China announces new biofuels policy: non-food feedstocks to receive incentives up to $878 per acre; plants to receive up to 40 percent of project cost if no foodstocks used

In China, the Ministry of Finance has announced policies to promote the production of biofuels from non-food feedstocks. The subsidies will be flexible, and tied to the price of crude oil. Farmers will receive up to $878 per acre planted with forest products for biofuels, and up to $791 per acre for crops planted for biofuels.

The Ministry also said it would subsidize demonstration projects for cellulosic ethanol, sweet sorghum, cassava or forest-product biodiesel feedstocks. Incentives would cover up to 40 percent of project cost.

China has recently announced abandonment of ethanol projects that use foodstocks, excepting existing plants and those already under construction. China is the third-largest ethanol producer, behind Brazil and the US.

Overall, jatropha cultivation will be expanded from 66,000 acres to 660,000 acres. The expansion is planned for Yunnan, Sichuan and Guizhou provinces, which have the most suitable climate for jatropha cultivation.

The expansion takes place under the auspices of China’s Green Poverty in Reduction program which was launched in 2006. The $8.5 billion project is a joint venture between the United Nations Development Programme (UNDP), China’s Ministry of Science and Technology and the Ministry of Commerce. The project aims to develop biofuels and other eco-friendly projects in China’s poorer western provinces.

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