Mi Duo & Zu Siya

Due to the high expectation of ethanol gasoline’s promotion and profits, the fuel ethanol has enjoyed a rapid growth from 2017 to 2019 domestically. However, with people being cautious gradually, fuel ethanol profits falling, and fewer and fewer new blood injected into the industry, the production capacity of Chinese fuel ethanol didn’t see any growth in 2021. But driven by the high price of crude oil, the demand for fuel ethanol still has room for growth.

Production capacity increased slightly in 2022

Without production expansion, the total production of domestic fuel ethanol was 4 590 000 t/a in 2021. Enterprises’ status is shown in table 1.

The planned and ongoing domestic fuel ethanol projects are as follow, some of which will conduct SOP in 2022. The capacity of Chinese fuel ethanol is expected to reach 5 590 000 t/a in 2022.

     Demand-supply relation has changed from short supply to oversupply

Chinese fuel ethanol from 2017 to 2021 has gradually changed from short supply to oversupply, which showed an increasing balance differential (See table 3). The unstable growth of domestic fuel ethanol supply was affected by profits and ethanol gasoline policies. In 2020 domestic fuel ethanol enterprises were in the red for most of the time, which impacted enterprises’ production spirits. Compared with 2019, the production capacity in 2020 has declined while 2021 has resumed growth, reaching 2 901 000 tons.

The supply-demand of Chinese fuel ethanol from 2017 to 2021 was featured as follows: The government has put forward one goal that ethanol gasoline will realize universal coverage in 2020. The supply and demand of fuel ethanol has shown growth from 2017 to 2019. Due to COVID-19 in 2020, the trips in the first quarter have declined. At the same time, the low oil prices have impacted the biological energy industry, leading to both supply and demand of fuel ethanol going down. With COVID-19’s controlling status being better in 2021, fuel ethanol demand and oil prices have grown rigidly and manufacturing loss has reduced. Apart from these, the sales pressure of edible and industrial alcohol has increased. Some enterprises’ production enthusiasm of fuel ethanol has recovered from before, and the fuel ethanol industry has been on the threshold of both supply and demand increasing together.

High crude oil prices contribute to bioenergy development

Since 2019, there has been no new promotion areas for ethanol gasoline, and the leading enterprises of fuel ethanol demand are SINOPEC, PetroChina, CNOOC, SINOCHEM and China National Aviation Fuel. A few private-owned enterprises are qualified for fuel ethanol production. The high crude oil price in 2021 will help bioenergy development, and the consumption of fuel ethanol will show an increasing trend, reaching 3.33 million tons, an increase of 565 000 tons compared with 2020.

In the following five years, the supply and demand of Chinese fuel ethanol are expected to increase, but due to weak competitiveness, exports will stay at a low volume. Although the promotion of ethanol gasoline has slowed down, there is still room for the development of biofuels. And the demand for fuel ethanol is expected to grow with the increase in rigid demand. The supply-demand balance forecast of domestic fuel ethanol from 2022 to 2026 is shown in the table 4.

Under the background of world food crisis and soaring food prices, we need to take actions to ensure food safety, such as using Manihot and other non-grains to produce Ligno-cellulosic Bio-Ethanol, which is to achieve the production switch among industrial and edible alcohol and fuel ethanol. And production volume increasing of fuel ethanol and production cost decreasing will be the development directions of technology in the future.