(Xinhua)
Updated: 2008-01-16 23:46

Chinese officials said the country would increase biodiesel output to 200,000 tons by 2010 and 2 million tons by 2020.

China banned the further use of grain for ethanol production last year to ensure that grain was available for food.

Raising biofuel forests in mountain areas will save farmland, make full use of the uninhabited mountains, and increase local people's family income if they are employed to take care of the trees.

Almost 70 percent of China's energy use came from coal in 2006, with other forms of energy each accounting for a tiny proportion, official statistics show.

Ma Kai, the minister of the National Development and Reform Commission (NDRC), announced last month that China would lift the proportion of renewable energy consumption to about 10 percent by 2010, and to 20 percent by 2020.

The country would focus on development of hydropower, biomass energy, wind power and solar power in future, according to a medium- and long-term plan for renewable energy published by the commission in September.

The Ministry of Finance (MOF) has worked out a complete set of financial policies to promote the production of non-food sources for biofuels, which are clean and have a limited negative impact on the environment.

Flexible subsidies will be offered to biofuel producers who lose money on crops when crude oil prices are low. The government would encourage enterprises to reserve funds to offset such risks, according to Zeng Xiao'an, deputy director of the MOF's Department of Economic Development.

The ministry would also subsidize demonstration projects producing ethanol from cellulose, sweet sorghum and cassava or making biodiesel from forest products. Projects that are up to industrial standards would receive rewards of up to 40 percent of the total investment.

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