Nov 6, 2008

China ethanol maker gets approval for cassava plant

Cleantech Group - San Jose,CA,USA

November 4, 2008

Hainan Yedao and partners have invested $51.5 million in facility that is expected to produce 33 million gallons a year. Hainan, China-based Hainan Yedao Group (SHA:600238) said it has received approval from experts who inspected its new 100,000-ton (33 million U.S. gallon) ethanol plant in Haikou, in the southern islands of China.

Hainan Yedao and partners have invested 350 million RMB ($51.5 million USD) in the plant, which plans to produce the fuel using cassava, a woody shrub that grows in the subtropical region of southern China.

Cassava is China’s fifth-largest crop yield after rice, sweet potato, sugar cane, and maize. The Guangxi region accounts for 70 percent of the country’s yield, averaging 7 million tons a year.

Hainan Yedao is a liquor and healthcare product maker that announced plans in July to build ethanol fuel projects jointly with a state-owned petrochemical company.

In addition to ethanol, the Haikou plant is expected to produce 20,000 tons of carbon dioxide a year.

The company has leased 4,498 hectares of land in Laos to plant cassava for the facility.

China is the third largest ethanol producer in the world, behind the U.S. and Brazil, according to (see Coskata enters China ethanol market). Ten of 22 provinces have mandated the use of ethanol-blended gasoline in cars.

But Beijing recently banned the use of grains in fuel ethanol because of concerns about the impact on the food supply (see China considering banning corn ethanol).

The first fuel ethanol plant based on non-grain feedstock in China opened in December. That plant, also China’s first cassava-powered ethanol plant, is located in Beihai, Guangxi.

The facility, operated by a subsidiary of Beijing-based China Oil and Food Corporation (COFCO), is expected to produce 200,000 tons of ethanol and 50,000 tons of cellulosic ethanol annually from 1.5 million tons of cassava.

China's Beihai Gofar Marine Biological Industry (SHA:600538) has also announced plans for a 100,000 ton-per-year cassava-based ethanol plant in the Guangxi region.

March 10, 2008

Singapore-based China Agro-Technology (OTC: CAGTF) announced today that it signed a memorandum of understanding with the government of Beihai to build a biodiesel refinery in the southern China city.

China Agro, a forestry company, said it expects to invest up to $200 million over the next four years to construct the plant, which it said would produce 2 million metric tons of biodiesel annually at full capacity.

"Biodiesel has the highest demand of any commodity in China. To meet the 2020 B10 Kyoto Protocol requirement, China needs 12,400,000 tons of biodiesel in 2008," said Harry He, founder and chairman of China Agro.

"However in 2007, the supply in China was less than 1 million tons. Therefore, the product from this biodiesel plant will be a very important part of China's effort to meet the requirement."

China Agro estimated that beginning in the first quarter of 2009 it could produce a minimum of 80,000 to 100,000 metric tons and yield a net profit of $30 million to $40 million.

The company also said its advanced leaf growing technology, coupled with a suitable land environment, would make it an essential supplier of Jatropha crude oil.

"More importantly, however, by being able to produce our own refined biodiesel at the Beihai facility, CAT also will be in a strategically important position in the supply of biofuel," said He.

"We are currently forming our team of professionals and consultants to execute the plan."

China Agro said the new refinery should take six months to complete.

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