China Promotes Ethanol-Based Fuel in Five Cities

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Last updated at: (Beijing Time) Monday, June 17, 2002

China Promotes Ethanol-Based Fuel in Five Cities

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China is promoting ethanol-based fuel on a pilot basis in five cities in its central and northeastern region, a move designed to create a new market for its surplus grain and reduce consumption of petroleum.

The cities include Zhengzhou, Luoyang and Nanyang in central China's Henan province, and Harbin and Zhaodong in Heilongjiang province, northeast China.

From June 8, all motor vehicles carrying a license plate starting with "Yu A" in Zhengzhou, capital of Henan, are ordered by Zhengzhou Municipal Government to use ethanol-based fuel. Motorcycles, military vehicles and vehicles in transit from outside the city are exempt.

The promotion has been approved by the State Economic and Trade Commission and the State Development Planning Commission.

Under the program, Henan will promote ethanol-based fuel across the province by the end of this year.

Officials say the move is of great importance in helping to stabilize grain prices, raise farmers' income and reducing petrol- induced air pollution.

Fuel ethanol production facilities have been operational in Tianguan Group Company in Henan, which has a production capacity of 200,000 tons of ethanol a year, and in Heilongjiang.

A similar project is under construction in Jilin province, northeast China, which has a production capacity of 800,000 tons of ethanol using corn as the raw material.

Zhang Xiaoyang, general manager of Tianguan Group, said the three projects were expected to consume several million tons of corn each year as three tons of grain is needed for one ton of ethanol.

China consumes 36 million tons of petrol each year.

Officials say ethanol-based fuel will be promoted in many big cities in coming years.

An official with the State Planning Commission said manufacturing of ethanol-based fuel would create a long-term, stable and controllable grain market for the country.

China has been a net importer of oil for the ninth consecutive year, but its stockpile of surplus wheat and corn has been growing steadily.

In Henan, the most populous province in China, the stockpile of grain totals 35 million tons, most of which is wheat, with its annual amount of surplus wheat totaling four to five million tons.

China, which produces 500 million tons of grain, has invested 40 billion yuan in building granaries in recent years. It also spends 10 billion yuan subsidizing granaries each year.

Ethanol-based fuel was also promoted in Brazil and the United States to help farmers.

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