China is the world’s 3rd largest ethanol manufacturer, after the US and Brazil.  News today out of Beijing indicated that China - a here-to-fore corn exporter, is running out of corn because of ethanol.  See the news wire below:

The National Development and Reform Commission (NDRC) has issued an urgent mandate, requiring an instant cessation in the granting of approval of corn-based processed ethanol projects.

This is a statement on the part of the central government regarding the current trend of blindly developing corn-processed ethanol production capacity in some areas.

 Local governments at all levels are required to conduct serious housecleaning of the production capacity and product mix of local corn-processed enterprises, as well as land examination and environmental appraisal. 

In light of the NDRC’s mandate, building bio-fuel ethanol projects in the name of processing corn without approval and blindly expanding corn-based ethanol production capacity is forbidden.

 According to the NDRC, any bio-fuel ethanol project should get approval from state related departments. Four state-designated fuel ethanol enterprises, which were put into operation during the Tenth Five-year period (2001-2005), mainly process stale grain. They are Jilin Fuel Ethanol Company (with an ethanol production capacity of 300,000 tons/year), Henan Tianguan Company (300,000 tons/year), Anhui Fengyuan Bio-chemical Company (320,000 tons/year) and Heilongjiang China Resources Jinyu Company (100,000 tons/year). 

Even the four should not expand their production capacity without state examination and approval. The four are required to further upgrade their production techniques and try to process more kinds of raw materials. 

The fuel ethanol production capacity of the four totals 1.02 million tons a year. In China, the current ethanol gasoline consumption (with a 10 per cent denatured ethanol content in gasoline) accounts for 20 per cent of total gasoline consumption. 

The upcoming Eleventh Five-Year special development plan for the industry of bio-fuel ethanol and auto-use ethanol gasoline and related industrial polices will strengthen the importance of the development rule for the industry, namely “to develop such project to local conditions and ensure grain supply first”.