China plans a nationwide mandate on use of ethanol in gasoline by 2020, state media reported on Wednesday, which coming on the heels of an expected push into electric vehicles indicates Beijing is broadening its push to clean up smog-choked cities.
It’s the first time the government has set a timeline for use of the biofuel, known as E10, across the world’s largest car market, although a formal policy hasn’t been announced.
The ethanol drive will also reduce excessive stockpiles of corn used to make the cleaner-burning fuel.
“This news has greatly boosted confidence inside the industry,” said Michael Mao, analyst with Sublime China Information, adding that without government support ethanol would likely be too expensive.
A renewed effort to promote the nation’s fledgling biofuels industry will be a further blow to oil producers. On Saturday, the government said it has begun studying when to ban the production and sale of cars using traditional fossil-based fuels.
The UK and France have already announced plans to ban production of cars running on fossil fuels from 2040, which in turn is driving billions of dollars in spending by automobile companies into developing and improving electric vehicles.
The government said late last year it would double ethanol output by 2020 to whittle down mountains of corn in state warehouses.
China built up state corn reserves estimated at about 200 million metric tons, equivalent to a year of demand, following a now discontinued government stockpiling scheme to support farmers.
The Xinhua report said the government aims to build an ethanol production base in the country’s northeast, the main corn growing region, without giving further details.
“Experts have proposed expanding production and consumption of ethanol to balance grain supply and demand and efficiently dispose of surplus grains,” an unnamed official from the National Energy Administration was quoted as saying.
China’s use of renewable-based fuel lags the rest of the world, with only 3 million metric tons of consumption in 2016, or less than one percent of total fuel use, the official added.
The government also aims for large-scale production of cellulosic biofuels made from grass, trees and crop waste by 2025, according to the report.
China is currently the world’s third-largest ethanol producer, but with output of about 2.1 million tonnes a year, production is a long way behind global leaders Brazil and the United States.