Efforts to promote alternative, green energy sources excite companies across industries
China's efforts to promote the use of biofuel received key impetus last month with the announcement of encouraging initial findings of a pilot project involving biodiesel in Shanghai, and from rapid progress in the adoption of bioethanol gasoline elsewhere.
In addition, infrastructure worth billions of dollars is being planned or created to support promotion of biofuels.
The developments have significant implications for the country's drive to broad-base its energy-mix, achieve energy security and cut polluting emissions, industry insiders said.
A breakthrough-like sign is that China Petroleum & Chemical Corp, the country's largest oil refiner, said it is ready to step up its involvement in the biofuel market in a serious way.
Among industry circles, this is seen as nothing less than a tectonic shift in strategy. For, biofuels, although desirable from an environmental point of view, are more expensive than traditional fuels like diesel and gasoline, hence a sales challenge (more about this aspect in a bit).
For long, China Petroleum & Chemical Corp, which is also known as Sinopec, has been known for its leading role in traditional energy like oil and gas.
Now, however, emboldened by the findings of its pilot biodiesel project, Sinopec is itching to switch gears and ramp up its biofuel play.
In 2016, the company started fueling vehicles in Shanghai with B5, a biofuel made from recycled cooking oil, commonly known as "gutter oil". B5 consists of 5 percent biodiesel and 95 percent diesel, and hence helps cut carbon emissions.
So far, Sinopec's Shanghai pilot project has provided more than 10 million liters of B5 to more than 130,000 vehicles.
More than 2,000 trucks and pickups run on B5 every day in Shanghai. B5 has been also used to power airplanes and buses in China. More than 100 buses on 10 routes have used biodiesel since early last year in Shanghai.
After years of efforts, B5 has forayed into the retail space. It is sold alongside other petroleum products, Sinopec said.
"The biodiesel has received positive responses from drivers. They said there's no difference in their vehicle's performance after they started using the biodiesel," said Xu Kunlin, vice-mayor of Shanghai.
Sinopec's renewed biodiesel efforts coincide with a statement from the Ministry of Environmental Protection last month that stricter emission limits will be gradually placed on carbon monoxide, total hydrocarbons, nitrogen oxides and particulate matter produced by new motor vehicles.
The ministry will announce unified national emission standards for new vehicles, to encourage the research and development of automobiles that can run on alternative fuels such as natural gas, liquefied petroleum gas, ethanol and biodiesel.
Trucks in Shanghai fill up B5 at Sinopec's company site. To prepare for a future involving alternative fuels, Sinopec is mulling plans to expand its biodiesel stations to other major cities across the country.
Besides expanding the station network, more specialized pumps will likely be built to facilitate use of biofuel in the future, Sinopec said. But such investments would depend on whether or not the Shanghai B5 pilot project is considered a total success.
Yet, to further promote use of biodiesel, the Shanghai municipal government will increase the number of biodiesel fueling stations from the current 21 to 200 by the end of this year.
This would mean, Sinopec will have to use all of the gutter oil produced in Shanghai as raw material to manufacture biodiesel.
Analysts said the B5 pilot project, if it proves to be an unqualified success, would help further promote the application of biodiesel, an alternative energy that might have significant influence on the country's energy security.