Nearly 90% of biodiesel producers are on the verge of suspension or closure, and actual production has fallen sharply.

The biodiesel industry, which has outstanding comprehensive benefits and is highly anticipated by all parties, is experiencing an unprecedented development dilemma.

Biodiesel is a renewable liquid fuel produced from waste oils and oil crops such as “ditch oil”. It has high cetane number, non-toxicity, low sulfur, degradable and aromatic-free, and can be mixed with petrochemical diesel. Use or direct replacement is a typical green renewable energy source. Therefore, countries around the world have taken biodiesel as one of the important directions for the development of new energy.

In China, the development of biodiesel has a special value of “one stone and two birds”. Because “ditch oil” can be used as a raw material for biodiesel production, it can effectively treat the stubborn disease of “ditch oil” returning to the table. In view of this, from the central high-level decision-makers to the current legal policy documents, they all have a positive attitude towards biodiesel and clearly encourage their development.

China's biodiesel industry has entered the fast lane of development since 2004, with a peak capacity of 3.5 million tons per year. However, according to a survey conducted by reporters of China Energy News, due to sales obstacles, nearly 90% of biodiesel producers are currently on the verge of suspension or closure, and the actual annual output is less than 600,000 tons. Correspondingly, the amount of “ditch oil” and other waste oil raw materials produced in China each year totals more than 10 million tons. Why is an industry with unlimited potential and reasonable development going to be so bleak?

Out of control "ditch oil"

At the beginning of 2014, a private biodiesel producer Yunnan Yingding Bioenergy Co., Ltd. (hereinafter referred to as “Yunnan Yingding”) filed a lawsuit against Sinopec and Sinopec’s Yunnan branch, which was caused by the latter’s refusal to trade the former. Biodiesel produced by oil. Once the news came out, it caused widespread concern in society. This "oil anti-monopoly first case", which lasted for nearly three years but has not yet been closed, clearly reflects the current development of biodiesel distress in China.

At the same time that biodiesel development is hindered, its raw material “ditch oil” is simultaneously showing an increasingly out of control state.

It is estimated that China produces about 4 million tons of “ditch oil” every year, and about 6.8 million tons of other waste oil. According to the research report of the China Petrochemical Federation, according to incomplete statistics, the current collection and utilization of “ditch oil” in China is about 2.4-3 million tons/year, of which only about 700,000 tons are used to produce biodiesel (average 1.2 tons of trench oil). It can produce 1 ton of biodiesel), and some are used in leather processing and daily washing industries. The rest of the flow is unknown.

Due to the frequent circulation of “ditch oil” across provinces, it is difficult to supervise. The illegal activities such as “ditch oil” production of edible oil and “shuishui oil” to produce feed oil have been repeatedly banned. In recent years, relevant cases have been reported frequently, and the resulting health and safety hazards have become more problematic. Has become the focus of attention of the whole society.

The "oil anti-monopoly first case" that has attracted the attention of the central high-level and passed the second trial of the Yunnan High Court is still inconclusive, and it seems that the distance is closed for a long time. At the same time, a large number of enterprises were forced to suspend production and once rushed to 3.5 million tons. The annual production capacity of biodiesel has slipped to less than 600,000 tons/year. During this period, no one knows how much of the “ditch oil” that was once “burned” has returned to the table.

Biodiesel: "Ground Oil" Buster

“Seeking to effectively control the 'ditch oil' is the way to return to the table. The current central and local government authorities are in urgent need of advancement. The State Council’s Deputy Prime Minister Ma Kai has made three important instructions for biodiesel in the near future, which shows that the central level attaches great importance to it. Wu Ping, deputy director of the Law and Governance Research Office of the Resource and Environmental Policy Research Institute of the Development Research Center of the State Council, said in an interview with the China Energy News.

After a series of investigations, the Institute of Resources and Environmental Policy of the Development Research Center of the State Council and the China Petrochemical Federation unanimously affirmed the prospects of biodiesel in their reports submitted to the State Council, stressing that China should continue to vigorously promote the development of biodiesel industry. .

According to the reporter's understanding, Deputy Prime Minister Ma Kai also clearly stated in his instructions that "the use of 'ditch oil' to produce biodiesel is of great significance and should support the development of the biodiesel industry."

Zhu Jianjun, director of the Industrial Research Division of the Industrial Development Department of the China Petrochemical Federation, said in an interview that biodiesel can be mixed with petrochemical diesel in any ratio, which can achieve centralized and large-scale utilization of waste oil such as “ditch oil”. “Ditch oil” is the best choice to return to the table and turn it into a waste.

It is worth noting that the added value of biodiesel does not stop there.

According to the research report of the Ministry of Environmental Protection, diesel engines currently account for only 14.1% of vehicle ownership, and their NOX and particulate emissions account for 69.2% and 99% of total vehicle emissions. Solving the problem of pollution emissions from diesel vehicles has also become a top priority.

Because biodiesel environmental performance is better than petrochemical diesel. "In the long run, large-scale promotion of biodiesel, through the cultivation of oil crops to ensure the continued stable supply of biodiesel raw materials, is of great significance for improving the use of renewable energy, air pollution control, etc." Wu Ping said.

Dilemma: illegal products are sold illegally, and high-quality products are sold at low prices.

Judging from the information held by many reporters, under the background of high-level attention support, current policy and legal documents, active local government response, and mature biodiesel technology, China has the basic conditions for accelerating the promotion and application of biodiesel.

Statistics show that in 2015, China's diesel consumption reached 204 million tons, and it is expected to reach 221 million tons in 2020. Lu Bo, chairman of the National Biodiesel Industry Alliance and chairman of Yunnan Yingding, said in an interview that if biodiesel is only blended into petrodiesel at a 2% ratio, it will be enough to digest the current biodiesel capacity.

However, it is worth noting that in the past two years, due to the oversupply of the domestic diesel market and the limited understanding of biodiesel by oil sales companies, although the legal policy clearly escorts, it is still difficult for biodiesel to enter the oil sales system smoothly according to law.

According to the above report of the Development Research Center of the State Council, although China's current Renewable Energy Law and other documents have made relevant regulations on the sale of biodiesel blended petrochemical diesel, the current policy does not have a mandatory regulation and related restraint mechanism. There are also no operability measures, resulting in the National Standard for Biodiesel Blend Fuel (B5) and the National Standard for Biodiesel for Diesel Fuel Blending (BD100). In recent years, the pilots actively promoted by local governments have also been unable to coordinate the acceptance of biodiesel by refined oil sales companies.

Typical, such as Yunnan, in 2012, the provincial government issued the "Guiding Opinions on Doing a Good Job in Biodiesel Production in Ditch Oils" (Yun Zheng Ban [2012] No. 46 Document), proposing to identify Kunming as the province's "ditch oil" "The biodiesel application demonstration city, and the work is included in the state (city), county (city, district) long position target responsibility system, into the performance evaluation system, and at the same time make a series of promotion of biodiesel "cancellation" Institutional arrangements. This opinion is currently the earliest and most comprehensive guidance for the development of bio-diesel industry in the “ditch oil” system. However, it has not been implemented since it has been unable to coordinate the sales of refined oil products of central enterprises for nearly five years.

The production scale of biodiesel enterprises in China is generally small. It is difficult to obtain the wholesale and retail qualifications of refined oil products according to the current relevant management regulations. The industry even circulates that “the qualifications need to cover 180 chapters”, in addition to the huge infrastructure construction investment. In this context, “illegal sale of legitimate products” and “selling of high-quality products at low prices” have become a distorted portrayal of the current biodiesel trade.

Li Dingjie, the industry development department of the China Petrochemical Federation, which has long been concerned about the biodiesel industry and participated in the above research, pointed out that when oil prices were high in the past two years, biodiesel also experienced a period of “making big money”. Nowadays, oil prices have been operating at low levels for a long time, and oil sales companies are struggling to cope with the impact of the inferior oil market. It is not easy to desperately keep their petrochemical oil market share. "Under this situation, it is not surprising that biodiesel companies are generally caught in serious losses and even forced to stop production and close down."

Breaking the bureau: government-led, closed pilot

Experts interviewed by reporters unanimously believe that leveraging the existing huge oil product sales system is the most practical and convenient way to open up biodiesel sales.

From the experience of foreign development, the FAO report shows that in 2015, global (mainly in the Americas and Europe) biodiesel production has reached nearly 27 million tons, and is expected to reach 33.6 million tons in 2025. The main raw materials for production are oil forest crops. the Lord. Forced blending is the main means by which countries promote the development of the biodiesel industry.

According to the research report of the Development Research Center of the State Council, as of now, the mandatory blending regulations for biofuels have been implemented in more than 30 countries. It is generally required that petrochemical diesel must be blended with a certain proportion of biodiesel.

"Ensuring the safety of the table and preventing air pollution cannot be solely driven by marketization. To realize the legal sale of 'legal products' in China's biodiesel, we must learn from foreign experience, establish a coordination mechanism at the national level, and give appropriate policy inclinations and forcefully promote. Lu Bo stressed.

The interviewed experts unanimously recommended that the biodiesel promotion and application of the closed demonstration zone be established as soon as possible, and the selection of local areas forcible promotion is a pragmatic solution.

In Wu Ping's view, Yunnan, Henan, Shandong and Chongqing all have basic conditions for the development of the biodiesel industry, which can be promoted as a pilot. “If Yunnan can take advantage of large-scale planting of oil-forest crops, it can also take advantage of the resource conditions of the China-Myanmar pipeline and CNPC Yunnan refinery; Henan can use the successful experience of ethanol gasoline closure and the industrial base of biodiesel; Shandong can play Existing petrochemical refineries and other advantages; Chongqing marine oil consumption is large, can play the advantages of rich and easy access to hot pot oil, from the source to protect the ecological environment of the Yangtze River basin."

“The return of the 'ditch oil' to the table involves people's livelihood. As an effective solution, biodiesel should first emphasize its people's livelihood value, and should not simply regard it as an ordinary economic issue. The petroleum and petrochemical central enterprises should proceed from the perspective of social responsibility. From the standpoint of establishing the image of central enterprises, we will eliminate concerns and unify understanding as soon as possible, play a leading role, correctly guide and actively participate in the development of biodiesel industry. Xu Xiaodong, director of the National Research Office of the National People's Congress and the special researcher of the State Council Counselor's Office, said .

Not only that, China's consumers have low awareness of energy conservation and emission reduction, and there is no hard pressure to reduce emissions. Although the pace of upgrading of refined oil products in China is accelerating, consumers are reluctant to choose high-grade petrochemical oil because of high prices, which has led to a huge investment in oil companies. The high standard oil for the transformation and production is “difficult to enter the market” and it is difficult to solve in the short term. In Lu Bo's view, the central government's active promotion of the biodiesel closure pilot will help the petrochemical high-standard diesel oil to be gradually accepted by the market, thus solving the problem of delisting of inferior oil, and at the same time being more conducive to government supervision, which can be described as “one arrow and many sculptures”.

"To remove the barrier of inferior quality low-grade oil without leaving the market, it is necessary to take a road of government compulsory, central enterprise-led, 'national' and 'civil' cooperation, and implement the mandatory blending of high-standard oil in the demonstration zone. Biodiesel to meet oil upgrading and emission standards," Lu Bo said.

Zhu Jianjun also pointed out that the government should strengthen the supervision of the flow of "ditch oil" and completely cut off the channels of "ditch oil" returning to the table. "Affected by living habits, the amount of raw materials in the 'ditch oil' is basically stable. As long as the flow is in place, the price of raw materials can be lowered, which will greatly enhance the economics of the biodiesel industry."

Comment: The "stone" of his mountain can attack "Jade"

â– Fang Yan

"Ground oil" has long been a stubborn disease that is difficult to cure in the country. In fact, “ditch oil” can completely turn waste into treasure and turn harm into treasure. It is recognized as the best way to make it into biodiesel.

Not only that, but biodiesel has been highly valued by the world for its superior regenerative, clean and safe advantages. From the current global biodiesel production of nearly 27 million tons / year capacity, for more than 10 years, 26.5% of the annual growth rate of production capacity can be seen.

In the author's research interview, the general view is that in China, the development of the biodiesel industry has multiple meanings. It can not only effectively solve the problem of “ditch oil” returning to the table that is currently controversial and difficult to supervise, but also effectively solve the problem of “delisting difficulties” for petrochemical low-grade and inferior oil, promoting the entry of high-standard oil into the market, and preventing and controlling air pollution in China. Optimizing the energy structure is also important.

In fact, at present, no matter whether to solve the problem of “removing oil” on the table, or to control air pollution, it has become an important livelihood issue that governments at all levels need to focus on. From this perspective, the importance of vigorously developing the biodiesel industry cannot be overemphasized. This also determines that the development of the biodiesel industry cannot rely solely on market-driven driving, and cannot simply regard it as an ordinary economic problem.

Stones from other hills, can learn. At present, the biodiesel industry, which occupies the “green development” moral highland, has a strong development momentum around the world. According to research data, it is estimated that the world biodiesel production capacity will reach 33.6 million tons in 2025. In recent years, the successful experience of more than 30 countries around the world shows that the rapid development of the biodiesel industry is inseparable from the strong support of governments. Among them, mandatory blending and necessary fiscal and tax support are essential and important driving forces.

Countries not only use biodiesel blended oil as a mainstream means of emission reduction, but also generally prohibit the entry of petrochemical diesel without blended biodiesel into the market.

For example, the United States stipulates that the proportion of biodiesel in ordinary diesel oil is 10-20%. The subsidy and tax incentives for biodiesel are zero, and the tax rate is zero. France determines that the target of biofuels in total fuel sales in 2015 is 10%; Brazil requires At least 7% of all diesel fuel sold in 2014 will be added to biodiesel and is planned to increase to 10% in the next three years; Bulgaria currently imposes a biodiesel blend of 8% and plans to reach 10% by 2020. South Korea currently has a biodiesel addition ratio of 2.5% and a tax exemption policy for biodiesel production; Malaysia has imposed B5 biodiesel since 2012, with a current blending ratio of 7% and plans to increase to 10%; Indonesia is gradually implementing 15% biodiesel blend ratio and plans to increase to 20%. In addition, the EU provides a consumption subsidy of 0.39 euros per liter of biodiesel. Among them, Italy, Spain, Sweden and other countries have completely eliminated the biodiesel consumption tax... and so on, I do not need to repeat them.

As mentioned above, the primary significance of the development of the biodiesel industry is that it can effectively utilize more than 4 million tons of “ditch oil” and about 7 million tons of waste oil per year in China. And if the development of the biodiesel industry can make the "table" of the people safer and help the company to establish a responsible image of green environmental protection, why not invest in the development of "biodiesel" for enterprises?

As experts have said, the state should increase its support for the biodiesel industry, both from the perspective of governance of “ditch oil” and from the perspective of managing haze. As long as policies and regulations are in place and measures are in place, the biodiesel industry will get rid of the current development constraints, just like the "biodiesel heat" a few years ago.

In view of the current difficulties faced by the biodiesel industry, such as expert advice, the introduction of mandatory blending policies and fiscal and taxation support policies at the national level, “break through the point as soon as possible, select the mature Yunnan, Henan, Shandong, Chongqing and other places to pilot and set up The promotion and application of biodiesel in closed demonstration zones has become a top priority.

As a green, clean and low-carbon renewable fuel, the healthy development of the biodiesel industry is consistently regarded as a benefit to the country. There are reasons to believe that as long as you dare to break the restricted area, you can not only think about the overall situation of the health of the whole people, but also start from the construction of the demonstration area. The successful experience of the "stone of other mountains" will inevitably push the Chinese biodiesel industry out of the current predicament.

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