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China to Phase Out Corn-based Ethanol Production
July 19, 2007, 6:35 am
Filed under: current affairs

 Bad news for China Biochem, which intends to move into corn ethanol production.

China to Phase Out Corn-based Ethanol Production  

China may entirely switch to materials such as cassava, sweet potato, sorgo, and cellulose in producing ethanol fuel as a substitute for petroleum, said a government official.

China will no longer approve ethanol fuel projects made from corn and wheat, an official from the National Development and Reform Commission (NDRC) told a seminar on China’s fuel ethanol development held in Beijing on Saturday.

“Corn-based ethanol fuel will not be the direction for China,” said Xu Dingming, vice director of the Office of the National Energy Leading Group, who was also at the seminar.

China has been trying to avoid occupation of arable land, consumption of a large amount of grain, and damage to the environment in developing the renewable energies.

The current four enterprises engaged in producing corn-based ethanol would be asked to switch to other materials gradually, according to the NDRC official who declined to be named.

The four enterprises in Jilin, Heilongjiang, Henan, and Anhui have a combined production capacity of 1.02 million tons of corn-based ethanol per year.

The country has become a big producer and consumer of ethanol fuel in the world after the United States, Brazil and European Union, according to the NDRC official.

China Oil and Food Corporation (COFCO), the country’s largest oil and food importer and exporter, would focus on sorgo in the production of ethanol fuel, said Yu Xubo, president of COFCO, at the seminar.

COFCO, which owns the Heilongjiang enterprise and has a twenty-percent stake in the Anhui enterprise, aims to produce five million tons of ethanol fuel based on sorgo in the near future.

COFCO is leading the way in developing cellulose ethanol fuel under a cooperation agreement with Denmark-based Novozymes, which leads the world in research into the key enzymes needed for large-scale production of cellulose ethanol.

The current cost for producing ethanol fuel from stalks of corn, which are discarded by farmers, is still too high.

Novozymes is working on the commercialization of cellulose ethanol both in the United States and China.

“We are optimistic about China’s prospect of making it work ahead of the US, as the cost of collecting the stalks of corn are much cheaper in China,” said Steen Riisgaard, president and CEO of Novozymes.

There is much opposition both in China and in the world to corn-based ethanol fuel, which many believe will lead to higher corn prices.

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