity expansion to 100,000 tonne at its biodiesel plant in Xiamen, Fujian Province. Capacity was expanded more than threefold.

In technology, Chinese researchers say that they have developed a process to increase the conversion rate of rice straw into biogas by 65 percent. More than 230 million tonnes of rice straw are left over from harvests each year, but to date rice straw has proved resistant in the conversion process. The researchers pretreated rice straw with sodium hydroxide to increase the results from anaerobic digesters. The scientific team said that three pilot facilities have been built using the technology.

In investment, Eastern Renewables Fuels said it plans to expand cassava planting to 4500 hectares in 2008 to meet rising demand. The company ships its output to Guanxi province in China.

Also, China Agro-Technology announced that it has secured $300 million in financing for biodiesel acquisitions and operations. The company is focused on building capacity to process jatropha oil to supply the growing demand lower-cost biodiesel. China’s largest state oil company, Sinopec, said it will invest $5 billion in jatropha and palm plantations in Indonesia.

In policy, grain prices have been stabilized in the country, via an increase of 30 percent in farm payments and an additional $3.5 billion in seed, fuel and fertilizer aid to farmers. As a result, grain prices have increased by only 1.2 percent.

Meanwhile, experts are warning that plans to produce biofuels in the China’s southwest will threaten biodiversity in the last remaining section of virgin forest in the country.

All Chinese ethanol projects, grain exports to be halted as corn, wheat shortages hit hard

China Agri-Industries to invest $183 million to expand Guangxi biodiesel plant to 300,000 tonne

China’s Guangxi Zhuang province to switch to cassava ethanol blend in bid to halt oil price shocks, improve emissions capacity