China will approve more fuel ethanol plants using feedstocks other than grains, after suspending approval of such projects for more than a year on concerns over food supply and inflation. The National Development and Reform Commission has endorsed proposed plans by five provinces to build plants using sweet potatoes, sweet sorghum or cassava, it said on its Web site (www.ndrc.gov.cn).
The announcement did not approve any specific plants, but invited the provinces of Hubei, Jiangsu, Jiangxi and Hebei, as well as Chongqing, to finalise plans for such projects and make a formal proposal.
Proposals would be in line with Beijing's policy encouraging the use of feedstocks other than grains, as long as planting those crops does not take land away from grains. Beijing is eager to reduce its dependence on expensive crude oil, but it is also increasingly concerned that planting crops for fuel ethanol could limit China's ability to grow enough grains to feed its people.
The relaxation comes as world oil prices stay close to record high levels reached in March. China, the world's second largest oil consumer, relies on imports for half of its needs. China's largest fuel ethanol producer, China Agri-Industries Holdings Ltd, said last month it planned to build a second plant using cassava in Guangxi this year.
Guangxi plans to blend 10 percent fuel ethanol into gasoline used in all cars this month, following the start-up of China Agri's first plant in December. China Agri intends to build plants in Hebei and Hubei provinces, using sweet potatoes as a feedstock, its managing director Yue Guojun told Reuters last month.
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