Ethanol confusion in China

Despite confusion over regulations, a new partnership is coming together to produce cellulosic ethanol.

Clariant and Anhui Guozhen with Chemtex Chemical Engineering had signed a licence agreement on sunliquid® cellulosic ethanol technology with the aim of producing cellulosic ethanol from agricultural residues. The full-scale commercial plant will be located on a greenfield site in Fuyang city in the Anhui province, in the Yangtze-Huai River region in East China.

It will be built on available land, owned by the Anhui Guozhen Group, and existing infrastructure network in the surrounding area which is mainly agricultural. Set to produce a planned  50.000 tons of cellulosic ethanol, the group has an option to double this capacity in the second phase.

“For Clariant, China represents a core growth market where we want to further strengthen our position. The country is aiming to achieve a 10% bioethanol content in transportation fuels nationwide in the next few years. These regulatory commitments offer substantial growth potential for our sunliquid® technology by spurring demand for advanced biofuels.”, said Hans Bohnen, Clariant’s Chief Operating Officer. 

However, the conglomerate's aspirations for expansion may be thwarted following an earlier meeting in December. China’s National Development and Reform Commission (NDRC) had said it will now halt the rollout of ethanol-gasoline supplies beyond the current handful of provinces that have already implemented full or partial blends, according to sources. This policy reversal has come about because there is concern that the country's huge state corn reserves are depleting and food security needs to be guaranteed. 

“This is definitely a step in the wrong direction, but it was not completely unexpected,” said Geoff Cooper, president of the Renewable Fuels Association, a U.S. industry trade group.  However, he stressed that ethanol consumption would continue to grow in China in an effort to find low-cost ways to reduce air pollution in urban areas.