Home / Business / Energy Tools: Save | Print | E-mail | Most Read
CNPC invests in ethanol
Adjust font size:

China's top oil company has taken over a major ethanol maker as it tries to expand in the renewable energy sector.

 

China National Petroleum Corp (CNPC) has signed a deal with Tianguan Group, based in Henan Province, to invest in the ethanol producer, Tianguan said yesterday.

 

Tianguan did not disclose the size of CNPC's stake. But according to China Business News, CNPC has taken a 55 percent share of Tianguan to become the controlling stakeholder.

 

"To further expand the production capacity of ethanol based on non-grain raw materials, large investments are needed. That's why CNPC's investment is important for Tianguan," an anonymous Tianguan source said.

 

Han Xiaoping, a senior analyst at energy website China5e.com, agreed.

 

"Producing ethanol from non-grain materials demands more complicated technology and more investment, which CNPC can offer. With CNPC's investment, Tianguan can overcome technology obstacles or conduct mergers and acquisitions to obtain the technology needed," said Han.

 

The deal also benefits CNPC, as the nation pushes energy efficiency and emissions reduction, Han said.

 

Traditional energy producers like CNPC could be told to roll out a percentage of renewable energy in the future, or a "green energy quota", which could be a factor behind the takeover, Han said.

 

CNPC said in September it would invest 10 billion yuan in renewable energy by 2020.

 

CNPC has built 88 ethanol-gasoline combining centers in nine provinces and autonomous regions. The firm also operates a 300,000-ton ethanol plant.

 

Combined with gasoline at a rate of 5 to 10 percent, ethanol can be burned at lower emission levels.

 

But the nation has issued stringent rules on ethanol production.

 

The National Development and Reform Commission, China's top economic planner, stipulates that ethanol fuel should be developed without occupying arable land, large-scale consumption of grain or causing damage to the environment.

 

The country will not approve new projects of food-based ethanol, and plants currently making ethanol from corn have been urged to switch to new sources.

 

Tianguan has already shifted 20 percent of its production from corn to cassava.

 

But producing ethanol from non-grain materials requires higher technology and more investment, as does capacity expansion of existing facilities, Han said.

 

(China Daily November 1, 2007)

 

Tools: Save | Print | E-mail | Most Read

Comment
Username Password Anonymous
China Archives
Related >>
- Ban on Use of Corn for Ethanol Lauded
- Biofuel expert allays food-shortage worries
Most Viewed >>
- Gold futures jumps to daily limit upon debut
- Chinese economy in 2007
- Survey: B2B transaction volume up 25.5% in 2007
- Policy bank eyes rail project stake
- China Eastern not to ally with Air China

Nov. 1-2 Tianjin World Shipping (China) Summit
Nov. 7-9 Guangzhou Recycling Metals International Forum
Nov. 27-28 Beijing China-EU Summit
Dec. 12-13 Beijing China-US Strategic Economic Dialogue

- Output of Major Industrial Products
- Investment by Various Sectors
- Foreign Direct Investment by Country or Region
- National Price Index
- Value of Major Commodity Import
- Money Supply
- Exchange Rate and Foreign Exchange Reserve
- What does the China-Pakistan Free Trade Agreement cover?
- How to Set up a Foreign Capital Enterprise in China?
- How Does the VAT Works in China?
- How Much RMB or Foreign Currency Can Be Physically Carried Out of or Into China?
- What Is the Electrical Fitting in China?