The Chinese government has issued a package of
policies, including risk reserves, subsidies and tax breaks, to
encourage the development of the bio-energy and bio-chemical
industries, the National Development and Reform Commission (NDRC)
said Thursday.
Under the new policies, enterprises should set up risk
reserves, which will be used to offset their losses when the oil
price is low.
When the oil price is low for a sustained period, a
government subsidy regime will be triggered to cover the losses of
enterprises.
The new policies were jointly issued by the NDRC, the
ministries of finance and agriculture, the State Administration of
Taxation, the State Forestry Administration.
The government will also provide subsidies to
developers of raw material supply bases for the bio-energy and
bio-chemical industries, particularly those using non-arable
land.
Subsidies will also be available to model projects
with significant technical innovations.
The bio-energy industry was important for
environmental protection, rural development, in addition to being a
new source of growth for the economy, an NDRC official
said.
After years of trials in selected provinces, the
government has begun pouring huge investment into the bio-energy
sector.
The country produced 1.02 million tons of bio-ethanol
from corn and other raw materials in 2005. The ethanol is added to
petrol at a ratio of 1:10 for use in automobiles.
The government estimates that by 2010, ethanol-mix
petrol will account for half of China's petrol
consumption.
Large firms, such as the China National Petroleum
Corporation (CNPC) and the China National Cereals, Oils and
Foodstuffs Corp (COFCO), have announced ambitious plans for
bio-energy investments.
CNPC has signed an agreement with the government of
Sichuan Province in southwest China to develop facilities to
produce 600,000 tons of automotive-grade ethanol from sweet
potatoes each year and 100,000 tons bio-diesel made from the seeds
of the jatropha curcas tree.
COFCO said in October it would invest one billion yuan
(US$126 million) to build a major ethanol plant in Guangxi region,
also in southwest China.
The plant, with a capacity of 400,000 tons, will lift
1.1 million farmers out of poverty by growing cassava as the raw
material for the plant, said Yue Guojun, head of COFCO's
bio-chemical and bio-energy division.
(Xinhua News Agency December 1, 2006)
|