Private Chinese Enterprises to Build Biodiesel Production in Canada

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Researched by Industrial Info Resources (Sugar Land, Texas)--More than 100 private enterprises in China plan to establish 40 biodiesel production plants in cooperation with Canadian partners to produce biodiesel in Canada and import biodiesel to China on a large scale. The initial investment in the project is about $30 million, most of which comes from loans from Canada's government. According to the initial agreement, the Canadian partners hope to secure a 25-year long-term supply contract to export between 1 million and 2 million tons of biodiesel to China every year.

Each biodiesel base in the project will take up an area of about 50 acres. The raw material used to produce biodiesel will include grain sorghum, corn and maize straw. Some say it will be difficult for Chinese investors to profit out of this project because of high production costs overseas. Domestic Chinese biodiesel is sold at about $950 to $1,050 per ton.

Biodiesel is a clean and renewable energy source. Because the supply of raw material for biodiesel production in China is scarce, the government has banned the use of food crops to make biodiesel. The main source of biodiesel production in China is waste oil from restaurants and seeds from trees with high oil content.

China's government, however, still aims to double the country's annual biodiesel production capability by 2010 from the current 100,000 tons. But because of the lack of a national standard for blending biodiesel with conventional diesel, biodiesel in China is only used as a bunker fuel and industrial lubricant rather than as a transportation fuel.

Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.