Page 1

CCM Data & Primary Intelligence

Biofuels Market in China

The first edition August 2009

Prepared by:

Guangzhou CCM Information Science and Technology Co., Ltd . Guangzhou, P. R. China

Copyright by Guangzhou CCM Information Science and Technology Co., Ltd (P. R. China) Any publication, distribution or copying of the content in this report is prohibited. Website: http://www.cnchemicals.com Tel: +86-20-3761 6606 Fax: +86-20-3761 6968 Email: econtact@cnchemicals.com

Website: http://www.cnchemicals.com Tel: +86-20-3761 6606

Email: econtact@cnchemicals.com Fax: +86-20-3761 6968


CCM Data & Primary Intelligence Description: The rapidly developing Chinese biofuel market has been the hotspot in the past few years since the renewable biofuel is of great importance to relieve energy shortage in the future. To figure out the current situation and prospect of biofuel in China, this report widely covers information about feedstock and their production situation, competitive analysis, future forecast, governmental policies and main producers, etc. Owning to technology bottleneck and food security concern, biofuel production has encountered barriers, especially fuel ethanol production in China. At present, the second-generation biofuel, namely cellulosic fuel ethanol, has attracted the most attention. In China, most biofuel manufacturers are domestic enterprises and major fuel ethanol producers are large-size state-owned enterprises who have receive great support from the government, while some biodiesel producers are private manufacturers. Biofuel industry in China is enjoying promising prospect and CCM provides you an insightful analysis on the following aspects. To provide an overview of biofuels industry in China; To survey current production situation of biofuels; To discuss the influence of governmental regulation on biofuels industry; To assess China’s technology level of biofuels production; To know the feedstocks of biofuels production; To find out drivers behind the development of biofuels; To understand the position of biofuels sector in China's energy industry ; To forecast the future of China's biofuels industry; To identify commercial opportunities in China’s biofuels market; To assess the key players of biofuels in China, including producers and end users. Main content: No.

Content

Page

Executive summary

1

Source and methodology

3

I

Overview of biofuel industry in China

6

I-1

Development situation of biofuel industry in China

6

I-2

Position of biofuels sector in energy industry in China

7

II

Feedstock supply

8

Executive summary

8

II-1

Introduction to food feedstock

9

II-2

Introduction to non-food feedstock

22

II-3

Introduction to oilseeds

30

II-4

Introduction to cellulosic raw materials

36

II-5

Energy crops

40

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CCM Data & Primary Intelligence II-6

Waste oil

41

III

Biofuels in China

43

Executive summary

43

III-1

First-generation biofuels

46

III-1.1

Fuel ethanol

46

III-1.2

Biodiesel

53

III-1.3

Biobutanol

58

III-1.4

Other biofuels

60

III-2

Second-generation biofuels

62

III-2.1

Production situation of second-generation biofuels

62

III-2.2

R&D situation of second-generation biofuels

63

III-2.3

Future prospect

64

III-3

Third-generation biofuels

65

III-3.1

Production situation of third-generation biofuels

65

III-3.2

R&D situation of third-generation biofuels

66

III-3.3

Future prospect

67

III-4

Fourth-generation biofuels

68

IV

Processing technologies in biofuel industry

69

Executive summary

69

IV-1

Enzymatic hydrolysis

70

IV-2

Fermentation

73

IV-3

Transesterification

75

IV-4

Pyrolysis & gasification

76

IV-5

Others processing technologies

77

IV-6

Research institutes and technology transfer

77

V

Governmental regulations on biofuel industry and their influence

80

Executive summary

80

V-1

Regulations on feedstock

82

V-2

Environmental regulations

83

V-3

Subsidies and incentives

85

V-4

Restrictions

86

V-5

Other regulations

87

VI

Competitiveness landscapes

91

VII

Future forecast to the next 5~10 years

94

VII-1

Key factors influencing biofuel industry in China

94

VII-2

Forecast on biofuel industry

96

VIII

Conclusion and opportunities

98

VIII-1

Conclusion

98

VIII-2

Opportunities

100

IX

Appendix

101

IX-1

Profiles of major fuel ethanol manufacturers

101

IX-1.1

Henan Tianguan Group Co., Ltd.

101

IX-1.7

Zhejiang Haoqi Biomass New Energy Technology Co., Ltd.

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0 108

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CCM Data & Primary Intelligence IX-2

Profiles of major biodiesel manufacturers

109

IX-2.1

Sichuan Gushan Group

109

0

IX-2.10

Hebei Dong'an Industrial Co., Ltd.

117

IX-3

Profiles of major biobutanol manufacturers

118

IX-3.1

Hebei CNCP Huaying Co., Ltd.

118

IX-3.2

Jilin Cathay Industrial Biotech Co., Ltd.

119

Executive summary: China has been faced with shortage of fossil fuel for a long time and it has been importing a large quantity of petroleum every year, for example, net importing XXX million tonnes, namely, XXX of its total consumption in 2008. This has underlined the urgency for China to develop substitutes for fossil fuel. On the other hand, its abundant resources have made it possible for this nation to develop biofuel products, the ideal alternative of fossil fuel. China has released a series of policies to promote biofuel industry development in recent years. The National Development and Reform Commission of China made a three-stage plan for the development of biofuels industry: ① Technology industrialization in the 11th five years; ② Industrial scale in the 12th five years; ③ Great development after 2015. In 2007, according to Zhu Zhigang, vice director of Ministry of Finance People’s Republic of China, bio-energy will take up XXX of China’s oil consumption by 2020; China’s biofuels capacity will reach XXX million tonnes in 2020, including XXX million tonnes of fuel ethanol and XXX million tonnes of biodiesel. China’s biofuel industry has made great achievement in recent years, though still at growth stage. Among all the biofuel products, fuel ethanol has developed best in China with strong support from the government. In 2008, among China’s total oil fuel consumption, about XXX million tonnes; biodiesel constituted XXX million tonnes, that is, XXX of all the oil fuel and fuel ethanol XXX million tonnes, equaling XXX. Both biodiesel and fuel ethanol takes up less than XXX of the total oil fuel consumption, suggesting their huge development potential. Now, most biofuel products in China are only the first generation ones. Technology adopting food feedstock to produce biofuels has become mature. In 2008, there were XXX manufacturers producing XXX tonnes of fuel ethanol and XX manufacturers producing XXX tonnes of biodiesel through first-generation technology. In 2009, there are XXX manufacturers trying to produce biofuel through second-generation technology.

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CCM Data & Primary Intelligence In recent years, more and more feedstock, mainly including food feedstock, non-food feedstock, oilseed, cellulosic raw material, energy crop and waste oil, is used to produce fuel ethanol, as biofuels are becoming increasingly hot. At present, food feedstock is the major raw material of biofuel, including corn and wheat used to produce fuel ethanol. Corn has been the most popular raw material to produce fuel ethanol. But Chinese government has enacted regulations to restrict the use of corn in fuel ethanol production, because corn supply as food and feed source in China has been very tight with China’s large population and little corn has been imported into China for concerns of potential ecological danger from overseas GM corn. Cassava as non-food feedstock will be the major raw material of biofuel. Biofuel from cassava has advantage of lower production cost. In the south of China, the large area of wasteland will be ideal for potential cassava planting, which will provide a large quantity of feedstock for biofuel industry. At present, some domestic fuel giants have invested or will invest in large-scale cassava planting and in factories in Guangxi, Yunnan, Hainan to produce fuel ethanol. Corn cob and stover, wheat/rice straw are cellulosic materials for biofuel if China’s technology of second-generation biofuel matures. Their output in China is huge. Researches on biofuels are hot in China at present. Research on technology of biofuel in China focuses on enzymatic hydrolysis, fermentation, transesterification and pyrolysisi & gasification. At present, China's biomass liquid fuel industry is lagging behind in technology, with the following disadvantages: Low utilization efficiency of raw materials, high raw material consumption; High production cost and high energy consumption; Lack of complete production technology and matched equipment for Chinese non-food plants (cornstalks, rice straw, small polycarpa etc.). However, China's biofuel technology will be solved in the future. Researches on technology for the second generation of biomass liquid fuel (main raw materials are agricultural and forestry residues) has become the hotspot in China's universities and research institutions. Character of CCM' Report: The aim of this report is to provide powerful assistance to the strategy group and the management team in making correct decision as how to penetrate the ever-increasing China market and how to catch the maximum commercial opportunities. The report is formulated independently by CCM’s professional market researchers, based on the first-hand and primary data which are analyzed by scientific methodology, confirmed with both manufacturers/end users/traders and legal authorities, and presented in a logic way. Sample pages:

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II Feedstock supply 9

Cassava alcohols

Alcohols are the largest consumption field of cassava. In 2008, cassava alcohols output was about 0.72 million tonnes which needs to consume 5.4 million tonnes cassava. Cassava is a more appropriate raw material to produce alcohols compared with other raw materials. Table II-12 Economic benefit comparison of alcohols production using different raw materials in China Item

Cassava

Sugarcane

Corn

Wheat

Potato

Sweet potato

Price of RM(USD/t)

70.02

00000

00000

00000

00000

00000

Unit consumption(tonne)

00000

2.8

00000

00000

00000

00000

Cost of RM(USD/t)

00000

00000

00000

00000

00000

00000

Process cost(USD/t)

00000

00000

00000

117.13

000003

00000

Cost of producing alcohol(USD/t)

00000

00000

00000

00000

00000

00000

Price of alcohol(USD/t)

00000

00000

00000

00000

00000

819.91

Profit(USD/t)

00000

00000

-14.06

00000

00000

00000

Source: CCM International

III-1 First-generation biofuels III-1.1 Fuel ethanol In China, fuel ethanol has the largest output among all biofuels, playing an important role. Table III-5 Basic information of main fuel ethanol manufacturers in China, 2009 No.

Name

Ownership

Raw materials

Capacity ’09

Output ’08 (tonne)

(t/a) 1

00000000000

00000

0000

2

Jilin Fuel Alcohol Company Limited

00

3

00000

0

4

000

5

000

6 7

0000 0000

0 00

0

00

000

000

000

000

Corn

000

000

00000

000

200,000

000

000

000

000

000

00000000

Private

00000

000

27,000

00000000

00

000

000

000

000

000

00000

Total Source: CCM International

-

0


Table III-6 Potential fuel ethanol manufacturers in China, 2009 No.

Name

Ownership

Raw materials

Capacity being

Launch

constructed (t/a)

time

1

00,000

00,000

00,000

00,000

00,000

2

00,000

00,000

00,000

500,000

00,000

Xinjiang Haoqi Biomass New Energy

00,000

00,000

00,000

00,000

3

Technology Co., Ltd. 4

0,000

Private

0,000

0,000

N/A

5

0,000

0,000

Cassava,

0,000

0,000

00,000

00,000

sugarcane Total

-

-

Source: CCM International

III-1.2 Biodiesel In China, biodiesel output ranked the second in biofuel products. China’s biodiesel industry is only in introduction stage at present. Table III-8 Basic information of biodiesel manufacturers in China, June 2009 No.

Name

Status

Ownership

Capacity ’09

Output ’08

Price

(t/a)

(t)

(USD/t)

Raw material

1

Sichuan Gushan Group

000

000

000

000

000

000

2

00

0

000

000

000

200,000

000

000

3

00

0

000

000

000

000

000

00

4

000

Active

000

Soybean oil,

000

000

000

0

palm oil 5

000

000

000

000

000

000

000

6

00

000

000

000

000

000

000

7

000

000

000

000

000

000

000

8

00

000

000

000

000

00

9

000

000

Private

000

000

20,000

000

10

000

000

000

000

000

000

776

11

00

000

000

000

000

000

000

12

0

000

000

000

000

000

000

13

000

000

000

000

000

0

000

Sichuan Chengdu Yiyou Bio-chemical Co.,

000

000

00 0

000

000

000

000

000

000

0

000

0

000

000

000

000

000

000 000

14

0

0

0 00

0

00

000

Ltd. 15

0

00

16

000

00

Others

-

-

-

000

000

Total

-

-

-

000

000

Source: CCM International

00

-


III-1.3 Biobutanol ž

Manufacturer

By the end of June 2009, only five manufacturers have been involved in biobutanol production, but all of them are idle due to low profit at present. Table III-11 Basic information of main biobutanol manufacturers in China, 2009 No.

Name

Ownership

1

CNCP Huaying Co., Ltd

00

2

0

000

0

0

Raw

Capacity ’09

Price

materials

(t/a)

(USD/t)

Status 00

00

0

00

Corn,

0

0

000

00

N/A

00

000

00

00

5,000

000

00

000

cassava 3

00

4

0

5

00

0

Total

Private

00

000

0

Idle

00

000

00

000

-

-

00

0

-

0

Source: CCM International

IV Processing technologies in biofuel industry The current researches on biofuel production technologies in China mainly cover the following four methods. Table IV-1 Comparison among four kinds of biofuel technologies in China Technology Enzymatic hydrolysis

Current situation 00000000000

Likely progress to 2014 To be used more widely and

make

Outcome of progress 00000000000

progress

000000 Fermentation

00000000000

00000000000

To be key fuel ethanol production technology 00000000

Transesterification

Mainly used in biodiesel

00000000000

00000000000

00000000000

000000 due to high production cost.

production00000000 Pyrolysis & gasification

00000000000

Source: CCM International

V Governmental regulations on biofuel industry and their influence There are many factors influencing biofuel industry, and government regulations are one of the most significant ones. VI Competitiveness landscape The advent of biofuels marks a far-more diverse transportation fuels market, characterized by


new products, new players and a different competitive landscape. Based on Michael Porter diamond model, CCM has made a brief analysis on competitiveness of China’s biofuel industry. Table VI-2 Comparison of the 3 state-owned ethanol producers in China, 2009 Company

subsidiary

name COFCO

00000

Raw

Capacity

Current situation

Strategy for biofuels

material

’09 (t/a)

0000000

0000000

0000000

0000000

COFCO plans to take up 60% fuel ethanol

0000000

Corn

0000000

0000000

capacity in China by 2010, 0000000

0000000

0000000

200,000

0000000

Henan Tianguan Group

0000000

0000000

55%

0000000

is

held0000000

Co., Ltd. 0000000

share

0000000 plans to build about 3 million t/a biofuel capacity by 2010, 0000000.

corn

500,000

0000000

N/A

N/A

Invest some companies

Cooperates

with COFCO 0000000

second-generation

with

0000000 biofuels

for

production.

Also plans to establish fuel ethanol production line in Central China, using sweet potato as material. Source: CCM International

Biofuels Market in China  

"The rapidly developing Chinese biofuel market has been the hotspot in the past few years since the renewable biofuel is of great importance...

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