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The Potential Demand for Fuel Ethanol Would be Met Through Multiple Channels

China Agriculture Report By CnAgri2017-09-25 11:09:31China Agriculture Report Print If the gap of 10 million MT fuel ethanol totally depends on grain ethanol, 30 million MT of corn processing will be increased, which is difficult to carry judging from corn supply and supply relation. The gap of fuel ethanol possibly would be met through multiple channels. 
(1) Grain fuel ethanol capacity would expand. At the end of 2016, China loosened the limitations on access to fuel ethanol sector and foreign investors were allowed; the 13th Five Year Plan for Developing Renewable Energy and Implementation Plan of Expanding Biological Fuel Ethanol Production and Promoting the Use of Ethanol Gasoline for Motor Vehicles show clearly: on the premise of controlling the total volume, grain fuel ethanol projects would be moderately developed, which would be one way to consume grain with a long storage time, low quality and heavy metal pollution.    
(2) Importing fuel ethanol also is one way to meet domestic demand. In 2004, China adjusted the tax for ethanol imports down to 5% from 30%, and also canceled the consumption tax of 5%, resulting in fuel ethanol imports to leap to 266,000 MT in 2014, 477,000 MT in 2015 and 872,000 MT in 2016. At the end of 2016, the tax for fuel ethanol imports were adjusted up to 30% again, resulting in import stagnation. Along with an increasing demand in the domestic, the domestic demand can be regulated by taking full advantage of importing.   
(3) Thanks to matured technologies and an increasing market demand, the supply of non-grain ethanol and cellulosic ethanol would further go up. Currently, under-construction capacity of cellulosic ethanol and non-grain ethanol using cassava, sweet potatoes and sweet sorghum as raw materials have approached to 2 million MT, most of which would have been put into operation by 2020.  
(4) Besides, China also is developing coal ethanol and will become one source of fuel ethanol in the future.    
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