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This post was last edited by qinweijun on 2012-6-6 15:56. The biodiesel industry is an emerging high-tech industry. Generally speaking, biodiesel is relatively easy to produce, but it is more difficult to meet strict fuel quality standards and remain competitive in terms of price. Over the years, institutions such as the University of Science and Technology of China, the Research Institute of Petrochemical Sciences, Northeast Forestry University, and East China University of Science and Technology have carried out research and development on biodiesel technology as well as small-scale industrial experiments, but industrialization has not been achieved. The private enterprise Hainan Zhenghe Bioenergy Co., Ltd. established a biodiesel pilot plant with an annual production capacity of nearly 10,000 tons in September 2001. The biodiesel produced was tested by the Petroleum and Chemical Science Research Institute as well as the Environmental Science Research Institute, and its key parameters met the American biodiesel standards; moreover, its price was competitive in the market. This plant marked the beginning of the industrialization of biodiesel in China. China’s 10th Five-Year Development Plan explicitly calls for the development of various petroleum alternatives, and identifies the development of bio-liquid fuels as a direction for the growth of emerging industries. Experts believe that the development of the biodiesel industry in our country over the next decade can be divided into three phases: in the short term, existing various types of waste oils and oil-containing biological resources will be used as raw materials. By rough estimation, if 1/3 of China’s existing raw material resources (excluding expired and unsuitable soybeans in stock) could be utilized, the industry scale could reach 2 million tons. During this phase, due to the scattered sources of raw materials, small and medium-sized factories with an annual production capacity of less than 100,000 tons should be established to reduce transportation costs. Given the small scale of production and large number of units at this stage, there are certain operational risks, so private and foreign-funded enterprises should play a major role. At the same time, large-scale cultivation of agricultural and forestry crops used as raw materials should be promoted to prepare for the next stage of development, and technologies should be continuously improved to enhance quality and reduce costs. Hainan Zhenghe Bioenergy Company has adopted the \"**ten enterprises, ten farmers, ten banks, and ten technologies\" model, which holds certain reference value. **Farmers are encouraged to grow oilseeds; companies enter into contracts with farmers for the purchase of raw materials, banks provide loans to farmers for growing oilseeds, and both companies and farmers offer guarantees to the banks. **Companies also provide technical support to farmers in the planting and harvesting of oilseeds, while research institutions offer technical support to companies, thereby benefiting all parties involved. In the intermediate phase, large-scale cultivated agricultural and forestry crops should be used as raw materials. China currently has 900 million mu of forested land; if 5% of this area, or about 50 million mu, is used for planting oil-bearing trees, and each mu yields 40 kilograms of biodiesel, then the production volume could reach 2 million tons ； China has 1.9 billion mu of arable land; if 1%, or about 20 million mu, is used to grow crops with high oil yields, and each mu can produce 50 kilograms of biodiesel, then the production volume would be 10 million tons. Taking all factors into account, even on a conservative estimate, the production scale is in the range of several million tons. At this stage, a model combining manufacturing enterprises with raw material growers should be adopted, and large factories with an annual production capacity of over 100,000 tons can be established. At the same time, accelerate the research and development as well as industrialization of high-oil-yield raw material crops. In the long term, high-yield oil-producing raw material crops grown on a large scale should be used as the raw materials. The United States has used modern biotechnology to develop microalgae for marine engineering; under laboratory conditions, their lipid content exceeds 60%, while in outdoor cultivation it is over 40%, yielding 1 to 2.5 tons of diesel per mu per year. If engineered algae are cultivated on a large scale in China’s vast coastal and inland waters, the production volume could exceed tens of millions of tons. At this stage, large and extra-large factories with an annual production capacity of 500,000 units or even over one million units can be established. China’s biodiesel industry has just emerged, but it holds great potential for development. As long as efforts are made to create a favorable environment for its growth, and the industrial and scientific communities work hard, it is entirely possible to establish a biodiesel industry that can make significant contributions to the country’s economic and social development within about 10 years.