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Chinese Corn Processors Still Focusing on Ethanol Production

Chinese corn processors are still betting on ethanol production despite recent government action to halt to the expansion of the corn ethanol industry, according to a report in the People’ Daily. Earlier in December, China suspended further expansion of its corn ethanol industry in order to halt a rapid increase in corn prices, which climbed almost 5% in November. (Earlier post.)

In China, ethanol is used in a 10% blend with gasoline (E10). The government estimates that the blend will account for half of domestic gasoline consumption by 2010, 2.5 times the current percentage.

Despite the suspension, investors and local governments continue preparing new projects. Some processors dodge policy restrictions by claiming to make alcohol, which can be turned into fuel ethanol once the government eases limits. China’s corn processors are expanding their production capacity of alcohol by an estimated 1.6 million tonnes (534 million gallons US) per year, according to China National Grain and Oils Information Center.

The government has urged development of bio-fuels with non-grain crops, like sorghum and cassava, amid concerns of grain supply and price stability. However, enterprises, especially in corn-rich northeast China, still favor corn processing for easier access to raw materials, low costs and mature technologies, while local governments tend to approve new projects to draw investment.

China will become a net corn importer in the next two years, according to research by the Dalian Commodity Exchange and the National Grain and Oils Information Center.

“Our land has already been worn out to feed 1.3 billion people,” said Zhai Huqu, president of the Chinese Academy of Agricultural Sciences, warning that reliance on the mass consumption of corn for energy would lead to environmental problems.

Expanding industrial demand, along with increasing need for corn by livestock and the reluctance of corn growers to sell in expectation of higher prices, contributed to a 6.8 percent rise in the price of corn in 2006.

Comments

Engineer-Poet

And there you have the USA's future lever upon China:  food.  China will be importing both energy and food, while the USA will import only one and has at least the option (if we get serious about it) of getting rid of the imports too.

Mark A

So it starts. Food vs biofuel. Feed our bellys, or, feed our gas tanks. Drive anywhere we want, just dont have anything to eat once we get there. Happening in China now, and anywhere else next, if we arent carefull.

allen_Z

They could just import ever more food, or develop other renewables. After all, they have ~$1 trillion in foreign reserves socked away.

Harvey D.

Mark A:

Food + Fuel is possible for everybody (in North America) without imports if:

1) Food production efficiency is increased 3X. (Example: Beef meat production requires about 11 times the energy supplied by the end product, we could get the equivalent calories much more efficiently)

2) Fuel consumption efficiency is increased 4X (with PHEVs, electric trains, better homes, offices, industries, HVAC etc)

3) Daily food consumption is reduced from 4000 to about 2000 calories per capita. (This would solve many another major problems. Wide spread OBESITY, and many other associated health problems could be avoided. Large 3-Ton cars-SUVs etc may no longer be required).

USA + Canada could support (3X) or 1+ billion, regular size, people (without energy and food imports) if we learn (and accept) to produce and consume with more foresight, reservation and sagacity.

kevin

Why is it food vs bio fuel what do you think happens to the unused portion of the corn. pig food, cow food
chicken feed. oh yea then we eat them.
lets also remember about farm Subsidize they could grow a lot more we pay them not to. I seems when someone makes the argument food vs fuel it is not thought thourgh

SJC

We will not get much above E5 with corn and we grow a lot of it. To go higher, we would have to use cellulose and gasification of agriculture and forest biomass. Most other countries are in similar situations. Ethanol will be an additive and not a main transportation fuel for quite some time.

Mark A

Food vs fuel is an issue and needs to be thought through. Here in the USA, much of our prime farmlands are being replaced with urban sprawl. In other words, our best producing farmlands are being covered over with strip malls and houses, with 2.3 kids, with yards being fertilized and herbicided at 10X the rate of the average farm. It shouldnt take an Einstein to see that there will be a problem feeding MORE people with LESS land. We may be OK for 20-25 years. Lets let our children worry about it? Our food system is fragile enough, to have to compete with biofuel.

I also dont see how we can just spout off and say we should increase food production 3X, and increase fuel efficiency 4X. Thats like saying if we jump high enough, we can touch the moon! We cant just wish for greater farm efficiency, with farming being such a dangerously risky profession. We are making great strides nonetheless. Farming is a risky venture in a good year. Throw in a Katrina style weather disaster, or drought, at the wrong time in a crops growing cycle and you have a major problem. Cant just restart, as most crops will not grow under snow.

I do agree that we all need to do our part, efficiency wise, and that should start with our own waistlines. Farm efficiency is increasing slightly, currently offsetting what is being lost.

Battery electric vehicles are the future, and not gasohol powered cars, for the majority of the transportation needs. What needs to be determined is whether a big break through in battery technology, or, some highly developed fuel cell will generate the current required for the electric motors in our electric cars. I am very excited at this future. I just hope I have something healthy to eat.

SJC

Much of the worry revolves around nitrogen fertilizer made from ammonia, made from natural gas. You can make the ammonia from gasifying biomass to get the H2 to make the NH3. When you can make the fertilizer from the biomass that just grew, it makes it less of a problem. We just took the expedient route by using what was cheap, natural gas.

Harvey D.

Kevin:

You are correct.

Getting more of the essential daily calories (1500 to 2000 and not 4000 per capita) directly from corn or derivatives, or (grains, vegetables, fruits, fish etc) can be as much as 3X more efficient than eating prime beef. Secondly, too much red meat is not as good as we think for our health. The choice of food we eat (+ the quantity) determines how much total energy we consume just to feed (not overfeed) ourselves. That (+ all the energy used/wasted to transport and treat obesity related illnesses) is where the 3X increase in energy efficiency could come from.

Energy conservation is not (and should not be) restricted to transport vehicles. However, since efficiency is so low (15%) in that field, it would be rather easy to quadruple it (4X) to 60% with reduced size PHEVs and EVs. We do not need a 3-Ton gas guzzler to drive to work, take the kids to school or go shopping. A 1.0 to 1.5 Ton PHEV would do. We have to be more reasonable in our choice of vehicle and stop pretending than the vast distances are to blame. A Toyota Prius will take the kids to school (just as fast) with 1/4 the energy than a large SUV.

The same thing can be said about the choice we make for our residence/home, HVAC, offices, industries etc. Energy has been so cheap that we forgot to build with more energy efficiency in mind. A well built, properly equipped, all electric home, can manage on 25 KWh/day instead of 75 KWh/day for the average poorly built, badly equipped, older unit. Many have done it already, but millions remain to be done.

The 3X to 4X reduction in energy consumption is not impossible. Conservation is a lot cheaper to implement than to continously produce and consume more and more energy. Eventually, we may not have the choice to do or not do it. At 300+ lbs, my neighbour (and yours) is already too big.


Mark

Our lever is food? All they have to do is stop buying our Treasury Bonds or worse sell the ones they have. They can buy food from other countries while we get a prime rate of 10%.

Engineer-Poet

You're assuming that other countries will have food to sell, Mark.  It won't take many years of declining cereal production before it'll be the US, or nothing.

An Engineer

One more time: Why cultivate fuel crops when you can make a lot of fuel from readily available (and cheap) wastes? Leave the farmers to grow us food, that's what they know (and get subsidised for).

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