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Biofuel Governance in China
Legislation as the Starting Point
CAI Shouqiu; WANG Huanhuan
RIEL, Wuhan University
ahwanghuanhuan@163.com
CONTENTS
2
4
31
33
Biofuel governance in ChinaBiofuel governance in China
Existing biofuel law and policy Existing biofuel law and policy
Overview of Biofuel in China Overview of Biofuel in China
Biofuel legislation in the future Biofuel legislation in the future
OVERVIEW OF BIOFUEL IN CHINA
Energysecurity
Rural development
Environmental protection
BiofuelBiofuel
Why should Chinadevelop biofuel?
OVERVIEW OF BIOFUEL IN CHINA
Semi-industrialized production
Experimental production for transportation
Ethanol for industrial use
Ethanol for military use
2001 onward
1990s
1980s
1930s
OVERVIEW OF BIOFUEL IN CHINA
A historical look at China’s fuel ethanol production
2003 2004 2005 2006 2007 2008 20090
2
4
6
8
10
12
14
16
18x 10
5
year
outp
ut
OVERVIEW OF BIOFUEL IN CHINA
Current fuel ethanol production, 2008
China Resources Alcohol Co./ Heilongjiang/corn and rice/ 180,000 per year
Jilin Fuel Ethanol Co./ Jilin/corn / 470,000 per year
Guangxi COFCO Bioenergy Co./ Guangxi/ Cassava / 120,000 per year
Tian Guan Fuel-Ethanol Co./ Henan/Wheat/ 410,000 per year
BBCA Biochemical Co./ Anhui/ corn/ 400,000 per year
OVERVIEW OF BIOFUEL IN CHINA
20022002 20042004 20062006
Fuel ethanol distribution
five cities of Henan and Heilongjiang province
Whole Heilongjiang, Jilin, Liaoning, Henan and Anhui provinces and 27 cities of Hebei, Shandong, Jiangsu and Hubei
Guangxi
province
joined in
OVERVIEW OF BIOFUEL IN CHINA
Biodiesel production In earlier stage than fuel ethanol Small scale biodiesel plants only operate a few months out of a year waste oil is main feedstock Estimated output in 250,000 this year
Biodiesel distribution No national blend initiation Chongqing has pioneered to blend biodiesel in municipal
transportation this year
OVERVIEW OF BIOFUEL IN CHINA
Three demonstration biodiesel plants under construction:
- Nanchong Refinery Biochemistry Plant of CNPC/ 60,000 tons
- Guizhou Branch Company of CPC/ 50,000 tons - Hainan Branch Company of CNOOC / 60,000 tons
A stride into industrialized biodiesel production?
OVERVIEW OF BIOFUEL IN CHINA
2010 2 million tons of non-grain
based fuel ethanol 0.2 million tons of biodiesel
2020 10 million tons of fuel
ethanol 10 million tons of diesel
2010 Will not be achieved
Will be achieved
2020 ?
?
BIOFUEL GOVERNANCE IN CHINA
The term ‘biofuel governance’ used here refers to the rules, behavior and dynamic process that affect the way how actors including government, industries, market and social society participate and influence the production, trade, distribution, as well as use of biofuel at all levels.
others
market
Government
industry
ACTORS
BIOFUEL GOVERNANCE IN CHINA
Government (central) energy administration department
• National Development and Reform Commission (NDRC) • Nation Energy Administration (NEA)
relevant administration department • Ministry of Agriculture• National Forestry Bureau• Ministry of Environmental Protection• Ministry of Land and Resources• Ministry of Water Resources• Ministry of Finance• State Administration of Taxation
BIOFUEL GOVERNANCE IN CHINA
NDRC and NEA
MOA
NFB MOEP MOLR,
MOWR MOF, NBOT
draft or promulgate most of the policies about biofuel industry
and become more deliberate in biofuel development
Over-enthusiasm to the development of biofuel
Similar to MOA Remains slient No action on land use and water
resource management yet Relatively functional role
BIOFUEL GOVERNANCE IN CHINA
Market
Strict market access
Government-driven price
Defective upstream market
BIOFUEL GOVERNANCE IN CHINA
Industry
Fuel ethanol
• State-owed large-scale companies
Biodiesel
• Private producer more difficult situation
BIOFUEL GOVERNANCE IN CHINA
Others
Insufficient investments and financial assistance from international organization, foreign and other private sectors
Limited participation from NGOs, scholars and citizens
BIOFUEL GOVERNANCE IN CHINA
DEFECTS
1. Unclear directions for biofuel development
• conversions from grain based biofuel to non-grain based biofuel
• first-generation to second-generation biofuel
BIOFUEL GOVERNANCE IN CHINA
2. Negative impacts to the environment are ignored
• biodiversity loss• deforestation• water shortage• soil degradation• increased fertilizer and pesticide usage• air and water pollutions
BIOFUEL GOVERNANCE IN CHINA
3.Unilateral recognition of biofuel’s impact on agriculture
• Conflicts with increase of non-agricultural sectors as well as the declining resources in terms of agricultural labor, arable land and water resources in China now
• Land use change • production structure to be converted • Additional environmental degradation
BIOFUEL GOVERNANCE IN CHINA
4. Limited participation in biofuel governance
For a long time, the enthusiasm of participant in biofuel government is oppressed because of lacked platform.
BIOFUEL GOVERNANCE IN CHINA
How do the defects come out?
The root of the defects underlined above is the absence of complete biofuel legal system. Biofuel have a large range of implications to agriculture, food safety, environmental protection, energy security to name a few. A large number of participants and public or private interests are involved. The backwards can not be overcome without diverse regulatory tools and strong legal liability.
EXISTING BIOFUEL LAW & POLICY
Law Renewable Energy Law of the P. R. China, 2005
• Article 2: “bioenergy except utilization of straw, firewood, excrement etc. through direct burning in low-efficiency stove is regulated by the law. ”
• Article 16: “the state encourages clean and efficient exploitation of biofuel and the development of energy plants. Also, the State encourages production and utilization of biological liquid fuel. Petroleum sales enterprises shall, in compliance with the regulations of energy administration department under the State Council or people’s governments at the provincial level, include biological liquid fuel that conforms to State standards in their fuel-selling system. ”
• Article 31: liability provision
EXISTING BIOFUEL LAW & POLICY
Regulation and other legal rules Directory List for Renewable Energy Industry, 2005; Notice concerning Taxation Policy to Fuel Ethanol Licensed
Producer, 2005; Rules for Financial Assistance on Bioenergy and
Biochemistry Development, 2006; Interim Measure for Administrating Renewable Energy
Development Fund , 2006; Interim Measure for Subsidy to Biomass Base of Bioenergy
and Biochemistry, 2007; Interim Measure for Administrating Encouragement Fund for
Non-grain Bioenergy and Biofuel, 2007; Policies for Products Generated from Comprehensive
Utilization of Resources, 2008.
EXISTING BIOFUEL LAW & POLICY
Policy support for biofuel in China
Subsidy to biofuel producer Tax reduction Specific area payment for crops used for energy
plants 13 percent export VAT rebate to ethanol trade
EXISTING BIOFUEL LAW & POLICY
Plan 11th Five-year Plan for National Economic and Social Development of
the P. R. China, 2006; the 11th Five-year Plan for Energy Development, 2007; Long and Mid-term Planning for Renewable Energy, 2007; 11th Five-year Plan for Renewable Energy, 2008;
The 10th Five-year Plan Specifically for Fuel Ethanol and Ethanol Blended Gasoline for Automobiles, 2004;
11th Five-year Plan Specifically for Fuel Ethanol and Ethanol Blended Gasoline for Automobiles as well as Development Policy for Fuel Ethanol Industry, 2006
11th Plan for Bio-industry; Plan for Agricultural Bioenergy; Whitepaper on China’s Energy Situation and Policy; China’s National Program on Climate Change
EXISTING BIOFUEL LAW & POLICY
Deficiencies of existing biofuel law and policy
Guideline for biofuel development hasn’t been clarified There is a lack of effective legal rules to regulate biofuel
governance. Liability provision is insufficient to ensure full implementation
of law and policies.
HOW TO IMPROVE?
Legal hierarchy of new biofuel legislation
comprehensive legislation specifically on biofuel is better to be enacted by NDRC and relevant administration departments in the form of joint departmental rules and becomes the third layer of national energy legal system which is under construction.
HOW TO IMPROVE?
Guideline energy security sustainable development
Basic principles principle of deliberation principle of diversification Enhanced policy supports Life-cycle assessment tools
HOW TO IMPROVE?
Institutional structure
A cross-sector approach is needed in biofuel governance. A Coordination Commission or Board on Biofuel as a special branch of National Energy Commission could be established in which all concerned ministries and outside organizations, industry groups and NGOs are represented.
HOW TO IMPROVE?
Legal regime related to biofuel governance
Biofuel planning Biofuel standards Environmental impact assessment Land investigation and land use change prohibition regulated purchase, blend and retail
Thanks for your attention!
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