Biomass Energy Market in China

CCM Data & Primary Intelligence

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CCM Data & Primary Intelligence Description: "With increasing importance of energy reservation, there has been a rapid development in Chinese biomass energy market in the past few years. And evidence is mounting that biomass energy industry in China will enjoy promising prospect in the long run. At present, technology bottlenecks and insufficient grain feedstock supply are two major obstacles for development of biomass energy products, including liquid biofuel, biopower generation, solid biofuel and biomass gas. Rapid economic development of China would drive the demand for energy to rise continuously. However, since fossil fuel has already been in short supply, China would vigorously promote the development of biomass energy industry instead. Besides, China boasts abundant biomass resources such as rice/wheat straw, corn cob, etc., which would further advance China’s motivation in this field. To facilitate the sustainable and sound development of biomass energy industry, Chinese government released a series of policies to set medium and long target for each biomass energy product and provide fiscal subsidy for some important products. To figure out the current situation and prospect of biomass energy and the limitations for future development in China, the report covers the information on feedstock and their production situation, marketing channels, consumption situation, and future forecast etc. Among them, the feedstock supply and current technology of each biomass energy product are especially given an insightful analysis. Besides, CCM provides you an insightful analysis on other following questions: - What is the situation of raw material supply and its influence on biomass energy production in China? - Who are key active and potential players in China's biomass energy industry? - What are the key factors affecting each Chinese biomass energy product? - What is the competition situation in Chinese biomass energy industry? - What is the trend of each Chinese biomass energy product in the near future? - How about the policies and incentive for biomass energy industry in China? - Where are the opportunities in the Chinese biomass energy industry？ Main content: No.

Content

Page

Executive summary

1

Methodology and source

2

I

Overview of biomass energy market in China

5

I-1

Position of China’s biomass energy market in the world

5

I-2

Classification and characteristics of biomass energy in China

7

I-3

Development environment of China’s biomass market

7

I-4

Overview of biomass energy development

8

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CCM Data & Primary Intelligence I-5

Overview of biomass energy utilization

9

II

Liquid biofuel market

10

II-1

Summary of China’s liquid biofuel market

10

II-2

Feedstock supply

11

II-2.1

For fuel ethanol

13

II-2.2

For biodiesel

31

II-2.3

For others

34

II-2.4

Supply discussion

35

II-3

Production situation by products

37

II-3.1

Fuel ethanol

37

II-3.2

Biodiesel

45

II-3.3

Others

49

II-4

Marketing channels of liquid biofuel in China

50

II-5

Consumption situation

51

II-6

Forecast on China’s liquid biofuel market (2010~2015)

52

III

Bio-power generation market

54

III-1

Summary of China’s bio-power market

54

III-2

Feedstock supply

54

III-2.1

Straw-fired power generation

54

III-2.2

Bio-gasification power generation

58

III-2.3

Biomass co-firing power generation

60

III-2.4

Methane power generation

60

III-2.5

Refuse incineration power generation

62

III-3

Technology

62

III-3.1

Direct-fired bio-power

62

III-3.2

Bio-gasification power generation

63

III-3.3

Biomass co-firing power generation

65

III-3.4

Refuse incineration power generation

66

III-4

Achievements

67

III-4.1

Installed capacity, on-grid generation and distribution

67

III-4.2

Market value for bio-power in China in 2008

69

III-5

Limitations for bio-power generation in China

70

III-5.1

Limitation of raw material supply

70

III-5.2

Limitation of technology and equipment

71

III-5.3

Limitation of feed-in tariff policy for biomass

72

III-6

Forecast on China’s bio-power generation market (2010~2015)

72

IV

Solid biofuel market

74

IV-1

Summary of solid biofuel market in China

74

IV-2

Feedstock availability

74

IV-3

Achievements

75

IV-4

Limitations of solid biofuel utilization in China

76

IV-4.1

Limitations in existing equipments

76

IV-4.2

Limitations in existing bio- briquetting manufacturers

77

IV-4.3

Limitations in investment and financing

77

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CCM Data & Primary Intelligence IV-5

Forecast on China’s solid biofuel market (2010~2015)

78

V

Biomass gas market

79

V-1

Summary of biomass gas market in China

79

V-2

Feedstock availability

79

V-3

Achievements

80

V-4

Limitations of China’s biomass gas market

84

V-5

Forecast on China’s biomass gas market (2010~2015)

84

VI

Policy and incentive for biomass industry in China

85

VI-1

Main policies and incentives for biomass energy

85

VI-1.1

Laws and plans for bioenergy

85

VI-1.2

Direct bioenergy policies and incentives

87

VI-2

Analysis of bioenergy policy and incentive

88

VII

Introduction to key players

92

VII-1

Company profile

92

VII-1.1

Fuel ethanol producers

92

VII-1.1.1

Henan Tianguan Group Co., Ltd.

92

…

0

VII-1.1.6

Sichuan Yangming Energy Technology CO., Ltd.

98

VII-1.2

Biodiesel producers

100

VII-1.2.1

Sichuan Gushan Group

100

…

VII-1.2.12

Shandong Linqing Xinghua Oil Co., Ltd.

109

VII-1.2.13

China Biofuel International Holding Co., Ltd.

110

0

VII-1.3

Biopower generation

111

VII-1.3.1

National Bio Energy Co., Ltd. (NBE)

111

…

VII-1.3.3

Wuhan Kaidi Electic Power Co., Ltd. (Kaidi)

114

VII-2

Competitiveness analysis

116

VII-3

Potential competitors

119

VIII

Conclusion and opportunity

121

VIII-1

Conclusion

121

VIII-1.1

Liquid biofuel

121

VIII-1.2

Biomass power generation

122

VIII-1.3

Solid biofuel

122

VIII-1.4

Biogas and biomass hydrogen

123

VIII-2

Opportunities

123

VIII-2.1

Liquid biofuel

123

VIII-2.2

Biomass distributed power generation system

123

VIII-2.3

Biomass heat supply

124

VIII-2.4

Circular economy model

124

0

Executive summary: China has a long history of shortage of fossil fuel and import of petroleum with large quantities. For example, xx million tonnes of petroleum were imported in 2009, accounting for xx% of the total Website: http://www.cnchemicals.com Tel: +86-20-3761 6606

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CCM Data & Primary Intelligence consumption. This has underlined the urgency for China to develop substitutes for fossil fuel, and abundant resources have made it possible for China to develop biomass energy products. China has released a series of policies to promote biomass energy industry development in recent years, and set long-term plans for each biomass energy products: Chinaâ&#x20AC;&#x2122;s fuel ethanol capacity will reach xx million tonnes and biodiesel capacity will reach xx million tonnes in 2020. Simultaneously, installed capacity of biopower generation will reach xxMW, and China will achieve xx billion cubic meters biogas and xx million tonnes solid biofuels by then. Chinese ambitious plan has driven fast development of biomass energy industry. Among all biomass energy products, fuel ethanol has developed best in China with strong support from the government. Since fuel ethanol only takes up less than 1% of the total oil fuel consumption, it has huge development potential. However, each product of biomass energy industry has faced bottlenecks. For instance, after government enacted regulations to restrict corn use in fuel ethanol production, future development of biomass energy industry is hampered by immature technology of second-generation fuel ethanol, limited planting area and low yield of non-grain feedstock. At present, grain feedstock including corn and wheat are major raw materials of fuel ethanol. But non-grain feedstock such as cassava, sweet potato will replace grain feedstock to be major raw materials before the commercial production of second-generation fuel ethanol. As for the raw materials of biodiesel, China is actively exploring energy crops to replace insufficient waste oil. Regarding other biomass energy products, livestock manure and straw are major raw materials for biogas and biopower generation respectively now. The current technology adopting corn, wheat and cassava producing fuel ethanol and using waste oil producing biodiesel is mature. What the institutes and researchers concern for is the immature technology of second generation biofuels. Moreover, how to reduce cost of biopower generation, solid biofuels and biogas is also a worry. Although each biomass energy product faces bottlenecks now, the future prospect of biomass energy will be bright in China after the immature technology is improved and the problem of raw materials shortage is resolved. Character of CCM' Report: The aim of this report is to provide powerful assistance to the strategy group and the management team in making correct decision as how to penetrate the ever-increasing China market and how to catch the maximum commercial opportunities. The report is formulated independently by CCMâ&#x20AC;&#x2122;s professional market researchers, based on the first-hand and primary data which are analyzed by scientific methodology, confirmed with both manufacturers/end users/traders and legal authorities, and presented in a logic way. Sample pagesďź&#x161;

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I Overview of biomass energy market in China I-1 Position of China’s biomass energy market in the world

…… Now, China is the third largest producer of fuel ethanol, but has fallen far behind other countries in development of other biomass energy products. ¾

Fuel ethanol

It is estimated that the output of fuel ethanol in China only accounted for 0000% of the world total 0000 million in 2009. Table I-1.1 Top fuel ethanol production countries in the world Country

Output (tonnes, 2009)

Raw materials

Legal standard

US

000000

E10

Brazil

000000

Sugar cane

000000

China

1,620,000

000000

Canada

000000

Germany

000000

Wheat, sugar beet

000000

French

868,000

000000

E5, E10

Source: CCM International

II-2 Feedstock supply II-2.1 For fuel ethanol ¾

Cassava

…… Compared with other raw materials, cassava is a more preferable raw material to produce alcohol. Table II-2.1.5 Economic benefit comparison of alcohols production using different raw materials in China, 2009 Item

Cassava

Sugarcane

Corn

Wheat

Sweet potato

000000

331.87

000000

7

000000

8.7

Cost of RM（USD/t）

000000

834.60

000000

Process cost（USD/t）

000000

Cost of producing alcohol（USD/t）

000000

754.06

Price of alcohol（USD/t）

000000

761.35

000000

Profit（USD/t）

182.99

000000

Price of RM（USD/t） Unit consumption（tonne）

Source: CCM International

¾

Other potential non-grain feedstock

Besides raw materials mentioned above, sugar cane, sweet grass, sweet sorghum may be choices to produce fuel ethanol as non-grain feedstock. Table II-2.1.9 General information of other potential non-grain feedstock for fuel ethanol production in China Raw material

Planting area

Unit consumption

(ha. 2008)

(t/t)

Main applications

Future prospect in fuel ethanol

Sugar cane

000000

Sweet

000000

16

000000 Sugar

sorghum

000000 slab,

brown

000000

powdered sugar and white granulated sugar

Sweet grass

N/A

000000

Basically not used

Source: CCM International

¾

Other potential energy crops

Besides jatropha curcas, yellow tree, swida wilsoniana, xanthoceras sorbifolia will be potential energy crops to produce biodiesel in the future in China. Table II-2.2.2 Other potential energy crops for biodiesel in China Raw material

Potential planting

Distribution

area (ha.) Xanthoceras

000000

Shaanxi,

Unit yield

Potential capacity

Production cycle

(tonne/ha.)

(t/a)

(year)

4.5~9.0

000000

sorbifolia Swida wilsoniana

Shanxi,

000000

Hubei, Henan Yellow tree

300,000

000000

900,000

000000

Source: CCM International

II-3 Production situation by products II-3.1 Fuel ethanol ¾

Production

With the largest output in all biofuels, China’s fuel ethanol industry witnessed fast development in past few years. By the end of 2009, the capacity of fuel ethanol is ……

Figure II-3.1.1 Output and growth rate of fuel ethanol in China, 2003-2009 1,800,000

24%

1,600,000

19%

1,400,000 14% 1,200,000 9%

1,000,000

4%

800,000 600,000

-1% 2003

2004

2005

2006

Output (tonne)

2007

2008

2009

Grow th rate

Source: CCM International

¾

Manufacturers

By the end of 2009, only seven active manufacturers are involved in fuel ethanol production in China, five of which are national designated production bases. Table II-3.1.1 Basic information of key fuel ethanol manufacturers in China, 2009 No.

Name

Abbreviation

Ownership

Raw materials

Capacity ’09 (t/a)

Output ’09 (tonne)

1

0000000

2

0000000

Jilin

Fuel

0000000

600,000

0000000

Alcohol 3

0000000

Corn

440,000

0000000

4

0000000

State-owned

0000000

180,000

5

0000000

Cassava

0000000

6

Sichuan Yangming Energy

0000000

Sweet potato

50,000

0000000

Private

0000000

1,500

-

0000000

Technology CO., Ltd. 7

0000000 Total Source: CCM International

III-2 Feedstock supply III-2.1 Straw-fired power generation The straw-fired power generation needs large quantities of straw resource, and only large-scale utilization can create obvious economic returns…… Cost analysis of collection, transport and storage of straw

Table III-2.1.6 Trend comparison of bio-power cost Item

Unit

25 MW straw-fired Before

6 MW bio-gasification

After 2006

2005

Before

After 2006

2005

Generating capacity

kW

25,000

00000

6,000

Running time

h/Y

00000

6,500

00000

%

00000

8

Electricity for sales

Million kWh/Y

146.25

00000

Biomass consumption

Kg(dry)/kWh

00000

1.25

00000

%

00000

15

00000

Raw material price

USD/t

00000

43.92

00000

Raw material consumption

t/Year

00000

5.58

00000

2.27

IURE

Moisture content

Raw material cost

Million USD/Y

Salary

USD/Y

00000

Operation cost

USD/Y

00000

1,420,205

292,826

00000

Million USD/Y

00000

2.95

USD/kWh

00000

0.0747

00000

Total cost Electricity selling price

Note: IURE, Internal use rate of electricity Source: GIEC/CCM International

IV Solid biofuel market IV-3 Achievements Table IV-3.3 Main manufacturer and index of screw extrusion machine No.

Manufacturer/Research institute

Machine type

Efficiency (kg/h)

1

00000

120~150

2

Shaanxi Wugong Light-Industry Machinery Factory

00000

3

00000

JX-11

00000

4

00000

120~140

5

Planning and Design Institute of Ministry of Agriculture

00000

6

00000

ZBJ-11

00000

Source: GIEC/CCM International

VII-2 Competitiveness analysis 他

Fuel ethanol

Large state-owned companies, such as COFCO, CNPC and Sinopec Corp., control the whole fuel ethanol industrial chain in China. COFCO has three subsidiaries for fuel ethanol production, and CNPC has two subsidiaries.

Table VII-2.1 Comparison of the 3 state-owned ethanol producers in China, 2009 Company

Subsidiary

name 00000

COFCO

Raw

Capacity â&#x20AC;&#x2122;09

material

(t/a)

Corn

00000

Current situation

Strategy for fuel ethanol

Major producer and the largest

COFCO plans to take up 60% fuel ethanol

shareholder of fuel ethanol

capacity in China by 2010, mainly using cassava from00000

Zhaodong

00000

200,000

Wholly owned by COFCO. The

COFCO 00000

only fuel ethanol producer using cassava as raw material. 00000

CNPC

00000

600,000

00000

CNPC is the largest shareholder. It

00000

Henan

commercial Jilin

Fuel

Tianguan

to

develop

production

of

second-generation fuel ethanol.

is the second largest fuel ethanol

Alcohol

producer in China. Sinopec Corp.

N/A

00000

00000plans to establish fuel ethanol production line in Central China, using sweet potato as material.

Source: CCM International

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