As China encourages the use of renewable energy for sustainable growth, it is creating a huge biofuel market that Swiss specialty chemical company Clariant does not want to miss out on. The chemical maker is looking for Chinese partners to commercialize its technology called sunliquid, which converts agricultural residue such as wheat straw into cellulosic ethanol, according to Markus Rarbach, head of biofuels and derivatives at Clariant…Full Article: Xinhua Nov 2017

Key Point

  • Switzerland’s Clariant AG (VTX: CLN) is searching for Chinese companies to license its cellulosic ethanol technology. According to Clariant, China could annually produce 150 million MTs of bioethanol from its 800 million MTs of annual agricultural waste (e.g. straw, stubble, etc.).

ChinaAg Comments

  • In September 2017, China announced it would institute nationwide ethanol use in gasoline by 2020. The common ethanol fuel mixture, E10 (i.e. 10% ethanol), is expected to be adopted across China and will likely benefit ethanol producers including, Shandong Longlive Bio Technology (SHE:002604) and COFCO Biochemical Anhui (SHE:000930). At the time, the Chinese government had already introduced ethanol in gasoline in 11 provinces, including Guangxi, Jilin, and Liaoning. Based on China’s 2020 push to institute nationwide ethanol use in gasoline (i.e. E10 or 10% ethanol), the country would need approximately 15 million MTs of ethanol (~45 million MTs of corn). According to a corn analyst with Shanghai JC Intelligence, China may need to import up to 20 million MTs of corn per year to meet this ethanol-based demand. The analyst also noted that corn production in northeastern China is expected to decrease from 50-60 million MTs to less than 30 million MTs over the next three to five years.
  • In July 2015, DuPont and Jilin Province New Tianlong Industry signed an agreement to build China’s largest cellulosic ethanol manufacturing plant. Cellulosic ethanol is a type of biofuel (i.e. not a fossil fuel like coal, petroleum and natural gas) that is produced from wood, grasses, and other plants such as corn.
  • In December 2014, a local official from Heilongjiang was seeking to process 20,000 MTs of corn stalk into 10,000 MTs of industrial oil and 5,000 MTs of biochar (a type of “green” charcoal). In general, stalks can be processed into eco-fuel (e.g. biochar) or used to produce electricity. The burning of corn stalks typically produces black smoke, smog, and haze.
  • In 2004, China launched corn-to-ethanol pilot programs.

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