Monday, April 07, 2008

Biofuel Market Benefits from China's Multi-pronged Efforts toward the Development of Renewable Energy

Biofuel Market Benefits from China's Multi-pronged Efforts toward the Development of Renewable Energy

April 7 2008 Research and Markets ( has announced the addition of "Strategic Analysis of the Chinese Biofuel Market" to their offering. The rapidly developing Chinese biofuel market is expected to gain momentum with the Chinese Government's move to assign top priority to renewable energy. Challenges thrown up by agricultural, energy, and environmental considerations have stimulated increasing interest in renewable energy sources, primarily biofuel. Although the market is still in the embryonic stage, the potential it offers is enormous. Since 2001, China has been actively propagating the utilization of environmental-friendly energies. Since biofuel is a low-pollution fuel compared to mineral petroleum or diesel, it has proved to be the best option among these new energies. The Renewable Energy Act, 2006 defines the scope of biofuel and acknowledges its strategic position in China's economic growth. The Government has introduced a special fund for the development of renewable energy. Producing far less pollution than mineral petroleum or diesel, biofuel also helps to bolster China's strategies to promote an inherently cleaner economy.

Since the 1990s, China has been witnessing increased growth in energy consumption. Domestic sources are unable to cope with the rising demands from the industry and transportation sectors, consequently forcing China to depend heavily on imported petroleum. To implement its long-term development plans to boost biofuel production, the Government offers tax exemption and financial subsidies for rural residents engaged in the cultivation of biofuel energy crops. By promoting the cultivation of energy crops and providing working opportunities in the biofuel industry, China is helping the development of the rural economy. The Government is also following a policy of protectionism and creating an advantageous market environment for domestic manufacturers. "At present, most biofuel manufacturers are domestic participants," notes the analyst of this research service. "In fact, all four bioethanol factories are large-sized state-owned enterprises."

Increased Production of Crop-based Energy Alternatives and Tighter Legislation to Boost Biofuel Market Initiatives

The shortage of feedstock, especially in the wake of the increased demand for biofuels, is a major constraint to the development of the bioethanol as well as the biodiesel segments. As biofuel feedstock cultivation is still in the development stages, large-scale supply is lacking at this juncture. "Whether the feedstock supply can satisfy the need of the biofuel industry is determined by the land availability for energy crop and the security status of food in China," says the analyst. According to the Biomass Industry Development Plan, arable land was not allowed to be used for the cultivation of non-food crop; instead, feedstock cultivators could only use wasteland, alkaline, or saline land. The National Development and Reform Commission has outlined a detailed plan of action for the bioethanol industry, wherein the production of bioethanol is expected to reach 200,000 tons by 2010. China has also commissioned four pilot projects dedicated to the production of bioethanol to augment its efforts to step up production.

A series of guidelines, plans, and strategies were undertaken to invigorate the production of biomass energy since 2005. To ensure the steady development of the domestic biodiesel industry, China is likely to continue having a stern regulatory control on the biodiesel industry from 2007 to 2010, while the more advanced bioethanol segment already has regulations governing it," says the analyst. This stringent national control over the bioethanol industry has dissuaded foreign investment." However, investors could gain favourable policy outcomes and government support by liaising extensively with government branches. They also need to conform to the Chinese regulatory environment and establish alliances with local manufacturers instead of setting up wholly funded branches.

This Frost & Sullivan research service titled Strategic Analysis of the Chinese Biofuel Market provides an overview of the Chinese biofuel market size and structure as a whole, along with the complete analysis of key market drivers, restraints, and trends that are impacting the market growth of key engineering plastics. In this research, Frost & Sullivan's expert analysts thoroughly examine the following markets: biodiesel and bioethanol.

Key Topics:

- Executive Summary

- Strategic Analysis of the Total Biofuel Market in China

- Strategic Analysis of the Chinese Biodiesel Market

- Strategic Analysis of the Chinese Bioethanol Market

- Regulatory and Legislatory Analysis

- Appendix

For more information visit


Research and MarketsLaura WoodSenior ManagerFax: +353 1 4100

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