08.08.2015   Second Generation Biofuels and Biomass

China’s Diesel Pricing Mechanism

The Chinese government occasionally publishes guidance prices for diesel. These guidance prices set a range for the retail prices and are generally followed by industry participants. As biodiesel prices are affected by the price of diesel, these guidance prices will limit the price that a biofuel company can charge for their products. I expect that the Chinese government will gradually relax the pricing mechanism.

China is committed to a 25% usage of biofuel for transportation by 2020. The three state-owned oil companies — China National Petroleum Corporation (CNPC), Sinopec, and China National Offshore Oil Corporation (CNOOC) — have launched new biorefineries or are planning to do so.

Analysts forecast demand for diesel to grow at 5.7% in the 2006-2030 period to 360 million tonnes. Table 12.1 shows see projections for China’s biodiesel growth potential.

Table 12.1 Diesel market in China,

Diesel (million tonnes)

Biodiesel 5% (million tonnes)

2010

120

6

2020

200

10

2030

360

18

Source: Energy Information Administration, Short Term Energy Outlook, 2011.

150 | 72 Biofuels in China

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