Thread Content
Energy is a fundamental requirement for human survival and development. With the continuous rapid development of the socio-economy, oil – the representative of non-renewable energy that drives social progress – has become the \"blood\" upon which modern civilization depends. However, the resources on Earth are finite and are gradually running out. According to multiple assessments by the United Nations Energy Agency, Earth’s oil reserves will be depleted within about fifty years, ending large-scale industrial extraction. The time available in our country will be even shorter; experts estimate it to be only about thirty years. Energy shortages are a major problem facing modern society. Without energy, human life would be impossible, and modern civilization could not continue. For decades, people have made unremitting efforts to seek alternative energy sources. Through extensive research, comparison, and experimentation, efforts are made to find renewable energy sources that can be easily produced and utilized. In recent years, many people have turned their attention back to the traditional product ethanol. In the 21st century, fuel ethanol will become one of the major emerging energy sources, gradually developing into a highlight among new energy options and demonstrating the infinite potential of an industry on the rise. I. Basic understanding of ethanol’s role as a new foundational industry in this century 1. Ethanol is a rare substance in nature that is permanently renewable, capable of operating within an infinite closed-loop cycle, and is a clean material. Ethanol, like plants (including crops), is a form of solar energy. Plants in nature produce the basic raw materials for ethanol through photosynthesis; during the production and consumption of ethanol, these materials are again broken down into those used in plant photosynthesis, in a cycle that repeats endlessly. In academic terms, the main product of plant photosynthesis is a hexose sugar, which is the basic molecule of cellulose and starch. During the production of ethanol, two of the carbon atoms in the hexose sugar are converted into carbon dioxide, while the four remaining carbon atoms are converted into ethanol. After being used as an energy source, ethanol is converted back into four molecules of carbon dioxide and returned to nature. Through photosynthesis, these six carbon dioxide molecules are recombined to form one six-carbon sugar, thus circulating in nature in a perpetual loop. This scientific and miraculous property determines ethanol’s renewable, abundant, and pollution-free characteristics. On the other hand, ethanol is also a substance with highly versatile functions. It is both hygienic and safe, and is widely used in the food, beverage, pharmaceutical, and fragrance industries, permeating all aspects of people’s lives. It is also an excellent basic chemical raw material, with wide and irreplaceable applications in fields ranging from fine chemicals and organic chemistry to petrochemicals. At the same time, it is also a rare energy source that is clean, convenient, and safe. All these characteristics make ethanol a natural focus of research on renewable resources worldwide today. 2. The three future market directions for ethanol. Ethanol is both a basic raw material in the chemical industry and a new energy source. Although it is now widely used, it still operates within the scope of traditional market concepts. In the future, the market direction of ethanol as an industrial commodity will mainly manifest in three areas: first, as a fuel for vehicles, primarily in the form of ethanol-blended gasoline and ethanol-blended diesel. This is what we traditionally refer to as the fuel ethanol market; it is also a market with relatively lower capacity in the recent period (over the past 10 years), as compared to future capacities (around 10 million tons per year in our country). The United States **has established a plan to vigorously develop fuel ethanol; by 2011, it aims to increase the use of fuel ethanol in gasoline (excluding diesel) from 1.5 billion gallons per year (about 4.5 million tons) to at least 4.4 billion gallons per year (about 13.6 million tons) ； Second, as a fuel for fuel cells. It has very broad application prospects in the field of portable power sources such as low-temperature fuel cells used in mobile phones, laptops, and next-generation fuel cell vehicles; this represents the medium-term market for ethanol (over the next 10–20 years). Ethanol has currently been identified as a safe, convenient, and relatively practical ideal fuel for fuel cells. Ethanol will account for 30–40% of the market for new battery fuels. The market capacity is at least 5 times that of the recent market (mainly ethanol derived from fiber raw materials) ； Third, ethanol will become the basic raw material supporting the modern petrochemical industry based on ethylene. Over the next twenty years or so, due to the increasing scarcity of oil resources and the large-scale industrialization of ethanol production from fibrous raw materials, whose costs have become competitive compared to those of petroleum-based raw materials, ethanol will naturally enter the realm of basic petrochemical raw materials. In our country, the market capacity is at least 20 million tons per year. The technology for producing ethylene from ethanol is already mature. As oil resources become increasingly scarce and their prices rise, ethanol will gradually enter the market as a raw material for ethylene, and it is likely to eventually replace it. If we were to use a vivid and exaggerated analogy, the image of international oil tycoons in the second half of the 20th century will be replaced, by the middle of the 21st century, by ethanol tycoons facing an \"alcohol test\". 3. New technologies will break through the traditional concept of using ethanol in food production. What is even more noteworthy is that the application of a large number of modern technologies and genetic engineering techniques in research related to ethanol production has led to breakthroughs in this field. Yeasts capable of rapidly converting xylose have been developed, which has brought about a significant improvement in addressing the issue of resource scarcity associated with producing ethanol using only food crops. The production of ethanol from fibrous materials is becoming a reality, and its economic viability is also gradually becoming apparent. It is estimated that another 10 years of effort will be needed before the industrial-scale production of ethanol from fibers is fully established. Fiber is the most abundant renewable resource on Earth; it is truly inexhaustible. It is estimated that if only half of the agricultural straw resources in our country are converted into ethanol each year, the amount produced will exceed 1.2 times China’s annual gasoline consumption. Only fibers used as raw materials for ethanol can meet humanity’s massive demand for liquid energy in the post-petroleum and post-oil era. Therefore, over the first three decades of the 21st century, as oil resources become increasingly scarce and revolutionary advances are made in ethanol production technology, ethanol will emerge as a new foundational industry as well as a new energy source. This is an irreversible trend that is fully in line with the overall trends of \"sustainable development\" and a \"green economy\" pursued by the international community. II. Production of Fuel Ethanol and **Food Security 1. Establishing a new concept of food security in the new circumstances At present, the food problems facing China are no longer the traditional supply shortages that often occur due to low levels of productivity. The current food problem in China is that, on the one hand, the variety structure and quality of food supply fail to meet the changing market demands, resulting in a situation where both surpluses and shortages exist in the market ； On the other hand, there is a periodic surplus resulting from a qualitative improvement in agricultural productivity, coupled with falling grain prices due to the lack of appropriate channels for transforming this surplus, leading to the problem of low grain prices harming farmers. This is the main contradiction facing China’s grain production as well as its overall agricultural production, and it is also the core issue of food security under the new circumstances. Since the 1990s, the total supply of grain in our country has followed a clear upward-and-down trend of \"high – low – high,\" which has led to fluctuations in grain prices of \"too low – sharp rise – too low.\" It should be clear that both an excess of food that is not utilized and a shortage of food supply are factors that contribute to insecurity. Due to the long-term problem of food shortages in our country’s history, the entire population is acutely aware of the severe threat posed by food shortages. Over time, this has given rise to a traditional conceptual framework of food security that is centered around the issue of food shortages. On the contrary, regarding the other aspect of food security, the insecurity caused by periodic surpluses of food is rarely mentioned or studied in depth. Grain production that lacks effective processing and conversion capabilities, as well as the necessary direction for such conversion, is also unsafe. To put it correctly, ensuring **food security requires not only effectively protecting food production capacity so as to be able to increase total food production in the shortest possible time when needed, but also having controllable, substantial, and stable capabilities for food conversion and clear directions for such conversion. This enables excess food to be quickly utilized while agricultural productivity continues to improve steadily – which is particularly important in our country – thereby supporting farmers in carrying out expanded reproduction and creating a virtuous cycle of increased production, consumption, and further stimulation of reproduction. In other words, with a qualitative improvement in agricultural productivity, corresponding processing and transformation capabilities must be in place to support and ensure it, so as to truly guarantee food security. On this basis, a flexible market mechanism is gradually established to make full use of both domestic and foreign resources as well as both domestic and international markets in order to regulate the balance between supply and demand of grain, thereby truly ensuring food security. Looking at today’s developed agricultural countries, they all follow this path. In major agricultural countries such as the United States and Europe, the capacity for processing and transforming food accounts for 60-70% of their food production capacity, while in China it is currently only around 20%. Establishing such a comprehensive and accurate concept of food security is extremely important at the current stage we are in, as it can provide a foundation for expanding the field of food processing and transformation. As a vehicle for promoting the industrialization of agriculture, the fuel ethanol industry is one of the effective ways to address the issue of ensuring comprehensive food security. Developing the fuel ethanol industry will drive the growth of a series of related industries. It can effectively expand the avenues for converting grains, adjust the grain production structure, stimulate grain production, and gradually establish a new market for the conversion of agricultural products. This will foster a positive cycle in agricultural production, resulting in a long-term, stable, and controllable market for grain conversion. Such a market will help ensure food security, strengthen and consolidate China’s position in grain production after joining the WTO, and provide a new path toward the industrialization of agriculture. 2. The production process of fuel ethanol is both a process of converting low-quality grains and a process of producing and increasing high-quality protein. Fuel ethanol has a production advantage that is not well understood by outsiders: during its production process, only the starch in grains is utilized, while other nutrients such as proteins are concentrated, and less readily usable proteins are converted into high-quality yeast protein. In other words, the production process of fuel ethanol is the same as that used to produce high-quality, high-protein feed, representing a process of enhancing and optimizing feed protein resources. Taking the production of alcohol from traditional corn as an example, about 3 tons of corn are required to produce 1 ton of alcohol, and at the same time 1 ton of DDGS protein feed (a term referring to both soluble and insoluble dried distillers’ grains) can be produced. DDGS feed is recognized in the international market as a high-quality protein feed, with a protein content of around 30%; it is rich in amino acids, vitamins, and minerals, making it an excellent raw material for formulated feeds. It can be said that, after being digested, absorbed, and metabolized by yeast during alcoholic fermentation, the proteins in the raw materials undergo optimization and value enhancement (some ordinary proteins are converted into high-quality yeast proteins), resulting in an increased digestibility and improved nutritional value. This excellent property, little known to outsiders, is also one of the key factors enabling the large-scale comprehensive utilization and production of fuel ethanol. This is why the owners of fuel ethanol plants abroad are usually farmers or feed producers. Turning to the livestock industry, 80% of China’s livestock and poultry production comes from rural areas, where traditional, extensive farming methods are still largely used; this results in low resource utilization and uneconomical outcomes. If this directly fed grain can be processed into compound feed, it can at least increase the amount of feed by 20%. According to experts’ calculations, and based on the amount of grain required for feeding livestock, if modern feed is used to produce various types of compound feeds, it would be possible to increase pork production by 4.8–6.4 million tons (in live weight) on top of the current levels, even without shifting to large-scale farming methods. This increase in production is equivalent to saving 17–20 million tons of feed grain. On the other hand, as people’s living standards continue to rise, the consumption of meat, eggs, and milk is increasing. As a result, China’s livestock industry is bound to develop rapidly, and outdated and extensive farming methods will surely be replaced by modern, scientific approaches to livestock rearing. China’s annual feed consumption is currently around 150 million tons, and it is set to increase in the future. Considering the production characteristics of ethanol, from the perspective of social resource allocation, it is entirely possible to use macro-control and market mechanisms to first convert grain resources intended for direct use as feed into fuel ethanol, and then allow the by-product DDGS to return to the feed market. In this way, the total protein content in the feed will not only not decrease, but will instead see significant improvement and enhancement. Social resources have been effectively and comprehensively utilized, which also meets the requirements of the principles of new-type industrialization. 3. Through rational allocation of macro-resources and the co-production of ethanol and feed, it will have no negative impact on the safe production of grain. Looking at China’s recent gasoline demand, consumption levels are below 50 million tons per year. Assuming that entirely ethanol-blended gasoline (E10) is used, around 5 million tons of fuel ethanol are required per year, which in turn demands about 15 million tons of grain per year – specifically low-quality grain intended for use as feed, rather than as food for humans. In other words, 10% of the grain allocated for feed use should be set aside each year to produce 5 million tons of fuel ethanol, with an additional 5 million tons of DDGS being produced as a by-product, which can then be returned to the feed market. The nutritional value of this feed, in terms of total high-quality protein, will not decrease compared to using 15 million tons of grain; in fact, it may even increase. This approach will not affect food security, let alone the core aspect of food security, which is the availability of food for human consumption (about 280 million tons per year). At the same time, it will contribute to the modernization of the feed industry and the livestock farming sector. In this way, by gradually adjusting the structure of grain cultivation, high-quality grains are used to address the issue of food supplies, while grains specifically designed for feed and processing are developed to meet the needs of the feed and processing industries; thus, the production of feed grains and grains for processing is separated from the traditional grain production system. In line with the requirements for diversifying feed sources and optimizing their nutritional composition in the breeding industry (to increase the supply of protein-rich feeds), and taking into account ethanol production, a new feed production system has been established to ensure the rapid development of the livestock industry. At the current stage, the main raw material for fuel ethanol production is aged grain. Once the issues related to aged grain are resolved, fuel ethanol production should be based in the major grain-producing areas, serving as a means to regulate market supply and demand (by primarily utilizing low-quality grain). It should be integrated into the industrial cycle of grain production and consumption as well as feed production and consumption; this approach will only contribute to promoting and ensuring grain production and food security. At the same time, it is also possible to actively develop high-yield, high-sugar cash crops or drought- and salt-tolerant crops that can serve as alternatives to staple foods such as cassava, sweet potatoes, sugarcane, and sweet sorghum; these crops do not compete with wheat and rice for land or water resources, thereby providing more raw materials for the production of fuel ethanol. From a development perspective, as mentioned at the beginning, the issue of finding raw materials for the large-scale use of fuel ethanol will ultimately turn to fibers. By leveraging advancements in high-tech areas such as biotechnology and genetic engineering, and by selecting plants that can produce high-energy, high-yield biological resources, it is possible to utilize China’s abundant agricultural waste (such as straw) and industrial waste (with nearly 1 billion tons of agricultural and forestry waste generated each year in China, along with tens of millions of tons of industrial fiber waste). The industrialization of technologies for producing alcohol from cellulose materials – a process that will take around ten years – can provide an endless supply of renewable plant-based raw materials for fuel ethanol production. Only by using plant fiber, the largest renewable resource in nature, as a raw material for alcohol production can humanity’s sustainable development be truly achieved. III. The Proper Positioning of Fuel Ethanol 1. Fuel ethanol is an excellent additive for improving the quality of petroleum products; it is not \"oil\". Ethanol possesses many excellent physical and chemical properties. Fuel ethanol is added to gasoline in a certain proportion; it is not simply used as a substitute fuel. Such understanding and promotion are utterly wrong. Fuel ethanol is an excellent additive for improving the quality of oils, or in other words, an oxygenator. It is also a high-octane blending component for gasoline. It serves the same purpose as MTBE, which was developed in China’s petroleum industry in the late 1990s to improve the quality of petroleum products. Ethanol has twice the oxygenation effect of MTBE. There are three types of legally approved gasoline additives in the United States: MTBE (methyl tert-butyl ether), ethanol, and ETBE (ethyl tert-butyl ether). In 2002, when the U.S. Department of Energy shared its experience with the use of fuel ethanol with our country, it expressed satisfaction that our country had chosen to replace MTBE with fuel ethanol at an early stage. After taking the 20-year detour with MTBE, the United States is now turning back to using ethanol as a substitute for MTBE. The lessons from the United States can help us understand fuel ethanol more accurately. The reason why ethanol-blended gasoline can reduce exhaust pollution and improve performance lies in the oxygen contained in ethanol, which partially compensates for the insufficient oxygen supply during combustion in the engine cylinders. It also helps to address the issue of high-octane components in gasoline, achieving two benefits at once and thus allowing the physicochemical properties of ethanol to be fully utilized. With this in mind, the proper role of fuel ethanol becomes clear. Viewing ethanol merely as a type of \"fuel\" can lead us astray and **underestimate its functions and value**. 2. Ethanol gasoline is a new type of gasoline formula commonly used internationally, and it represents an upgraded version of lead-free gasoline. Having understood the above, one’s understanding of ethanol-blended gasoline becomes much more objective. In fact, although lead-free gasoline was not widely introduced in our country until 2000, and gasoline with a new formula (clean gasoline containing MTBE) was introduced in Beijing, Shanghai, and Guangzhou only in 2001, internationally, lead-free gasoline has long been replaced by gasoline with a new formula that uses MTBE and ethanol as additives. In other words, the new formula gasoline is an upgraded version of the lead-free gasoline currently in use in our country. When we promote fuel ethanol as an energy \"alternative,\" we are referring to the concept of macro-level resources; it should not be understood as simply adding ethanol to gasoline as a last resort. Gasoline with ethanol added is known internationally as \"oxygenated gasoline\" or \"oxyfuel gasoline\". Depending on whether MTBE and ethanol are used alone or in combination, there are a range of flexible formulations, which is why it is also referred to as gasoline with new formulations. By adding 10% ethanol to gasoline, the oxygen content of the fuel can reach 3.5%, and its octane rating (the rating system used for gasoline in our country) can increase by nearly 3 units. Additionally, the aromatic content of the fuel is reduced, which improves its combustion properties, performance, and environmental friendliness. Only by understanding the precise positioning of ethanol-blended gasoline can it be properly promoted to consumers. 3. Strategies for promoting ethanol-blended gasoline In the previous phase, the promotion in the pilot areas for fuel ethanol focused on three aspects: **practical benefits, environmental protection, energy conservation, and the conversion of agricultural products – all of which are important considerations. However, it is too distant from ordinary people and consumers; content that is easier for the general public, especially consumers (drivers), to understand should be added. We can take a different approach and start from the following aspects. First of all, it should be clear that ethanol gasoline is an upgraded version of lead-free gasoline, and it is an oxygen-enriched gasoline. It is necessary to dispel consumers’ misconceptions that ethanol-blended gasoline is inferior product or a substitute. When we first submitted the project, it was presented under the names of oxygen-enriched gasoline and gasoline oxygenators; this approach is in line with China’s national conditions. Especially among drivers, who mostly have only a middle school education level, everyone has the basic knowledge that oxygenation aids combustion, so there is no need for further explanation – they understand and recognize its advantages. In developed countries abroad, **most adults have received a higher education, and thus most of them have a basic understanding of the fact that ethanol contains oxygen and helps with combustion.** Therefore, in our country, referring to it directly as oxygen-enhancing gasoline will result in a higher level of acceptance and understanding, leading to better outcomes. **The standard name can also be changed to “ethanol-enriched gasoline for vehicles,” abbreviated as “oxygen-enhanced gasoline,” and the standard should include a legal requirement stipulating that only ethanol may be used as an oxygen enhancer. This ensures smooth coordination among all parties, facilitating use and promotion. Furthermore, the main source of pollution in urban air at present is vehicle exhaust. Urban residents are all affected by it, and there is a need to raise public awareness of self-protection. On the one hand, there is **emphasis, legislative frameworks, and direct investment, along with governance at the macro level**. On the other hand, those who cause pollution (individuals or legal entities) must also fulfill their social responsibilities. According to current regulations, those who cause pollution are responsible for cleaning it up; those who own cars ought to take responsibility for addressing this pollution, and it’s not a matter of willingness. Using ethanol-blended gasoline is the most effective way to reduce pollution, benefiting both individuals and society – it’s simple and effective, so why not do it? Thirdly, there is a strong push to promote ethanol-blended gasoline; most of these are countries with agricultural resources, and they use it as an economic policy to support their large-scale agricultural production. We can, in a very practical manner, take into account the current level of emphasis placed on the issues related to agriculture, rural areas, and farmers, as well as the overall society’s attention to these issues. We can also draw on a slogan that was very popular at that time in Brazil and the United States: \"For our farmer brothers, please use ethanol-blended gasoline!\" ”It is both objective and practical, while also reflecting familial affection and concern for farmers; it not only promotes policies and clarifies demands but also possesses a human touch, thereby increasing acceptance among all segments of society. IV. The Economics of Fuel Ethanol 1. Interpreting the financial subsidies for fuel ethanol. At the current stage, the production cost of fuel ethanol is high, and its price is higher than that of gasoline. If ethanol-containing fuels are to be sold in the market at the same price as pure gasoline, **financial subsidies or tax incentives for ethanol production are necessary; however, this does not mean that the economic viability of ethanol production is poor. Firstly, **subsidies for fuel ethanol are a ‘win-win’ measure that serves as a form of regulation based on the principle of giving first before expecting anything in return.** Fuel ethanol represents an untapped industry in our country. In order to establish a stable and controllable approach to the conversion of grain into useful products, it is necessary to support this industry initially, so as to stabilize grain prices, boost grain production and increase farmers’ incomes. At the same time, this will create numerous job opportunities, stimulate domestic demand and related distribution activities, ultimately generating benefits for **the finance sector**. Based on China’s annual production of 4 million tons of fuel ethanol, this can drive direct consumption worth over 16 billion yuan and create approximately 500,000 jobs. It can generate income in various areas such as production, distribution, and employment. Due to the complexity of the situation, we are unable to carry out calculations, but we can take a look at the information provided to us by officials from the U.S. Treasury Department*: The United States provides strong policy support by offering subsidies of 54 cents per gallon (equivalent to 1,488 yuan per ton) for the production of fuel ethanol, in order to promote the use of ethanol-based gasoline. Taking 1997 as an example, the United States produced nearly 5 million tons of fuel ethanol throughout that year; over 16 million tons of grain were used or converted for this purpose, and it created more than 200,000 jobs. After accounting for the tax incentives provided that year, federal taxes increased by $3.6 billion. Furthermore, **the financial subsidies provided for the production of fuel ethanol should not be regarded as additional subsidies within fiscal expenditures; they represent a legitimate alternative and replacement for the grain export subsidies that China used before joining the WTO. Before joining the WTO, to encourage exports, **direct subsidies were provided for grain exports in order to stimulate grain production and exports. After joining the WTO, WTO rules stipulate that food-producing countries must not provide subsidies for food exports, and our country has also made a commitment in this regard. Following the practices of developed Western countries, by providing subsidies to food processing enterprises, it is possible to legally bypass this rule and achieve the same effect as the original subsidy policies. Taking the original corn exports as an example, for every ton of corn exported, there is a direct financial subsidy of 386 yuan, with local subsidies ranging from 30 to 50 yuan. Fuel ethanol has the same impact on food consumption and exports as regular grain. Approximately 3.5 tons of grain are needed to produce one ton of fuel ethanol. The current subsidy amount for fuel ethanol is around 1,200 yuan per ton; based on this subsidy, an additional savings of about 80 yuan per ton of grain can be achieved compared to providing direct subsidies for grain. 2. Comprehensive economic effects of fuel ethanol In addition to its own economic viability and the benefits it brings to agriculture and energy, the production of fuel ethanol also has several significant associated economic effects. On the one hand, fuel ethanol has a significant environmental benefit; as its use increases, it can help to save a great deal of money in large and medium-sized cities on efforts to control air pollution. Beijing spends over a billion yuan each year on addressing air pollution, and the main source of this pollution is vehicle exhaust. According to monitoring by environmental protection authorities, 60-70% of air pollution in Beijing is caused by vehicle exhaust. Investing in governance in other areas is labor-intensive, time-consuming, and costly; to address exhaust pollution, efforts should focus on the fuel used – only by taking such targeted actions can good results be achieved. A single measure, namely the use of ethanol-blended gasoline, can reduce exhaust pollution by one-third, with subsidies required amounting to only around 150 million yuan. On the other hand, for the development of the petrochemical industry, the high demand for fuel ethanol is highly advantageous. The improvement in the quality of gasoline in our country, as well as the development of petrochemical products (synthetic fibers), are currently constrained by the high-octane components in oil. Improving the quality of petroleum products requires high-octane components such as reformed oil, and the development of the chemical and textile industries (such as polyester fibers and benzene-based chemicals) also relies on high-octane components. In oil, the amount of high-octane components is fixed (usually 6% of the oil), and both parties are actually competing for this limited resource. Since the benefits of using it in the petrochemical and textile industries are much greater than those of using it in gasoline, high-octane component materials must be imported annually to meet demand (naphtha, around 2 million tons per year, with a price that is 1.5 times that of oil). MTBE, which the petrochemical industry plans to develop in the future, is also introduced to address the shortage of high-octane components for gasoline. We have learned from the lessons of the United States and have established an industrial policy that prohibits the further development of MTBE; therefore, developing ethanol is the best option. We can develop this by focusing solely on the amount of high-octane components required to improve the quality of gasoline nationwide, and that amount is quite large. For example, by referring to some current formulas used in the United States, 7.7% ethanol can be added to gasoline, or a mixture of 5.7% ethanol and 5% MTBE can be used (both of these are part of new formula gasoline), with an annual demand of at least 2 million tons. It not only addressed the shortage of high-octane components but also saved a significant amount of foreign exchange spent on imports. 3. The current scope for regulating the pricing of fuel ethanol Finally, it should be noted that the pricing of fuel ethanol in China does not reflect its true value, distorting its otherwise better economic prospects. Our current pricing for fuel ethanol is based on the reference price of No. 90 gasoline, which is a viable approach during the promotion phase to motivate the petroleum industry. But in the long run, it still needs to be aligned with international standards. Internationally, fuel ethanol is **mostly priced as an additive, just like MTBE. The current average ex-tax wholesale prices in the United States for gasoline, MTBE, and ethanol are approximately 200 dollars per ton, 280 dollars per ton, and 480 dollars per ton (including a subsidy of 160 dollars, resulting in a price of around 320 dollars after that subsidy is deducted). 59 cities in the United States publish this comparison rate on a daily basis). In other words, gasoline price < MTBE price < ethanol price. The principle behind this pricing is very clear. In the past few years, China’s petrochemical industry has also developed some MTBE production; the selling price of MTBE was around 4,000 yuan per ton. The current price of fuel ethanol is about 2,800 yuan per ton, and it is sold at the same price as gasoline, which means it is 1,200 yuan per ton cheaper than MTBE. This price is far from what it should be, leaving considerable room for development in the future of the fuel ethanol industry.