Policies regulating development of China's ethanol industry have been submitted to the State Council for approval, according to the National Development and Reform Commission (NDRC).

Xiong Bilin, vice director of the NDRC's department of industry, told a conference on bio-energy that the oil alternative "gasohol" would account for more than half of China's gasoline consumption in 2010.

Gasohol is a fuel mixture of 90 percent gasoline and 10 percent ethanol, which can be mass-produced by fermentation of sugar or starch.

Policies will be issued to raise the technological standards for the industry, such as the maximum water and coal consumption and the capital minimum, according to industrial insiders.

China has become the third largest ethanol consumer after Brazil and the United States with consumption of gasohol accounting for 20 percent of its total gasoline consumption last year.

China has four special ethanol fuel producers with an annual production of 1.02 million tons. The capacity is expected to reach 3.25 million tons by 2010.

Industry insiders predict gasoline consumption of 65 million tons in 2010, with gasohol accounting for half of the total.

Gasohol has been piloted in nine provinces and the government plans to expand its use to other regions from 2006 to 2010.

Local governments will be permitted to issue tenders for gasohol production.

The NDRC has also issued policies to regulate the coal-chemical industry to prevent possible overheating of the industry this summer.

The government has stopped approvals of coal liquefaction projects with an annual capacity of less than three million tons, methanol or dimethyl ether projects under one million tons and coal-to-alkene projects under 600,000 tons.

Coal-chemical projects must meet environmental requirements and those that fail to meet safety requirements in transportation should be eliminated, said the NDRC.
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(Xinhua News Agency November 25, 2006)