South China Morning Post
July 15, 2008 Tuesday
Oil firms get go-ahead to build biodiesel plants using jatropha
BYLINE: Eric Ng


Beijing has given the approval to the nation's three largest oil
producers to build three demonstration biodiesel plants using
jatropha as raw material, to spur sustainable development of the
nascent clean energy industry.

The approval came as the industry is hurt by rising cost of
feedstock waste vegetable and cooking oil. Jatropha, a non-food
plant, is an alternative feedstock.

The National Development and Reform Commission said it had
approved PetroChina's 60,000 tonne-a-year biodiesel project
developed by its refining and petrochemical unit in Nanchong,
Sichuan province.

The project costs 180 million yuan ($205HK.8 million) and is
scheduled to come on stream by the end of the year.

China's 50,000 tonne-a-year plant in Guizhou province and China
National Offshore Oil Corp's 60,000 tonne-a-year plant in Hainan
were also approved.

All three projects use jatropha as feedstock. Discovered in
southern China, jatropha is a hardy plant that can grow in harsh
environment and tolerate dry and hot weather.

Investment in biodiesel has been growing on the mainland as the
government encourages the use of clean energy. Total output
capacity was estimated to rise to 4 million tonnes this year from
3 million tonnes last year, China Agricultural Products Trading
Centre said. However, due to surging waste vegetable oil prices
and fuel price control, many developers had suspended or scaled
back their projects, it added.

Britain-listed China Biodiesel International Holdings and
US-listed China Clean Energy, caught by surging material costs,
have switched some of their diesel production capacity to more
lucrative chemicals production after profit declined.

The nation's largest biodiesel producer, Gushan Environmental
Energy, which has procurement contracts for up to three years, has
however kept expanding capacity and continued to post profit
growth.

China Biodiesel's share price slumped 42.86 per cent year-to-date,
compared to a 63.78 per cent plunge in China Clean Energy and a
20.64 per cent gain in Gushan.

--
GRANOVSKAYA,YELENA
Environmental and Life Sciences