Farmer Li Guangrong was overjoyed last year when he received a red envelope filled with 3,000 yuan ($439) in cash.

The 59-year-old man from Southwest China's Yunnan province had not expected to earn the extra money from looking after a jatropha plantation during his spare time.

Workers at a biofuel power plant。[File photo]

After all, planting rice and corn on 5-mu (0.33 hectares) of land contracted to his family has been his top priority.

The Li family is one of more than 320 households in Yongxing town, some 260 km north of the provincial capital of Kunming, who help plant 20,040 mu (1,337 hectares) of jatropha for Yunnan Shenyu New Energy Co Ltd.

Jatropha, a perennial poisonous shrub, was previously never regarded by local farmers in Yunnan as an industrial crop that could generate economic benefit.

It was at most used as a living fence to protect fields from animals.

But in the eyes of Gou Ping, Shenyu New Energy's general manager, the lush green shrub is a goldmine that could generate 400 million yuan in annual sales for her company in the near future.

When jatropha seeds are crushed, the resulting oil can be processed to produce biodiesel that can be used in a diesel car.

The residue can also be processed and used as biomass feedstock to power electricity plants or used as fertilizer.

Each jatropha seed produces 30 percent to 40 percent of its mass in oil. Jatropha can be grown in a range of difficult soil conditions, including arid and non-arable areas.

"We are very confident about the biofuel industry. Many countries, including China, have realized the renewable energy industry would become a new engine for economic growth," Gou said.

Gou's ambition is in line with Yunnan province's plan to develop renewable energy projects.

The mountainous province, which boasts the largest diversity of plants in China, plans to build itself into a major biofuel production base for China.

The province plans to be able to produce 500,000 tons of biodiesel annually by 2015, according to a development plan for 10 key industries issued by the provincial government in September last year.

Planting jatropha has been a focus for the local government's biofuel development plans since 2007.

Yunnan currently has about 1.39 million mu (92,713 hectares) of jatropha and plans to develop 3 million mu (200,100 hectares) of jatropha by 2015, said Wang Weibin, director of the afforestation division of the provincial forestry department.

Increasing environmental concerns and rising crude oil prices are forcing countries including the United States and China to look for alternative energy resources.

BP Plc, the largest oil and gas producer in the US, said in September that biofuels would replace about 25 percent of gasoline and 8 percent of diesel in the US in 2030.

US biofuel production will rise more than fourfold to about 2.3 million barrels a day in 2030 from less than 500,000 barrels a day in 2007, Katrina Landis, head of BP's alternative-energy unit, said in a speech posted on the company's website in September.

Carbon dioxide

As the world's second largest oil importer, China is also promoting the development of biofuel to reduce its dependency on imported crude oil.

The country plans to be able to blend 2 million tons of biodiesel into its annual fuel consumption by 2020.

China's annual crude oil demand is expected to exceed 400 million tons this year and reach 563 million tons by 2020, according to a report issued by the Chinese Academy of Social Sciences.

The Chinese government declared at the end of November that China plans to reduce the carbon dioxide emission per unit of gross domestic product (GDP) by 40 to 45 percent in 2020 from the baseline of 2005.