China is set to launch a series of pilot projects to bolster the domestic production and consumption of biodiesel fuel, a low-carbon alternative to petroleum diesel made from feedstocks such as used cooking oil (UCO) and vegetable oils, as reported by Reuters on November 21. The National Energy Administration has issued a document urging regional authorities to implement demonstration projects in several areas of the biodiesel industry, requesting financial assistance from local governments. The NEA is committed to expanding the application scenarios of domestic biodiesel, which currently lag behind those of other major economies. Moreover, the agency aims to develop a replicable growth strategy that can serve as a foundation for ongoing promotion of green liquid fuels.

China’s biodiesel production surged by 32% in 2022, reaching around 2.4 billion liters. This growth was primarily driven by increasing exports to countries like the US and the European Union (EU), which have implemented incentives and blending mandates for biofuels. However, China itself does not have any biodiesel blending mandates or subsidies for its production, except for Shanghai. As a result, domestic consumption only accounts for about 40% of China’s total biodiesel output. To boost the adoption of this low-carbon fuel, the NEA is looking to integrate the UCO feedstock supply chain, add biodiesel to the fuel mix at highway gas stations, and promote the inclusion of biodiesel in a voluntary national certified emission reduction mechanism.

Sources:

https://www.reuters.com/sustainability/climate-energy/china-plans-pilot-projects-boost-use-biodiesel-2023-11-21/

https://news.cctv.com/2023/11/20/ARTIwIOZokTbxZMQxvCgsSvx231120.shtml

https://oilprice.com/Latest-Energy-News/World-News/China-Looks-to-Kickstart-Its-Domestic-Biodiesel-Industry.html

https://fas.usda.gov/data/china-biofuels-annual-8