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Author: VKB Bioenergy Consulting Ltd. The biodiesel industry is one that currently enjoys support at various levels, including policy and economic aspects in China, and its growth momentum is evident. Our company’s experience in Europe: About 5 years ago, there were indeed many businesses that, due to a lack of understanding of the industry’s future prospects, or because of financial constraints or concerns regarding investment risks, we managed to implement several similar projects, particularly in Eastern Europe where economic conditions were less developed. In recent years, with rising oil prices, the emergence of successful cases, and the implementation of environmental regulations such as the Kyoto Protocol, such inquiries have ceased. Each of these regions has offered various forms of incentives, such as tax reductions, tax deferrals, and other financial benefits. We have some ideas that we would like to discuss with you ； 1. Industrial depth: The development of the biodiesel industry has elicited varying degrees of enthusiasm around the world, but the conditions related to its raw materials do indeed hinder many development strategies. Currently, Brazil leads in the development of bioenergy globally, thanks to its vast areas of arable land and strong governmental incentives. The United States, which also possesses large amounts of arable land, has not been able to achieve similar results, and the reason for this is ； Most oil companies are **self-interested entities; in order to protect their own oil profits, they often influence legislation through policy measures. The fact that the United States has not yet signed the Kyoto Protocol is a clear example of this. In China as well, there is a large area of arable land, and central government policies have repeatedly emphasized, in various forms, the role that biodiesel can play as an alternative energy source. Relevant supportive measures have also been introduced; please refer to the attachments. We believe that under such favorable conditions, the biodiesel industry will surely become a star industry in the 21st century, following the information technology industry. 2. Industrial structure: Biodiesel is a regional industry in Europe, with a supply chain that is limited to that region. Due to its unit cost structure… ； Raw material costs account for approximately 70%–80% in Europe; these costs are closely linked to transportation costs associated with the inbound and outbound of materials. With oil prices ranging from $20 to $40, the availability of raw materials in a given region as well as the capacity of its marketing channels also play a significant role. Therefore, most biodiesel plants start operations with a production capacity of 20,000 tons per year, with the possibility of expanding capacity over time through ongoing operations ； It relatively includes technical management, raw material planning, and distribution channels, etc. Of course, as oil prices have risen, its proportion has dropped from 80% to