Since June this year, the rising cost of food crops has led to increased competition for corn and other grains used in fuel ethanol production. On September 4, the National Development and Reform Commission officially released the "Mid- to Long-Term Development Plan for Renewable Energy," which emphasizes the use of non-food crops and plants for biofuel development. Just days later, on September 20, the commission issued an emergency notice to curb the rapid expansion of the corn processing industry, including ethanol projects, and shifted policy from encouragement to strict regulation.
Market analysts believe this shift reflects growing pressure on the country’s new energy policies. While fuel ethanol projects using grain are being restricted, alternative technologies—such as those using cassava, sweet potatoes, or sweet sorghum for ethanol, and Jatropha, Pistacia chinensis, tung tree, and cottonseed for biodiesel—are receiving more attention and support.
In response to these changes, several companies have adjusted their strategies. For example, three projects by China Agri-Industries Holdings Co., Ltd.—originally planned to invest HK$674 million—were halted due to their reliance on grain. The investment in two biochemical projects was also reduced. COFCO recently announced that it would reallocate funds previously intended for biofuels and biochemicals toward less restricted projects, aiming to avoid policy uncertainties.
Experts note that while the renewable energy sector aligns with national goals, challenges remain, including insufficient policy support, weak technological capabilities, and underdeveloped industrial systems. To address these, the National Development and Reform Commission has outlined five key measures: strengthening policy guidance, offering fiscal and tax incentives, cultivating the market, enhancing R&D and training, and raising public awareness about renewable energy.
Shi Dingxi, director of the China Renewable Energy Society, emphasized that the global shift toward renewable energy is not just a trend but a necessity driven by fossil fuel depletion and climate change. He stated that China's renewable energy sector is entering a period of rapid growth.
According to data, in 2006, China's renewable energy use reached 200 million tons of standard coal, accounting for about 8% of total primary energy consumption. The mid- to long-term plan aims to increase this to 15% by 2020. Over the next 30–50 years, as energy demand grows, the share of renewables in China’s energy mix is expected to rise significantly.
The National Development and Reform Commission also highlighted that by 2010, renewable energy development will equal 300 million tons of standard coal, and by 2020, it will reach 600 million tons, helping to reduce coal dependence and compensate for oil and gas shortages.
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