Car in cities in Northeast China's Heilongjiang, Liaoning and Jilin provinces, Central China's Henan Province, and East China's Anhui Province have already been using gasoline with 10 per cent ethanol at a slightly cheaper price than normal gasoline.

As a result of the trial uses of fuel ethanol in the five provinces, which started in the 10th Five-year Plan (2001-05), the green energy has accounted for about 2 per cent of China's total gasoline consumption, or about 1.02 million tons.

Liu Qun, an official at the Industrial Department of the National Development and Reform Commission, predicts that overthe next five years ethanol consumption will be expanded to about 5 per cent of total gasoline, or more than 3 million tons. This means more provinces will adopt the mixed fuel.

Fuel ethanol is made from plants. It is listed as a renewable and green energy that can reduce greenhouse gas emission - a major cause of global warming - and gradually reduce China's rocketing reliance on imported fossil fuel.

At the 2006 World Biofuels Symposium China held from Wednesday to Friday in Beijing, Liu said that the upcoming 11th Five-Year Plan (2006-10) for fuel ethanol development to be released in two months will require the mixed gasoline to be more widely applied in central and western China.

Local governments will be encouraged to adopt trial uses of the mixed gasoline.

China has four fuel ethanol plants in Henan, Anhui, Jilin and Heilongjiang provinces. A fifth one is very likely to be approved in Guangxi Zhuang Autonomous Region in the next year, where ethanol production is based on cassava, Liu told China Daily at the symposium.

He predicts that in the next five years, China will steadily develop its ethanol fuel production capacity, and that factories will benefit from exemption from the 5-per cent consumption tax and the 17-per cent value-added tax.

In addition, the government will subsidize approved manufacturers when the international petroleum price is too low for fuel ethanol producers to make a profit, but the concrete indicator for the subsidization has to be further discussed.

The government will also support the construction of fuel crop bases by subsidizing farmers. But, Liu said, China is a country with a huge population and little arable land, so the development of fuel ethanol will be based on grain. In principle, fuel ethanol plants based on corn would not be approved.

(China Daily 09/16/2006 page2)