China debuts reformulated hydrous ethanol; can blend with any concentration of gasoline

In China, Kunming Wuhua Zhisheng Economic and Development Research Institute distributed the first hydrous ethanol 93-octane gasoline. The formulation, which uses a patented emulsifier to reformulate ethanol so that it mixes with any concentration of gasoline without causing damage to vehicles. The fuel is distributed via a pilot gasoline station in Kuming, in Yunnang province. Brazil uses hydrous ethanol, while the US favors an anhydrous variant. The reformulated ethanol is being marketed at comparable prices to gasoline of $0.85-$0.90 per liter, or $3.21 to $3.40 per gallon.

China background

China Biodiesel has just completed a capacity expansion to 100,000 tonne at its biodiesel plant in Xiamen, Fujian Province. Capacity was expanded more than threefold. The company said that it has secured new feedstock sources in Southeast Asia to assure an affordable supply for the plant.

In technology, Chinese researchers say that they have developed a process to increase the conversion rate of rice straw into biogas by 65 percent. More than 230 million tonnes of rice straw are left over from harvests each year, but to date rice straw has proved resistant in the conversion process. The researchers pretreated rice straw with sodium hydroxide to increase the results from anaerobic digesters. The scientific team said that three pilot facilities have been built using the technology.

In investment, Eastern Renewables Fuels said it plans to expand cassava planting to 4500 hectares in 2008 to meet rising demand. The company ships its output to Guanxi province in China.

Also, China Agro-Technology announced that it has secured $300 million in financing for biodiesel acquisitions and operations. The company is focused on building capacity to process jatropha oil to supply the growing demand lower-cost biodiesel. China’s largest state oil company, Sinopec, said it will invest $5 billion in jatropha and palm plantations in Indonesia.

In policy, Grain prices have been stabilized in the country, via an increase of 30 percent in farm payments and an additional $3.5 billion in seed, fuel and fertilizer aid to farmers. As a result, grain prices have increased by only 1.2 percent.

Meanwhile, experts are warning that plans to produce biofuels in the China’s southwest will threaten biodiversity in the last remaining section of virgin forest in the country. Speakers warned against the planting of jatropha trees, which would threaten native grasses and a diverse range of animal species, said academics attending the International Workshop on Biodiversity and Climate Change in Beijing.

In research, the Chinese and Italian governments have initiated a feasibility study for jatropha biodiesel at Sichuan University. The project received $650,000 in support from Italy. The project is the third signed by Italy and China, promising cooperation in biofuels research since mid-April. The others covered industrial waste oil-based biodiesel in Hubei Province, and thin-film solar cells in Shanghai.

In analysis, a change in Chinese meat consumption habits since 1995 is diverting eight billion bushels of grain per year to livestock feed and could empty global grain stocks by September 2010, according to a new study from Biofuels Digest, now available for download here in an expanded version.

The Study, “Meat vs Fuel: Grain use in the U.S. and China, 1995-2008″ concluded that, even if the U.S. ethanol industry were shut down tomorrow, rising Chinese demand for meat, and the ensuing livestock feed demand, will empty global grain stocks as soon as 2013. The report offers gloomy news for policymakers who have hoped to address global food vs. fuel concerns by restraining U.S. ethanol demand.

“It’s not food, it’s not fuel, it’s China,” said Jim Lane, editor of Biofuels Digest and author of the report.

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