We never imagined-never for a minute-that Chinese officials would react so swiftly to our comment last week about the increasing use of biofuels and the upward pressure that puts on food costs, particularly grains (OGJ, Dec. 11, 2006, p. 32). But react they did-and very swiftly, too.
On Dec. 12, Zhu Zhigang, China’s vice-minister of finance, assured the public of sufficient food supplies amid concerns over the rising cost of food resulting from the use of grains like corn in the development of biofuel.
Zhu made the comments in the face of rising costs for grain-particularly for corn as the main raw material for ethanol used as vehicle fuel. Zhu said biofuel can be developed only if China’s food supplies are guaranteed first.
Other Chinese officials chimed in with similar remarks.
Pending disaster
Zhai Huqu, president of the Chinese Academy of Agricultural Sciences, said, “We can do research on using corn and other grains as an energy substitute, but it cannot be industrialized.” Even more to the point, Zhai said: “It will be a disaster for us if we depend on a huge amount of corn and other grains for energy.”
That should come as no surprise as ethanol has become the main biofuel produced in China, with output hitting 1.02 million tonnes last year-and corn accounting for 76% of the raw material. The others are wheat and sorghum.
For his part, Zhu picked up Zhai’s refrain, saying that China would carefully evaluate the grain consumption of the biofuel project and its influence on the food chain. He also said the government would impose strict controls on any biofuel project using grain as the raw material.
In that regard, the Chinese might take a leaf out of Japan’s book of ethanol production. Instead of relying on the food chain as a supply source for the production of ethanol, the Japanese are developing a sweet tooth for ethanol produced in Brazil.
Sweet tooth
In fact, Brazil’s state-owned Petroleo Brasileiro SA (Petrobras)-in cooperation with Japan’s Mitsui & Co.-has concluded a deal to sell Japan ethanol produced from sugarcane for use in electric power plants starting in 2010.
Under the deal, Mitsui will secure sugarcane fields and build a facility to extract ethanol from the crops, while Petrobras will lay pipelines in Brazil and secure tankers for transport to Japan.
Annual shipments of Brazilian ethanol to Japan are expected to total 3 billion l. That amount will include exports for use in automobiles, which are increasingly using the material as a fuel.
Japanese power utilities, including Tokyo Electric Power Co., are reportedly interested in using ethanol to power their stations as using the substance in combination with fuel oil would require minimal equipment changes.
To us, that sounds like a sweet deal, and certainly one that does not go against the grain.
