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

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 

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.

Environmental and Life Sciences