Cellulosic ethanol investments in China growing rapidly

A series of newsbits shows that cellulosic ethanol is making headway in China, fast. The rising superpower's cars might be running on biofuels made from straw, sooner rather than later. China's agricultural and forestry sector produces vast amounts of biomass 'waste' each year, and companies are looking into turning this resource into renewable fuels. In an earlier post we referred to German technology that has raised the interest of Chinese officials, because it allows the country's huge mass of rice-straw to be converted into liquid fuels. Last year, China produced some 190 million tons of rice, which results in roughly the same amount of waste rice-straw (the actual 'residue-to-product' ratio for rice-straw varies between 0.5 to 4). In theory, this biomass resource alone could yield up to 70 million tons of liquid biofuel per year, roughly 1 million barrels of oil equivalent per day. In short, the potential is impressive. But the hurdles to take are equally great.

Let us have a look at the investments and technology steps that are underway in China. On August 28, an enterprise in Henan Province declared that it would invest 50 million Yuan RMB (€5mio/US$6.3mio) in building first pilot straw-ethanol plant with a capacity of 3000 tons. The company hopes to complete the project and to get the plant up and running in the fist half of next year.
Secondly, on August 30, an enterprise in Shandong Province pushed forward a new enzyme and bioconversion process for the fermentaion of ethanol. Its industrialization model was endorsed and approved by the experts from Chinese Academy of Science. This project, also with a capacity of 3000 tons, is claimed to be the first one in China to have actually realized the production of fuel-grade ethanol from straw.
Thirdly, an oversized state-owned enterprise announced that it would be investing 'a large sum of money' in the biomass-to-liquids industry. This enterprise is targetting a capacity 3 million tons of fuel ethanol by the end of the 11th Five-year Plan period. It considers its most attractive investment to be, once again in producing ethanol from biomass waste, in particular straw. The state-owned company is cooperating with Denmark and the technology for producing cellulosic ethanol is ready to be transferred to China.

China is moving away from using food crops as feedstocks for biofuels. It is a prerequisite if China wants to achieve its stated goals. First, insiders say that the country is already producing 5 million tons of ethanol, five times more than the official figures. Under the 11th Plan, another 5 million tons capacity will have been built by the end of the 2010. Now if this entire production were to be based on food crops as feedstocks (maize, wheat, grain sorghum, cassava), then pressures on food prices might arise. Rice-straw and other biomass residues would make the ideal substitute raw material.

But is cellulosic ethanol really a solution? How far has the technology progressed, and is it really cost effective yet? He Zhenhong, journalist for the Chinese Economic Times, has an overview of the current situation in the country, and offers some nuanced answers:
ethanol :: biomass :: bioenergy :: biofuels :: energy :: sustainability :: cellulosic :: China ::


We quote from his article When could straw-ethanol fuel our cars?

Firstly, we have to take the technology and the industrialization ability into consideration. The main ingredients of the straw are cellulose, hemicellulose, and lignose. The key technology to produce ethanol with straw is the hydrolysis technology of cellulose and hemicellulose and the gene engineering bacilli that can metabolize pentose. It is reported that several enterprises declared that they had mastered the technique of producing straw ethanol and have produced some samples. Some even said that they had built industrialized product lines. No matter how these enterprises preach, one indispensable detail is that among enterprises carrying out straw ethanol experiments, pilot scale experiment only has a capacity of 300 tons at most, and the product line currently being built has a capacity of 3000 tons at most. It can be only regarded as big-scaled pilot scale experiment and is far from industrialization.

Cost is the second factor that we need to consider. The cost of producing ethanol with maize is relatively high. Some pointed factories disclose that maize accounts for 70% of the whole raw materials used to produce fuel ethanol. But the reporter has learned, in order to popularize fuel ethanol, our country has subsidized the pointed factories by the standard of over 1000 Yuan per ton. Theoretically speaking, the price of straw is much lower than that of maize. The cost of producing ethanol with straw will definitely be lower. But under the condition that big-scaled industrialization of straw ethanol has not been completed, the economic efficiency will accordingly decrease. The enterprises, who are carrying out experiments on straw ethanol production, said that 6 tons of straw could produce one ton ethanol. But the cost will be equal to the maize ethanol until the 11th Five-Year Plan period.

Therefore, the rational conclusion should be that we have obtained the technology of producing straw ethanol, but we still have to solve problems in industrialization and cost. In this case, the right choice should be that those powerful big-scaled enterprises cooperate with scientific research institutes to carry out pilot scale experiments. Then utilize the optimized index, carry out industrialization experiment, and finally only after the experiment is proved successful, can it be popularized completely. When doing so, the backup is capital. Therefore, some relevant people appeal that we should lower the doorsill of bank loan to those enterprises who are carrying out straw ethanol test, loosen the refinancing terms in the capital market, and offer favorable consideration on special fund for national major projects.

How far is the straw ethanol from us? For every enterprise and place that has an impulsion in straw ethanol, this question should become one that has to be clarified.

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