Biofuels are seen as a potential alternative to fossil fuels, because they can be manufactured from sustainable crops including corn, wheat, sugar, cassava, sweet sorghum, and oilseeds.
The moratorium will ease manufacturing concerns about competing for ingredients being used to make ethanol and biodiesel. Corn is currently accounts for 90 per cent of the inputs in Chinese ethanol manufacture, and has sharply risen in price over the past few years due to subsidies and high crude oil prices.
Moreover, last year's 43 per cent rise in the price of pork, China's principal meat, due to increasing feed costs, has pushed officials to act.
"Food-based ethanol fuel will not be the direction for China," said Xu Dingming, an official of the National Energy Leading Group, at a energy seminar held this week, according to the Xinhua News Agency.
Biofuel manufacturers will now need to source non-food crops, such as cassava and sweet sorghum used to make liquor, leaving the remainder for consumption and processing.
Last year, responding to a rise in prices due to supply shortages, China, the world's second largest producer after the US, banned corn exports for a month.
Four sites across China produce about one million tonnes of ethanol annually from three million tonnes of corn, with another three under construction, according to a 2006 US Department of Agriculture Foreign Agricultural Service report. Two major biodiesel plants in operation produce about 50,000 tonnes in total each year.
While biofuel production is barely noticeable compared to the 323 million tonnes of crude oil China used in 2005, government targets plan to expand ethanol production to four million tonnes by 2010, while increasing biodiesel to two million tonnes.
The anticipated rapid growth in biodiesel is attributed to China demand for diesel doubling that for gasoline due to its use in agriculture and haulage. By 2020, China expects 15 per cent of its transport energy needs will be met using biofuels.
China's current cassava production is estimated at 7.5 million tonnes per year. Increased planting of cassava and technological advances could eventually add 21 million tonnes to cassava production. Until supply can match demand, cavassa imports from Thailand, Vietnam, and Indonesia will continue to grow, up from 257,000 tonnes in 2000 to about 3.3 million tonnes in 2005.
Sweet sorghum, which is drought-tolerant, could become an increasingly important input for ethanol production, though more development is needed to obtain the required efficiencies.
To counter the demand for food-crops, the first cellulosic ethanol plant in China was announced recently. Cellulosic ethanol can be produced from almost any organic matter, including agricultural waste, grasses, sewage, sludge, switchgrass, plant stalks, and trees. This first cellulosic plant should in operation by 2008, producing lignocellulose ethanol.
Chinese farmers are expected to plant 27.35 million hectares of corn this year, slightly higher than the 27.05 million hectares in 2006, according to the China National Grain and Oils Information Center.
The center estimates that annual Chinese corn consumption for 2006 to 2007 will reach 144.5 million tonnes, with output at 144 million tonnes.
