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China's largest oil and gas producer, China National Petroleum Corp (CNPC), unveiled a clean energy project in Sichuan Province yesterday. The company said it aims to produce 100,000 metric tons of bio-diesel and 600,000 tons of ethanol.

 

CNPC inked a deal with the Sichuan provincial government to set up the bio-fuel base in Western China, it said in a statement. The project is based on bio-fuel technology cooperation between CNPC along with four global energy companies and comes one year into the country's 11th Five-Year Plan (2006-10) which calls for major cuts in pollution.

 

The oil firm didn't name the four partners. They only stated the project was designed to bridge the gap between energy demand and supply in China and make Sichuan a role model in clean energy production and consumption.

 

CNPC is making the move to invest in the future and relieve pressure on China's tightened energy supply, said a senior analyst from the National Development and Reform Commission. This is China's top economic planner.

 

"It's a wise move for oil giants like CNPC and Sinopec to gear up preparation for future business development by investing in renewable energy such as bio-fuel," the expert named Su said.  

 

Su pointed out that at the present stage the development of bio-diesel was still far from profitable, given hefty costs and the technological complexity of the initiative. "Also, capacity cannot be raised substantially in the short term because of the lack of raw material," Su added.

 

(China Daily November 21, 2006)