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COFCO Group establishes a biomass energy base in Guangxi. COFCO Group has signed a long-term strategic cooperation framework agreement with the people’s government of the Guangxi Zhuang Autonomous Region; the group will invest between 10 billion and 12 billion yuan in Guangxi to focus on developing industries such as biomass energy. With the official commissioning in Beihai, Guangxi, of the 200,000-ton-per-year fuel ethanol production facility invested in by COFCO Group – China’s only fuel ethanol project of its kind to be put into operation to date – it signals that China’s fuel ethanol industry is entering an era based on non-grain feedstocks, and the advantages of developing such ethanol from non-grain sources are becoming increasingly evident. What kind of start is 200,000 tons? On December 22, 2007, the inauguration ceremony for Guangxi COFCO Bioenergy Co., Ltd. and the production start-up ceremony for the 200,000-ton fuel ethanol pilot project were held in Beihai City, Guangxi Autonomous Region. This project is a pilot initiative to build a facility in Guangxi for the production of 1 million tons of non-grain fuel ethanol; it serves to implement the expansion of the use of ethanol-based gasoline in vehicles and is an important part of the energy strategy. Some media reports suggest that this move means China’s development path for fuel ethanol will truly shift toward using non-grain sources. In recent years, fuel ethanol made from corn as the main raw material has seen rapid growth in the country, helping to alleviate energy shortages to some extent; however, its excessive development has also posed risks to food security. **In response to the blind expansion of corn-based ethanol production capacity in certain regions of the country, the National Development and Reform Commission issued an urgent notice at the end of 2006, ordering that the approval and registration of corn processing projects be suspended immediately, and that a comprehensive review be conducted of projects that are under construction or planned to be built. ” While calling for a halt, **it advocates for the active development of non-grain bioliquid fuels in the future. Chen Deming, former vice minister of the National Development and Reform Commission, explicitly stated that by 2020, a capacity to replace 10 million tons of oil per year should be established. Against this backdrop, the project was located in the Hepu Industrial Park in Beihai, Guangxi, covering an area of 550 mu with a total investment of 1.46 billion yuan. Construction officially began on December 24, 2006, and was carried out in two phases. The investment in the first phase of the fuel ethanol production project amounts to 760 million yuan; it will enable an annual production of 200,000 tons of fuel ethanol, 50,000 tons of fibrous feed, 29.7 million cubic meters of biogas, and 50,000 tons of carbon dioxide. It is said that once completed and put into operation, this project will bring significant economic and social benefits. It will help create a favorable environment in which cassava cultivation serves as the foundation for the coordinated and rapid development of the local economy and related industries. It will facilitate comprehensive agricultural development and the optimization of the agricultural structure, support the interests of farmers, rural areas, and agriculture, improve the investment climate, drive economic growth, and create more job opportunities. In this way, it will make new contributions to building a harmonious society, developing socialist new villages, and achieving sustainable development. To promote the development of biomass energy, Yu Xubo, Vice President of COFCO Group and Chairman of COFCO Futures, spoke at the unveiling and commissioning ceremony on behalf of COFCO Group and China Cereals and Oils, emphasizing the importance of the Guangxi project for realizing energy strategies, driving COFCO’s continued progress in the field of biomass energy, and fostering economic and social development in the Guangxi Autonomous Region and Beihai City. According to the policy, all fuel ethanol produced by COFCO’s Beihai project must be sold to CNPC or Sinopec, with these two giants handling its distribution and sale. It is reported that companies such as CNPC and BP currently have plans to build fuel ethanol plants in Guangxi, but these plans have not been approved. COFCO Group was one of the first to get involved in the development of fuel ethanol bases in Guangxi. As a reward for COFCO Group’s early entry, the Guangxi Autonomous Region has issued a directive stating that Beihai and Guigang will begin using ethanol-blended gasoline starting from mid-December last year, with this practice being gradually extended to other cities in Guangxi as well. It is understood that since February 2008, Guangxi has restricted the sale of ethanol gasoline for use in vehicles across its territory, in order to replace regular gasoline with ethanol gasoline for vehicle use. This move makes Guangxi the sixth province in China to use ethanol-blended gasoline throughout its territory, following Heilongjiang, Jilin, Liaoning, Henan, and Anhui. Ning Gaoning, chairman of COFCO Group, said that COFCO will use Guangxi as a base for its business development, focusing on sectors such as biomass energy, agricultural product processing, and real estate, while expanding its investments in the region; the priority will be given to the development of biomass energy. It is understood that the above three industries will be operated by China Cereals & Oils, China Food, and COFCO Real Estate – listed companies under various subsidiaries of COFCO.