The biodiesel industry still needs support to get off the ground

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The biodiesel industry still needs support to get off the ground. 2009-3-27 The development of China’s biodiesel industry is in its infancy. For an industry that can both alleviate pressure on energy demand and promote environmental protection, how should it achieve healthy development in the future? To address this issue, a reporter recently interviewed Shao Maosheng, honorary president of the Jiangsu Petrochemical Industry Association. Shao Maosheng said that due to the excellent properties of biodiesel, **only by taking into account the need to increase the use of new energy sources, address urban pollution, and solve issues related to agriculture, rural areas, and farmers can we achieve better results with less effort. It is understood that Jiangsu Province has attached great importance to the development of biodiesel; currently, the 6 companies engaged in biodiesel research are all private or foreign-funded enterprises with considerable financial strength. Its business strategy is to secure raw materials, determine the appropriate scale of production, carry out in-depth processing, and achieve comprehensive utilization; it relies on advanced technology and high-value-added products to survive and develop. However, judging from the development of the biodiesel industry over the past few years, without **policy support, companies engaged in biodiesel production cannot survive. Shao Maosheng believes that **to develop renewable energy, investment may not be necessary, but policies are required. Shao Maosheng said that 1.2 billion yuan has been invested in the development of the biodiesel industry in Jiangsu Province, with a payback period of 15 to 20 years. Since the prices of petroleum diesel in our country are not truly aligned with international levels, biodiesel usually costs 1,000 yuan more (in RMB terms) than petroleum diesel in the international market. Therefore, Shao Maosheng believes that in order to address China’s long-term shortage of diesel and the problems related to urban environmental protection, **it is necessary to implement preferential policies as soon as possible to encourage and enable the biodiesel plants that have already been built to acquire acidified oil, waste cooking oil, and palm oil residues in order to produce more biodiesel. This approach is more in line with the principles of sustainable development than investing huge amounts of money in exploring for oil and then dealing with the resulting pollution. Shao Maosheng has five suggestions: First, the source of raw materials is crucial for producing biodiesel; **companies should be encouraged to work together with agricultural and rural areas to develop barren mountains and tidal flats without competing with humans for food or oil, and to plant oil-rich plants through ecological forestry in order to create bases for biodiesel production.** Subsidized loans and tax exemptions should be provided for this purpose. Secondly, **legislation should be enacted as soon as possible regarding the recycling of used cooking oil in the food service industry; similar to what is done abroad, this process should be under the oversight of environmental protection agencies, with the oil being sent to biodiesel manufacturers, so as to prevent unscrupulous vendors from using it to produce blended oils that could harm consumers’ health** ； Until a unified buy-back system is established, the acidified oil and gutter oil purchased by biodiesel producers for use in biodiesel production should be considered as an energy contribution to **, and they should be exempt from taxes (including consumption tax and value-added tax) as well as receive sales subsidies. Third, to encourage companies to produce biodiesel, whether they are private enterprises or foreign-funded firms, zero tariffs should be applied to the import of biodiesel raw materials such as palm oil, just as is the case abroad. Fourth, in order to encourage foreign companies to invest in the country and set up biodiesel factories using their own raw materials, it is recommended that **the establishment of biodiesel factories by foreign investors in our country be included among the projects that are encouraged (provided that they bring their own raw materials, and the products sold domestically are exempt from import tariffs, including those for imported biodiesel equipment). Fifth, it is necessary to establish standards for blending biodiesel at levels of BD5 and BD10 as soon as possible, and to encourage biodiesel producers to work together with Sinopec and CNPC’s gas stations to develop new markets for supplying this fuel. Other industry experts have analyzed and pointed out that **while providing policy support for the biodiesel industry, a production license system should also be implemented. That is, companies that produce biodiesel must have internationally advanced process technology and equipment; their construction plans must be reviewed by experts and undergo safety assessments, as well as environmental impact assessments that require **approval ； Companies developing biodiesel need to have strong financial capabilities, a sufficient amount of oil, engineering and technical personnel in biochemistry, as well as a solid foundation in corporate management. Experts believe that only by strictly regulating the entry requirements for biodiesel production can the healthy development of China’s biodiesel industry be ensured.