Discussion on China's Biodiesel Industry     

China's biodiesel industry needs to manage challenges in raw materials, uncertainties in policy and lack of standards. Experts from research institutions, enterprises and colleges shared their views about the domestic biodiesel industry at the 2010 China Biodiesel Industry Development Seminar held in October.

Sun Shanlin, deputy secretary general, China Biodiesel Industry Association

Although the biodiesel industry has been developed for several years in China, there has been no governmental support and corresponding industry regulation system. In particular, the government started to levy a consumption tax on biodiesel at the end of 2008, just as it did on mineral diesel, causing losses in the biodiesel industry. Today the capacity operating rate in the biodiesel industry is very low. Partial companies have halted or cut production while some already quit the biodiesel business.
   The existing biodiesel plants are all using waste oil as feedstock, which mainly comes from restaurants, oil and fat industry and food processing industry. Therefore, the biodiesel industry policy must be linked to the management of waste oil. At present, it makes sense to work out an industry policy for waste oil-made biodiesel because the reuse of wastes could maximize the utilization of resources; it can ensure the safety and quality of edible oil; it can help cut carbon dioxide emission and save energy.

Zhang Yongguang, director, Sinopec Corp Research Institute of Petroleum Processing

The Biodiesel Blending Fuels (B5) National Standards will be effective February 1st, 2011. As the technology for biodiesel blending is already mature in China, we expect government departments could roll out related policies and rules, in particular preferential fiscal and taxation policies, as soon as possible to encourage the development of the biodiesel sector. Sinopec has spent more than RMB100 million in R & D and building facilities in the sector and it may start trial use of B5 in selective provinces and regions in 2011.
   There are several specifications to be closely watched in the process of B5 blending: oxidation stability, acid value, cold filter point, and hexadecane value.

Zhu Qing, Economics & Development Research Institute, Sinopec

To develop China's biodiesel industry, first we have to learn from foreign industry policies and combined them with our actual conditions by providing appropriate tax incentives, subsidies and financial support to the sector. Second, the consumption tax and value added tax on BD100 biodiesel should be exempted while other related taxes to be levied on the various production processes of future woody oil-based biodiesel production should also be exempted. Third, local governments should set up waste oil collection stations. Fourth, the central government should provide supportive policies on energy forest cultivation to lower raw material planting costs. Fifth, China should encourage the development of new technologies on the use of biodiesel.

Wang Guizhi, deputy director, forestry biomass energy office, State Forestry Administration (SFA)

Woody oil is the most promising feedstock for biodiesel. According to the National 12th Five-Year Program on Forest Industry, which is being prepared by SFA, "the development of bio-energy industry relies on those new varieties of energy trees with high calorific value and high oil content, notably Jatropha, Pistacia chinesis Bunge, Cornus wilsoniana and Vernicia fordii, and forest-oil integrated sites should be developed in northwest, southwest and central regions."
   In the first half of 2010, SFA launched a Sino-French biodiesel cooperation program under which the French Development Agency will provide low interest loans to help China develop the forest biomass sector. Under the program, biodiesel plants using forest oil crops will be built, covering processes from growing seedlings to biodiesel production. Five sites in Chifeng (Inner Mongolia), Sanmenxia (Hennan province), Chuxiong (Yunnan province), Lanzhou (Gansu province) and Aksu (Xinjiang region) have been selected as candidates for the plants. The next stage is to further select two sites out of the five and work out the project proposals which will be submitted to the National Development and Reform Commission for approval by the end of 2010.

Prof. Xing Fuwu, South China Botanical Garden, Chinese Academy of Sciences, Li Guiying, secretary general, Biomass Energy Research Center, Chinese Academy of Agricultural Sciences

Shortage in raw material supply has become a bottleneck for the development of the biodiesel industry. In 2008, the Ministry of Science and Technology launched a special national research work on the investigation, collection and preservation of non-food energy plants and related microbial resources for biodiesel production. A large number of oil-rich plants have been founded in south, central and east China. It has collected theaceae and lauraceae plant seeds with oil content of up to 30%. With high yield and easy to grow, the plants are of high commercial potential. A number of endemic species of oil crops with high oil content have also been found in southwest and north China.
   In addition, the ministry collected microorganisms' samples with different habitats in 20 spots across Sichuan, Qinghai, Yunnan provinces and Xinjiang region for investigation. Altogether 185 biodiesel-related microbial strains such as lipase and oil microorganisms have been obtained.

Du Zexue, director, Sinopec Corp Research Institute of Petroleum Processing

The development of the biodiesel industry in recent years has added value to the use of waste oil. It is estimated that at least 1 million tons of edible oil need to be treated in China per year because of expired shelf life. And the oil is indeed feedstock for biodiesel production; tens thousands tons of animal fats are produced as byproduct in China every year, and at least 5 million tons are estimated to remain in recent years; in addition, there are 780 000 tons to 1.41 million tons of acidic oil per year.
   There are two conventional processes that are used to convert waste lipids into biodiesel: the acid-alkali method and the acid method. Sinopec has developed and commercialized a new process called SRCA. With it, CNOOC has finished construction on a 60 000 t/a biodiesel demonstration project in Hainan while Sinopec's two proposed plants, each of 50 000 t/a, in Guizhou and Shijiazhuang are in the stage of designing.

Prof. Liu Dehua, Department of Chemical Engineering, Tsinghua University

The key for the development of China's biodiesel industry is to explore new type lipid resources.
   Using algae to produce lipids is the economical and environmentally friendly way, but more research is still needed as at present the capacity is still relatively low. Using heterotrophic microorganisms such as yeasts to produce lipids is with high productivity and technology is also mature in operation and enlarging reactors. However, the carbon source in fermentation needs to be further developed, in particular for such cheap carbon sources as lignocellulose degradation fluids.

Prof. Ji Jianbing, Zhejiang University of Technology

The sustainable development of the biodiesel industry needs longer industry value chain.
   Tallow includes vegetable tallow and stillingia oil. Vegetable tallow can be used to make high-purity palmitic acid and high-purity biodiesel, and also produce edible oil and cocoa butter. And palmitic acid can also be used to make isopropyl palmitate, which is widely used in cosmetics. The consumption of ethylhexyl palmitate, another derivative of palmitic acid, is on