Organic oil

A farmer's son will have no difficulty reading news about biofuels used in the United States - he only needs to know the word corn. But in China, the news about biofuels might be a challenge for a medical doctor to understand if his Latin is not good enough.

The terms sound obscure: Canola, Jatropha Curcas, Pistacia Chinensis, Cornus Wilsoniana and Xanthoceras Sorbifolia. Yet translated into simple business English, they actually mean one thing - diesel.

More and more Chinese farmers are now aware of what they are - woody oil plants that can all be materials for China's biodiesel of the future.

Chinese officials tell China Business Weekly that biodiesel will soon carry greater significance in easing the energy thirst of the rapidly developing nation, as technology, markets and environmental policies for alterative fuels are maturing.

This was noted by Qiu Hongwei, a senior official with National Center for Biotechnology Development under the Ministry of Science and Technology, at the 2007 International Conference for Bio-economy held last week in Tianjin.

Reinforcing Qiu's point, Xu Guanhua, former Minister of Science and Technology, said at the conference that biodiesel should be an option to relieve the country's energy shortages.

In reality, the biodiesel industry is still in a nascent stage in China, with production of only 200,000 tons in 2006. The market demand for biodiesel was 120,000 tons last year. Qiu forecasts the demand for biodiesel will soar to 1.5 million tons by 2010 and 2.7 million tons by 2015.

There is a growing tendency for biodiesel to replace traditional diesel products, despite current modest biodiesel consumption, Qiu says.

The country used 117.76 million tons of diesel last year, Qiu notes. By 2010 consumption is estimated to increase to 148.6 million tons and by 2015 is projected to be 180.8 million tons of diesel.

Truck ownership in China reached 13 million units in 2004 out of the total 41.8 million vehicles on the road. Ever-increasing numbers of vehicles require surging volumes of diesel, the most widely used fuel for trucks in China.

Benefits

Biodiesel is equivalent to diesel, with high energy density and excellent lubricating properties, yet is renewable and biodegradable and also generates low emissions when burned.

Raw materials for making biodiesel include herbage oil crops, woody oil plants, waste oil and hydrophilic oil plants.

In the US and Europe, herbage oil crops are often used to feed biodiesel production. In China, where crops are not as plentiful as in developed countries, biodiesel is made mostly from waste oil and woody oil plants.

Developing biodiesel in China can bring benefits to farmers and the agriculture sector as a whole by stimulating the development of oil forestry, improving the availability of accessory products and extending the agricultural industrial chain.

"Through these approaches, farmers' incomes can be hiked, and ultimately we can leap-fog development in undeveloped regions of the country," Qiu says.

The environmental benefits of burning biodiesel are also obvious - lower emissions of carbon dioxide and other exhaust gases, lower pollution to the water and soil and more land saved, Qiu says.

Despite of country's limited arable land, China boasts great potential for planting woody oil plants by making use of idle winter land.

Waste oil is also a material for making biodiesel. Qiu estimates that there will be three to five million tons waste oil available every year for making biodiesel.

Costs for making biodiesel come from both raw materials used and technology adopted, says Yu Longjiang, professor of Huazhong University of Science and Technology.

"About 70 percent of the cost is from raw materials, with the rest for technology used. Better materials can save technology costs, while cheaper materials demand sophisticated and more expensive technologies," Yu tells China Business Weekly.

Technology advice

For research and development (R&D), Qiu says that there are over 30 research institutions and up to 3,000 scientists and engineers working on bioenergy-related R&D in China.

With a strong R&D capacity, some technological breakthroughs have been achieved in China. A new type of enzyme, known as a lipase, has been developed that can transform waste cooking oil into biodiesel. The cost of lipase is about 150 yuan per kilogram, while the cost of biodiesel is about 3,000 yuan per ton.

To further enhance bio-diesel technology, Qiu gives some advice.

"First, we should constitute national standards for biodiesel as soon as possible. Second, the state should enhance specific R&D support for biodiesel to boost technical maturity. Third, a national-level R&D center for biodiesel should be built," Qiu says.

Policy suggestion

China is encouraging the development of renewable energy with the Renewable Energy Law that took effect last year.

The National Development and Reform Commission, China's top economic planner, has decided to set up biomass hi-tech industrialization demonstration projects, aiming to build a biomass industry to replace 10 million tons of oil and save five million tons of coal by 2010.

However, the authority should give a bigger shot in the arm to biodiesel development, Qiu suggests.

There should be more preferential tax policies, he says. The State should also expend more efforts in perfecting the investment and financing mechanism for the biodiesel industry, he adds.

"The biodiesel industry in China has great potential in long run, but it has a tardy development now because of energy policies and insufficient market growth. The biodiesel industrial development needs support from the government and the cooperation between (research) institutions and enterprises," Qiu concludes.

(China Daily 06/30/2007 page3)