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How to launch the pilot program of biodiesel in the domestic market?
Release time：2024-11-04 source：澎湃新闻·澎湃号·媒体
Currently, the EU has implemented a temporary anti-dumping duty policy of 12.8% to 36.4% on Chinese biodiesel.
Affected by the temporary anti-dumping measures of the European Union, the prices of biodiesel products of enterprises have continued to decline and fluctuate, and the overall operating income of biodiesel business has declined significantly. Therefore, enterprises have to adjust and reduce their export volume accordingly, "Guo Qi, General Manager of the Bioenergy Business Unit of Shenzhen Langkun Environmental Group Co., Ltd., told reporters.
In the view of Zhang Dayong, Deputy Secretary General of the China Association for the Promotion of Industrial Development and Secretary General of the Biomass Energy Industry Branch, accelerating the construction of biodiesel pilot projects and opening up the domestic circulation are crucial for achieving high-quality industrial development.
In fact, in recent years, China has been actively promoting the use of advanced bio liquid fuels. The "Action Plan for Energy Conservation and Carbon Reduction from 2024 to 2025" recently issued by the State Council proposes to reasonably regulate oil consumption and promote advanced bio liquid fuels. The "Action Plan for Large scale Equipment Renewal in Transportation" recently issued by the Ministry of Transport and other departments also proposes to vigorously support the application of new and clean energy, including biodiesel, in the field of transportation ships.
Many industry insiders also believe that biomass energy is an overlooked part of renewable energy and has broad market prospects. However, at present, China's dependence on foreign markets for biodiesel is relatively high, and the pilot operation in China is facing problems such as insufficient economy and inadequate policy standards.
The export volume of has significantly declined, and the domestic market should be gradually activated.
According to the data from the Biomass Energy Industry Branch, by the end of 2023, the total production of biodiesel in China will be approximately 2.2 million tons.
The report on the development of advanced biofuels in China shows that in 2023, the total export volume of biodiesel in China will be 1.95 million tons.
Overall, about 80% of China's exported biodiesel relies on the European market. This is also the reason why the Chinese biodiesel industry has been severely affected after the imposition of anti-dumping duties.
According to the "Report on the Development of Advanced Biofuels in China", influenced by earlier EU policies such as traceability of imported biodiesel raw materials and anti circumvention investigations, the export volume of biodiesel from China will significantly decrease in 2023, from 260000 tons in January to about 120000 tons in December, with a decline of more than 50%. Combined with the EU's anti-dumping investigation into imported biodiesel from China at the end of 2023, the biodiesel industry is currently facing significant challenges.
The development of China's biodiesel industry is highly dependent on the international market, which is unhealthy for the industry, "Shi Lishan, Vice President of the China Industry Development Promotion Association and former Deputy Director of the New Energy and Renewable Energy Department of the National Energy Administration, told reporters. China should gradually launch the domestic biodiesel market.
It is reported that since 2011, China has successively issued relevant standards, which have determined that biodiesel can be added to ordinary diesel in corresponding proportions.
Currently, the annual production of ordinary diesel is about 200 million tons, and through fuel blending, it is entirely possible to achieve self digestion of biodiesel, "said Shi LishanBut currently only some regions (such as Shanghai) add biodiesel according to relevant standards. The enthusiasm of gas stations in many regions to use biodiesel is not high, "Deng Jinhua, Chairman of Hubei Tianji Bioenergy Co., Ltd., told reporters.
In order to promote the consumption of biodiesel in China, in April 2024, the National Energy Administration issued a notice on publicizing the pilot projects for the promotion and application of biodiesel, identifying 22 pilot projects for the promotion and application of biodiesel to help open up the domestic market space for biodiesel.
has high prices and weak purchasing intentions, and its carbon reduction benefits have not yet been reflected
Why does China still rely on the international market for biodiesel despite existing policy support in the country?
Guo Qi introduced that when the price of biodiesel in China was low, it was also heavily blended into ordinary diesel to reduce the operating costs of ordinary diesel. However, its historical price was generally higher than that of ordinary diesel, so the domestic market demand was insufficient, and the price of Chinese biodiesel sold to the European Union would be higher.
In fact, the National Energy Administration has promoted the "digestion" of biodiesel in China through pilot projects, bringing a turning point for the development of biodiesel, but also facing the problem of insufficient demand in the domestic market.
According to the Renewable Energy Law of the People's Republic of China, the state encourages the production and utilization of liquid biofuels. Oil sales enterprises shall include bio liquid fuels that meet national standards in their fuel sales system in accordance with the regulations of the competent energy department of the State Council or the provincial people's government.
Enterprises that produce biodiesel do not have sales qualifications. Just like power generation companies that need to sell through power grid channels, biodiesel can only be sold through enterprises with terminal sales channels to blend biodiesel into B5 and B24 products, "Deng Jinhua explained." However, due to the periodic fluctuations in biodiesel sales prices higher than diesel wholesale prices, enterprises with terminal sales believe that using biodiesel affects their profits, and purchasing biodiesel will increase costs in terms of blending, transportation, application, promotion, and user acceptance, affecting profits, so their willingness to purchase is not strongAccording to industry insiders, even though the Renewable Energy Law of the People's Republic of China stipulates that if oil sales enterprises fail to include bio liquid fuels that meet national standards in their fuel sales system as required, resulting in economic losses for bio liquid fuel production enterprises, they should bear compensation liability. However, it must be noted that China's terminal consumer oil prices are regulated and regulated by the state. After the addition of biodiesel, the cost of front-end raw materials increases, but the back-end prices remain relatively fixed,In the context where the carbon reduction benefits have not yet been reflected, domestic circulation is relatively difficult.
It is reported that currently, Shanghai has adopted subsidy policies to promote the development of biodiesel. According to the corresponding requirements of the "Shanghai Management Measures for Supporting the Promotion and Application of Cooking Waste Oil to Produce Biodiesel", subsidies of different amounts, such as 0.15 yuan per liter and a maximum of 0.24 yuan per liter, will be provided to B5 biodiesel blending and sales enterprises to regulate the price market.
At the same time, relevant departments are researching and developing a methodology for reducing carbon emissions from biodiesel, with the aim of reflecting the green premium of biodiesel through CCER and enabling it to better enter the market.
It should be noted that many people question the potential corrosion hazards of biodiesel. This is also one of the reasons why the relevant standards previously stipulated that the amount of biodiesel added to ordinary diesel was relatively low (the amount added to one ton of ordinary diesel should not exceed 1%). However, in Shanghai, where a large amount of biodiesel is used, the petroleum road transportation sector has already supplied an average of 1.4 million liters of B5 biodiesel per day, with a cumulative use of over 2 million tons of B5 biodiesel, reducing carbon emissions by over 200000 tons. There have been no malfunctions or potential application hazards caused by the use of biodiesel in vehicles.
Recently, the National Standard Information Public Service Platform announced the national standard plan "Biobased Blended Vehicle Diesel" (hereinafter referred to as the standard plan), which pointed out that in some regions of China, the promotion of biodiesel cannot be vigorously promoted due to the B5 diesel national standard limiting the amount of additives, resulting in poor operation of the entire biodiesel process. It is urgent to increase the blending ratio of biodiesel in diesel and increase the variety of hydrocarbon based biodiesel. Therefore, this standard plan will be revised based on the previous corresponding standards.
According to the minimum addition amount of 1% of China's 2023 diesel consumption of nearly 200 million tons, the application of biodiesel can reach about 2 million tons. If the blending ratio can be further expanded, it will help the development of the domestic biodiesel industry, "said Deng Jinhua.
Many problems to be solved: Consumption tax is inevitable, standards are missing
It should be noted that as of now, the pilot promotion and application of biodiesel has been carried out for more than half a year, and in the process of implementation, pilot enterprises are facing difficulties.
It is reported that the use of biodiesel is exempt from consumption tax, but after processing into biodiesel blended fuel, additional consumption tax needs to be paid.
The relevant departments believe that blending is processing, and the processed biodiesel does not meet the requirements for exemption from consumption tax. Therefore, the consumption tax exempted during the biodiesel stage still needs to be paid when it is used at the end. A person in charge of a pilot enterprise for promoting the application of biodiesel said that the consumption tax for one ton of biodiesel is about 1400 yuan, which greatly reduces the economic feasibility of promoting biodiesel.
The pilot project for promoting the application of biodiesel requires the addition of B5 biodiesel storage tanks and related facilities at gas stations. "An industry insider said," If we support the proportional blending of biodiesel in refineries, it may save a lot of energy and equipment waste. After the pilot project in the future, when biodiesel is promoted nationwide, companies hope to adopt this sales methodAccording to technical classification, Chinese biodiesel is divided into first generation ester based biodiesel and second-generation hydrocarbon based biodiesel. Most of the biodiesel mentioned in current standards, policies, and documents in China refers to fatty acid methyl esters, which are the first generation ester based biodiesel.
The second-generation hydrocarbon based biodiesel in China only has industry standards, without national standards, and there is no corresponding national standard for reference within the current system, resulting in a lack of reference for diesel related policies and indicators. During the pilot application process, there was insufficient standard support when communicating with end users, leading to many obstacles in the current stage of work. Although enterprises have also hired third-party organizations to conduct testing and analysis reports and experiments, the recognition of end users is not high, and vehicle users do not have the corresponding basis for the use of automotive diesel. "The industry insiders pointed out that without national standards, commodity codes, and tax rules, hydrocarbon based biodiesel cannot be invoiced, which in turn leads to the inability to form supply chains and industrial chains during commodity circulation.
Based on this, many pilot enterprises believe that the above-mentioned problems faced by biodiesel enterprises, whether from the pilot or the work mode carried out, cannot be solved by one enterprise alone, and need to be further addressed by relevant national departments from a top-level design perspective.
Affected by the temporary anti-dumping measures of the European Union, the prices of biodiesel products of enterprises have continued to decline and fluctuate, and the overall operating income of biodiesel business has declined significantly. Therefore, enterprises have to adjust and reduce their export volume accordingly, "Guo Qi, General Manager of the Bioenergy Business Unit of Shenzhen Langkun Environmental Group Co., Ltd., told reporters.
In the view of Zhang Dayong, Deputy Secretary General of the China Association for the Promotion of Industrial Development and Secretary General of the Biomass Energy Industry Branch, accelerating the construction of biodiesel pilot projects and opening up the domestic circulation are crucial for achieving high-quality industrial development.
In fact, in recent years, China has been actively promoting the use of advanced bio liquid fuels. The "Action Plan for Energy Conservation and Carbon Reduction from 2024 to 2025" recently issued by the State Council proposes to reasonably regulate oil consumption and promote advanced bio liquid fuels. The "Action Plan for Large scale Equipment Renewal in Transportation" recently issued by the Ministry of Transport and other departments also proposes to vigorously support the application of new and clean energy, including biodiesel, in the field of transportation ships.
Many industry insiders also believe that biomass energy is an overlooked part of renewable energy and has broad market prospects. However, at present, China's dependence on foreign markets for biodiesel is relatively high, and the pilot operation in China is facing problems such as insufficient economy and inadequate policy standards.
The export volume of has significantly declined, and the domestic market should be gradually activated.
According to the data from the Biomass Energy Industry Branch, by the end of 2023, the total production of biodiesel in China will be approximately 2.2 million tons.
The report on the development of advanced biofuels in China shows that in 2023, the total export volume of biodiesel in China will be 1.95 million tons.
Overall, about 80% of China's exported biodiesel relies on the European market. This is also the reason why the Chinese biodiesel industry has been severely affected after the imposition of anti-dumping duties.
According to the "Report on the Development of Advanced Biofuels in China", influenced by earlier EU policies such as traceability of imported biodiesel raw materials and anti circumvention investigations, the export volume of biodiesel from China will significantly decrease in 2023, from 260000 tons in January to about 120000 tons in December, with a decline of more than 50%. Combined with the EU's anti-dumping investigation into imported biodiesel from China at the end of 2023, the biodiesel industry is currently facing significant challenges.
The development of China's biodiesel industry is highly dependent on the international market, which is unhealthy for the industry, "Shi Lishan, Vice President of the China Industry Development Promotion Association and former Deputy Director of the New Energy and Renewable Energy Department of the National Energy Administration, told reporters. China should gradually launch the domestic biodiesel market.
It is reported that since 2011, China has successively issued relevant standards, which have determined that biodiesel can be added to ordinary diesel in corresponding proportions.
Currently, the annual production of ordinary diesel is about 200 million tons, and through fuel blending, it is entirely possible to achieve self digestion of biodiesel, "said Shi LishanBut currently only some regions (such as Shanghai) add biodiesel according to relevant standards. The enthusiasm of gas stations in many regions to use biodiesel is not high, "Deng Jinhua, Chairman of Hubei Tianji Bioenergy Co., Ltd., told reporters.
In order to promote the consumption of biodiesel in China, in April 2024, the National Energy Administration issued a notice on publicizing the pilot projects for the promotion and application of biodiesel, identifying 22 pilot projects for the promotion and application of biodiesel to help open up the domestic market space for biodiesel.
has high prices and weak purchasing intentions, and its carbon reduction benefits have not yet been reflected
Why does China still rely on the international market for biodiesel despite existing policy support in the country?
Guo Qi introduced that when the price of biodiesel in China was low, it was also heavily blended into ordinary diesel to reduce the operating costs of ordinary diesel. However, its historical price was generally higher than that of ordinary diesel, so the domestic market demand was insufficient, and the price of Chinese biodiesel sold to the European Union would be higher.
In fact, the National Energy Administration has promoted the "digestion" of biodiesel in China through pilot projects, bringing a turning point for the development of biodiesel, but also facing the problem of insufficient demand in the domestic market.
According to the Renewable Energy Law of the People's Republic of China, the state encourages the production and utilization of liquid biofuels. Oil sales enterprises shall include bio liquid fuels that meet national standards in their fuel sales system in accordance with the regulations of the competent energy department of the State Council or the provincial people's government.
Enterprises that produce biodiesel do not have sales qualifications. Just like power generation companies that need to sell through power grid channels, biodiesel can only be sold through enterprises with terminal sales channels to blend biodiesel into B5 and B24 products, "Deng Jinhua explained." However, due to the periodic fluctuations in biodiesel sales prices higher than diesel wholesale prices, enterprises with terminal sales believe that using biodiesel affects their profits, and purchasing biodiesel will increase costs in terms of blending, transportation, application, promotion, and user acceptance, affecting profits, so their willingness to purchase is not strongAccording to industry insiders, even though the Renewable Energy Law of the People's Republic of China stipulates that if oil sales enterprises fail to include bio liquid fuels that meet national standards in their fuel sales system as required, resulting in economic losses for bio liquid fuel production enterprises, they should bear compensation liability. However, it must be noted that China's terminal consumer oil prices are regulated and regulated by the state. After the addition of biodiesel, the cost of front-end raw materials increases, but the back-end prices remain relatively fixed,In the context where the carbon reduction benefits have not yet been reflected, domestic circulation is relatively difficult.
It is reported that currently, Shanghai has adopted subsidy policies to promote the development of biodiesel. According to the corresponding requirements of the "Shanghai Management Measures for Supporting the Promotion and Application of Cooking Waste Oil to Produce Biodiesel", subsidies of different amounts, such as 0.15 yuan per liter and a maximum of 0.24 yuan per liter, will be provided to B5 biodiesel blending and sales enterprises to regulate the price market.
At the same time, relevant departments are researching and developing a methodology for reducing carbon emissions from biodiesel, with the aim of reflecting the green premium of biodiesel through CCER and enabling it to better enter the market.
It should be noted that many people question the potential corrosion hazards of biodiesel. This is also one of the reasons why the relevant standards previously stipulated that the amount of biodiesel added to ordinary diesel was relatively low (the amount added to one ton of ordinary diesel should not exceed 1%). However, in Shanghai, where a large amount of biodiesel is used, the petroleum road transportation sector has already supplied an average of 1.4 million liters of B5 biodiesel per day, with a cumulative use of over 2 million tons of B5 biodiesel, reducing carbon emissions by over 200000 tons. There have been no malfunctions or potential application hazards caused by the use of biodiesel in vehicles.
Recently, the National Standard Information Public Service Platform announced the national standard plan "Biobased Blended Vehicle Diesel" (hereinafter referred to as the standard plan), which pointed out that in some regions of China, the promotion of biodiesel cannot be vigorously promoted due to the B5 diesel national standard limiting the amount of additives, resulting in poor operation of the entire biodiesel process. It is urgent to increase the blending ratio of biodiesel in diesel and increase the variety of hydrocarbon based biodiesel. Therefore, this standard plan will be revised based on the previous corresponding standards.
According to the minimum addition amount of 1% of China's 2023 diesel consumption of nearly 200 million tons, the application of biodiesel can reach about 2 million tons. If the blending ratio can be further expanded, it will help the development of the domestic biodiesel industry, "said Deng Jinhua.
Many problems to be solved: Consumption tax is inevitable, standards are missing
It should be noted that as of now, the pilot promotion and application of biodiesel has been carried out for more than half a year, and in the process of implementation, pilot enterprises are facing difficulties.
It is reported that the use of biodiesel is exempt from consumption tax, but after processing into biodiesel blended fuel, additional consumption tax needs to be paid.
The relevant departments believe that blending is processing, and the processed biodiesel does not meet the requirements for exemption from consumption tax. Therefore, the consumption tax exempted during the biodiesel stage still needs to be paid when it is used at the end. A person in charge of a pilot enterprise for promoting the application of biodiesel said that the consumption tax for one ton of biodiesel is about 1400 yuan, which greatly reduces the economic feasibility of promoting biodiesel.
The pilot project for promoting the application of biodiesel requires the addition of B5 biodiesel storage tanks and related facilities at gas stations. "An industry insider said," If we support the proportional blending of biodiesel in refineries, it may save a lot of energy and equipment waste. After the pilot project in the future, when biodiesel is promoted nationwide, companies hope to adopt this sales methodAccording to technical classification, Chinese biodiesel is divided into first generation ester based biodiesel and second-generation hydrocarbon based biodiesel. Most of the biodiesel mentioned in current standards, policies, and documents in China refers to fatty acid methyl esters, which are the first generation ester based biodiesel.
The second-generation hydrocarbon based biodiesel in China only has industry standards, without national standards, and there is no corresponding national standard for reference within the current system, resulting in a lack of reference for diesel related policies and indicators. During the pilot application process, there was insufficient standard support when communicating with end users, leading to many obstacles in the current stage of work. Although enterprises have also hired third-party organizations to conduct testing and analysis reports and experiments, the recognition of end users is not high, and vehicle users do not have the corresponding basis for the use of automotive diesel. "The industry insiders pointed out that without national standards, commodity codes, and tax rules, hydrocarbon based biodiesel cannot be invoiced, which in turn leads to the inability to form supply chains and industrial chains during commodity circulation.
Based on this, many pilot enterprises believe that the above-mentioned problems faced by biodiesel enterprises, whether from the pilot or the work mode carried out, cannot be solved by one enterprise alone, and need to be further addressed by relevant national departments from a top-level design perspective.
