China suspends E10 ethanol mandate plan

January 8, 2020 |

In China, Reuters is reporting that China has abandoned its plan to roll out a nationwide E10 ethanol mandate this year, citing a corn shortage and production constraints. Despite widespread belief throughout the 2010s that China’s ability to command its economy made the mandate a no-brainer, some of the usual constraints were evident in terms of feedstock and refining capacity — simply, not enough was planted or built. The plan will impact China’s efforts to reign in greenhouse gas emissions and clean its skies, but may have been impacted by trade tensions between the US and China, By contrast, the US market is awash in ethanol capacity and overproduction and producers were eyeing the China market as a way out of a financial downturn. Corn had been in a major surplus in Chia as late as 2017 when the mandate implementation was affirmed — now, shortages have appeared and trade imbalances may well be to blame in part. Reuters wrote that the Chinese National Development and Reform Commission told attendees at an energy meeting that the rollout would now be limited only to those provinces that had already ramped up blend volumes, and no more for now. In 2018 the US exported 20 percent of its entire production capacity to China, but import duties soared to as high as 70%, in retaliation for US moves against US-China trade.

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Category: Fuels

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