China to Multiply Output of Bioethanol Fuels

China plans to expand its production and consumption of bioethanol fuel over the next three years to help reduce excess stockpiles of corn and grain.

The plan includes a nationwide rollout of E10 (gasoline with 10% ethanol) fuel by 2020. China currently is testing the fuel in 11 of its 33 provinces.

Meeting the 2020 target would require China to more than quadruple production of ethanol from just over 1 billion gallons last year to about 4.6 billion gallons in 2020, according to an analysis by the Center for Agricultural and Rural Development at Iowa State University.

China currently is the fourth-largest producer of ethanol in the world, behind the U.S., Brazil and the European Union. The country produced about 618 million metric tons of grain last year—the second most in its history, according to the China’s National Bureau of Statistics.

The stockpiles were accumulated from years of government subsidies to farmers. Until recently, Chinese corn producers were paid as much as twice the international price for their crops, according to media reports.

To support the higher goals, China’s State Administration of Grain says it is developing “market-oriented” storage methods for grain.