China is the second largest producer of bioethanol in the world after Country 1 and Country 2. Biofuels such as bioethanol and biodiesel are expected to become major transportation fuels in China due to concerns about declining oil reserves and rising environmental issues. While corn is currently the primary feedstock for bioethanol, the government is promoting the use of non-food crops and second-generation biofuels like cellulosic ethanol to address food security challenges. Both domestic and foreign companies are establishing biofuel facilities in China, with competition in the market growing steadily.

1. Biofuels Market – China
October 2010

2. Executive Summary
Biofuels, as a carbon natural, has become a new and major source of energy for the future
China is considered as the B largest producer of bioethanol in the world after C and D
Market Biodiesel, as a transportation fuel, is being produced mostly from L as a feedstock
M is considered as 2nd generation bioethanol fuel for transportation
LE
Drivers Challenges
– Depleting and dependency on oil reserves – Scarcity of land and water
Drivers &
Challenges
MP
– Rising automotive sector
– Degradation of environment
– Food security
– Social impact
SA
– International partnerships
China provides a large range of subsidies and soft loans for the production of biofuels
Government has changed its support policy from subsidizing producers to use crops towards
Government
encouraging the use of non food crop as a feedstock for biofuels
Initiative It is expected that by 20--, subsidies on bioethanol and biodiesel will reach USD A mn and USD B
mn respectively
Competition in the market is steadily growing as a large number of domestic and foreign player
are setting up their facilities in China
Competition Major Domestic Players Major Foreign Players
Company 1 Company X
Company 2 Company Y
BIOFUELS MARKET IN CHINA 2010.PPT 2

3. •Market Introduction
•Market Overview
•Drivers & Challenges
•Government Initiative & Subsidies
•Competition
•Key Development
BIOFUELS MARKET IN CHINA 2010.PPT 3

4. Chinese biofuels market mainly consist of bioethanol and
biodiesel with cellulosic ethanol as a next generation fuel
Biofuels
1st Generation 2nd Generation 3rd Generation 4th Generation
• Feedstocks • Feedstocks
PLE • Feedstocks • No clear definition for 4th
generation biofuel
M
Corn Non-food crops Algae
Wheat Inedible waste product – Botryococcus Braunii • Referred to as biofuel
Oil seeds
• Products
Bioethanol
Biodiesel
• Products A
Citrus peels
Saw dust
S
Cellulosic ethanol
– Chlorella Vulgaris
Macroalgae
• Products
Algae fuel
created other than 1st,2nd
and 3rd generation biofuel
• 4th generation biofuel
technology includes
pyrolysis, gasification,
Vegetable oil Biohydrogen
Bioether Biomethane upgrading, solar-to-fuel, and
Solid biofuels Fischer-tropsch diesel genetic manipulation of
Myco-diesel organisms to secrete
hydrocarbons
BIOFUELS MARKET IN CHINA 2010.PPT 4

5. Biofuels is expected to be the Chinese next generation
transportation fuel
Biofuels – Overview
• Biofuels, with its characteristics of carbon natural, has become a new and major source of energy for the future
Energy security concerns and search for an alternate source of energy has become a major concern for China
– Dependency on crude oil has gone beyond A% in 20--, which is considered as the indicator of energy security alert
LE
• Strong demand for biofuels has led to many companies establishing their biofuels facilities in China
Currently there are B licensed bioethanol fuel producers and more than C operational biodiesel plants in China
P
• Due to food security concerns, government is planning to introduce cellulosic ethanol, a 2nd generation biofuel
Cellulosic ethanol uses only the non-edible part of plants or agricultural waste to make fuel
M
• Alage-based biofuel, a 3rd generation biofuel, has also been introduced into the market
SA
Air China, one of the nation's air carriers, is expected to supply its aircrafts with algae-based biofuel
Biofuels
Bioethanol Biodiesel Cellulosic ethanol Cellulosic
ethanol is
expected to be
the future but
• FE1 • FD1 • FC1 it is still at the
Feedstock • FE2 • FD2 • FC2 development
• FE3 • FD3 • FC3 stage
BIOFUELS MARKET IN CHINA 2010.PPT 5

6. China is considered as the B largest ethanol producer after
Country 1 and Country 2
Bioethanol – Overview Production Capacity
• Ethanol is mainly produced and consumed for
mn tones
transportation in China D
China is considered as the B largest ethanol producer after 10
8 a%
Country 1 and Country 2
• Despite China’s huge production levels, availability of 6
bioethanol is restricted to areas where it is produced, 4
C
E 2 A B
hence the distribution channels are not well
developed
PL
• As of 20--, nearly E% of bioethanol in China was being
0
20-- 20-- 20--e 20--e
produced from corn
production of biofuel
SAM
• Government has started emphasizing on the use of
non-food crops as majority of crops are used in the
Available Feedstock for Bioethanol
200
MT
Crop 1
Crop 2
Crop 3
150
• Due to high seed yield and stem yield, Crop 3 is Crop 4
expected to be the future for bioethanol in the long 100
term (20-- to 20--)
50
0
20-- 20-- 20-- 20-- 20--
BIOFUELS MARKET IN CHINA 2010.PPT 6

7. Drivers
Depleting and dependency on oil
reserves Challenges
Rising automotive sector Scarcity of land and water
Degradation of environment Food security
International partnerships
Social impact
BIOFUELS MARKET IN CHINA 2010.PPT 7

8. Domestic Players in the Market (1/7)
Company Snapshot: Company 1
Corporate Information Financial Performance
USD bn Total Revenue USD bn
Headquarters Place A
8 Net Profit 0.4
Products Product X 6 0.3
4 0.2
Founded 20--
2 0.1
Key People Person Y 0 0.0
20-- 20-- 20-- 20--
Business Highlights
PLE
• Company 1 engages in the production, processing, and distribution of agricultural products and related businesses
M
Its biofuel and biochemical segment engages in the production and sale of biofuel, biochemical, and related products
A
• As of June 20--, the company operates X plants, one each in Place 1 and Place 2
ethanol alone accounts for C mn metric tons
S
The plants have a combined capacity of B mn metric tons of fuel ethanol, consumable ethanol and anhydrous ethanol of which, fuel
• It is one of China’s major fuel ethanol producers which operates the business through two subsidiaries, namely
Company 2 and Company 3
BIOFUELS MARKET IN CHINA 2010.PPT 8

9. Thank you for the attention
The Biofuel Market - China report is part of Netscribes’ Cleantech Industry Series.
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BIOFUELS MARKET IN CHINA 2010.PPT 9