China’s government will enact new fiscal policies to encourage the development of biomass energy, according to a CCTV report. Biomass energy is energy derived from plant matter such as trees, agricultural crops, and a range of organic wastes and residues. These resources can be processed to produce electricity, biofuels, and chemicals.
Zhu Zhigang, China’s Vice Financial Minister, told participants at a June 7 national fiscal meeting that the Ministry of Finance is deliberating a cost-sharing and risk-sharing mechanism for biomass energy to encourage its development.
“A risk-sharing mechanism allows [biomass energy] companies to reserve risk funds before taxation during oil price hikes. Those funds will be used to compensate losses and sustain companies’ operations if oil prices plummet,” said Zhu.
Under an ambitious government plan, China aims to produce 12 million tons of biofuels, including ethanol and biodiesel, annually by 2020, accounting for 15 percent of the nation’s transportation fuel use. Currently, the country produces roughly one million tons of fuel ethanol from corn each year, 5,000 tons of ethanol from sweet sorghum, and just under 100,000 tons of biodiesel from waste vegetable oil and oil plants such as Jatropha curcas, Pistacia chinensis, and rapeseed.
The use of biomass for electricity generation is also picking up. Several pilot projects set up in recent years are using the stalks of agricultural crops as feedstock, providing a promising alternative to heavily polluting coal-fired power plants.
With its large agricultural base and wide variety of plant species, China boasts tremendously rich biomass resources. The State Forestry Administration reports that the nation is home to 1,554 types of oil plants, more than 30 of which are highly adaptable and widely distributed. China also produces around 1.5 billion tons of agricultural and wood wastes or residues annually, including 100 million tons of agricultural crop stalks. These stalks, which have the potential to provide 50 million metric tons of energy (standard coal equivalent), are currently burned away by farmers, contributing to China’s air pollution problems.
The government’s new financial commitment to biomass energy is expected to kindle industry enthusiasm in related investments and R&D. Experts believe that accelerated development of biomass energy will help alleviate China’s dependence on oil imports, save natural resources, and ease environmental tensions.
