The biodiesel industry, with outstanding comprehensive benefits and high hopes from all sides, is encountering unprecedented development difficulties. Why does an industry with unlimited potential and should be developed greatly become so bleak?
Biodiesel is a renewable liquid fuel produced from waste oils and oil crops such as waste cooking oil. It has the characteristics of high cetane number, non-toxicity, low sulfur, biodegradability and no aromatic hydrocarbon. It can be mixed with petrochemical diesel oil or directly replaced, and is a typical green renewable energy. Therefore, countries all over the world take biodiesel as one of the important directions of new energy development.
In China, developing biodiesel has the special value of "killing two birds with one stone". Because "gutter oil" can be used as a raw material for biodiesel production, proper treatment can effectively control the stubborn disease of "gutter oil" returning to the table. In view of this, from the central high-level decision-makers to the current legal policy documents, they all take a positive attitude and explicitly encourage its development.
China’s biodiesel industry has entered the fast lane of development since 2004, with a peak capacity of 3.5 million tons/year. However, according to a survey conducted by a reporter from China Energy News, at present, nearly 90% of biodiesel production enterprises are stopping production or closing down, and the actual annual output is less than 600,000 tons. Correspondingly, China’s annual production of "gutter oil" and other waste oil raw materials resources totals more than 10 million tons. Why does an industry with unlimited potential and should be developed greatly become so bleak?
Out-of-control "gutter oil"
At the beginning of 2014, Yunnan Yingding Bioenergy Co., Ltd. (hereinafter referred to as "Yunnan Yingding"), a private biodiesel producer, filed a lawsuit against Sinopec and Sinopec’s Yunnan branch, because the latter refused to trade the biodiesel produced by the former with "waste oil". Once the news came out, it caused widespread concern in society. This "first oil antitrust case" which lasted for nearly three years but has not been closed clearly reflects the current development status of biodiesel distress in China.
While the development of biodiesel is blocked, its raw material "waste oil" is getting out of control.
It is estimated that China produces about 4 million tons of "gutter oil" and 6.8 million tons of other waste oils every year. According to the survey report of China Petrochemical Federation, according to incomplete statistics, the amount of "gutter oil" collected and utilized in China is about 2.4-3 million tons/year, of which only about 700,000 tons are used to produce biodiesel (an average of 1.2 tons of gutter oil can produce 1 ton of biodiesel), and some of them are used in leather processing, daily chemical washing and other industries, and the rest are unknown.
Due to the frequent circulation of "gutter oil" across provinces, it is difficult to supervise, and illegal activities such as cooking oil produced by "gutter oil" and feed oil produced by "hogwash fat" have been repeatedly banned. In recent years, relevant cases have been reported frequently, and the health and safety hazards caused by this have become the focus of attention of the whole society.
Just as the "First Case of Petroleum Antimonopoly", which has attracted the attention of the central authorities and passed the second trial of Yunnan High Court, is still inconclusive, and it seems that the case is far from being closed, at the same time, due to a large number of enterprises being forced to stop production, it once rushed to the biodiesel production capacity of 3.5 million tons/year, and now the output has slipped to less than 600,000 tons/year. During this period, no one knows how much of the "waste oil" that was once "burned" has returned to the table.
Biodiesel: the bane of "gutter oil"
"It is an urgent task for the central and local government departments to seek ways to effectively control the return of’ gutter oil’ to the table. Ma Kai, Deputy Prime Minister of the State Council, recently made three consecutive important instructions on biodiesel, which shows that the central level attaches great importance to it. " Wu Ping, deputy director of the Law and Governance Research Office of the Institute of Resources and Environmental Policy of the State Council Development Research Center, said in an interview with the reporter of China Energy News.
After a series of investigations, the Institute of Resources and Environmental Policy of the State Council Development Research Center and China Petrochemical Federation unanimously affirmed the prospect of biodiesel in their respective reports submitted to the State Council, emphasizing that China should, as always, vigorously promote the development of biodiesel industry.
According to the reporter’s understanding, Vice Premier Ma Kai also clearly stated in his instruction document that "it is of great significance to produce biodiesel from waste oil, and the development of biodiesel industry should be supported".
Zhu Jianjun, director of the Industrial Research Division of the Industrial Development Department of China Petrochemical Federation, bluntly said in an interview that biodiesel can be mixed with petrochemical diesel in any proportion, which can realize the centralized and large-scale utilization of waste oils such as "gutter oil" and is the best choice to prevent gutter oil from returning to the table and turn it into treasure.
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, at present, although diesel vehicles only account for 14.1% of the car ownership, their NOX and particulate emissions account for more than 69.2% and 99% of the total vehicle emissions. Solving the pollution and emission problem of diesel vehicles has also become a top priority.
Because the environmental performance of biodiesel is better than that of petrochemical diesel. "In the long run, it is of great significance to promote biodiesel on a large scale and ensure the continuous and stable supply of biodiesel raw materials by planting oil crops, which is of great significance for increasing the proportion of renewable energy and controlling air pollution." Wu Ping said.
Dilemma: legal products are sold illegally, and high-quality products are sold at low prices.
According to the information held by reporters, China has the basic conditions to accelerate the popularization and application of biodiesel under the background of high-level attention and support, complete current policy and legal documents, positive response from local governments and mature technical conditions 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. In an interview with reporters, Lu Bo, chairman of the National Biodiesel Industry Alliance and chairman of Yunnan Yingding, pointed out that if only 2% biodiesel is blended into petrochemical diesel for sale, it will be enough to digest the current biodiesel production capacity.
However, it is worth noting that in the past two years, due to the oversupply of domestic diesel market and the limited understanding of biodiesel by oil sales enterprises, it is still difficult for biodiesel to enter the oil sales system smoothly according to law, although there are laws and policies that expressly protect it.
The above report of the State Council Development Research Center pointed out that although China’s current Renewable Energy Law and other documents have made relevant provisions on the sale of biodiesel blended with petrochemical diesel, the current policy has no mandatory explicit provisions and related restraint mechanisms, and there are no operational measures, resulting in both the National Standard for Biodiesel Blended Fuel (B5) and the National Standard for Biodiesel Blended with Diesel Fuel (BD100) becoming mere formality. In recent years, the pilot projects actively promoted by local governments have also failed to coordinate the acceptance of biodiesel by refined oil sales enterprises.
A typical example is Yunnan. In 2012, the provincial government issued the "Guiding Opinions on Doing a Good Job in Making Biodiesel from Waste Oil" (document No.46 [2012] of Yun Zhengban), proposing that Kunming should be identified as a demonstration city for the application of biodiesel from waste oil in this province, and this work should be included in the post target responsibility system of the state (city), county (city, district) and included in the performance appraisal system. This opinion is the earliest and most comprehensive guidance for the development of biodiesel industry from waste oil in China. However, it has not been implemented since it has been issued for nearly five years because it is impossible to coordinate the refined oil sales enterprises of central enterprises.
The production scale of biodiesel enterprises in China is generally small, and it is difficult to obtain the qualification of wholesale and retail of refined oil according to the current relevant management regulations. There is even a saying in the industry that "it takes 180 chapters to get the qualification", in addition to huge investment in infrastructure construction. In this context, "illegal sale of legal products" and "low price sale of high-quality products" have become a distorted portrayal of the current biodiesel trade.
Li Dingjie, the industrial development department of China Petrochemical Federation, who has been paying attention to the biodiesel industry for a long time and participated in the above research, pointed out that biodiesel also experienced a period of "making big money" when oil prices were high in the previous two years. Nowadays, the oil price has been running at a low level for a long time, and it is not easy for oil sales enterprises to cope with the impact of the inferior oil market and desperately maintain their market share of petrochemical oil products. "In this case, it is not surprising that biodiesel enterprises are generally caught in serious losses and even forced to stop production or close down."
Breaking the game: government-led, closed pilot
Experts interviewed by the reporter agreed that it is the most realistic, feasible and convenient way to open up biodiesel sales by leveraging the existing huge refined oil sales system.
From the development experience of foreign countries, the FAO report shows that the global biodiesel production (mainly in America and Europe) has reached nearly 27 million tons in 2015, and it is expected to reach 33.6 million tons in 2025, and the main raw materials for production are oil forest crops. Forced blending is the main means to promote the development of biodiesel industry in various countries.
According to the research report of the State Council Development Research Center, up to now, the mandatory blending of biofuels has been implemented in more than 30 countries, and it is generally required in all countries that petrochemical diesel oil must be blended with a certain proportion of biodiesel before it can be sold.
"Ensuring the safety of the table and preventing air pollution cannot rely solely on marketization. In order to realize the’ legal sale of legal products’ of biodiesel in China, we must learn from foreign experience, establish a coordination mechanism at the national level, and give appropriate policy inclinations and forced strong promotion. " Lu Bo stressed.
The experts interviewed unanimously suggested that a closed demonstration zone for the promotion and application of biodiesel should be set up as soon as possible, and it is a pragmatic solution to choose local areas for compulsory promotion.
In Wu Ping’s view, Yunnan, Henan, Shandong and Chongqing all have the basic conditions to develop biodiesel industry, which can be promoted as a pilot. "For example, Yunnan can give full play to the advantages of planting oil forest crops on a large scale, and at the same time, it can also make use of the resource conditions of the China-Myanmar pipeline and the Yunnan refinery of PetroChina; The successful experience of closed promotion of ethanol gasoline in Henan and the industrial base of biodiesel; Shandong can give play to the advantages of existing petrochemical refineries; Chongqing has a large consumption of marine oil, which can give full play to the advantages of rich and accessible hot pot oil and protect the ecological environment of the Yangtze River Basin from the source. "
"The return of’ gutter oil’ to the table involves people’s livelihood. As an effective solution, biodiesel should first emphasize its people’s livelihood value, instead of simply treating it as an ordinary economic problem. Petroleum and petrochemical central enterprises should start from the perspective of taking social responsibility and establishing the image of central enterprises, eliminate concerns as soon as possible, unify their understanding, play a leading role, correctly guide and actively participate in promoting the development of biodiesel industry." Xu Xiaodong, former director of the research office of the National People’s Congress Environmental Appearance Committee and special researcher of the State Council Counselor’s Office, said.
Not only that, Chinese consumers have low awareness of energy conservation and emission reduction, and there is no hard pressure to reduce emissions. Although the pace of upgrading refined oil products in China has accelerated, consumers are reluctant to use high-standard petrochemical oil because of its high price, which leads to the high-standard oil produced by oil central enterprises spending huge sums of money to upgrade and transform, which is "difficult to enter the market" and difficult to solve in the short term. In Lu Bo’s view, the central enterprises actively promoting the closed pilot of biodiesel will help petrochemical high-standard diesel to be gradually accepted by the market, thus solving the problem of delisting inferior oil, and at the same time it is more conducive to government supervision, which can be described as "killing more birds with one stone".
"In order to remove the obstacle that inferior and low-quality oil will not be delisted, we must take the road of government compulsion, central enterprises leading and cooperation between the state and the people, and implement the compulsory blending of qualified biodiesel in high-standard oil in the demonstration area to meet the requirements of oil upgrading and emission standards." Lu Bo thinks.
Zhu Jianjun also pointed out in particular that the government should strengthen the supervision of the flow of "gutter oil" and completely cut off the channel of "gutter oil" returning to the dining table. "Affected by living habits, the amount of raw materials for’ gutter oil’ in various places is basically stable. As long as the flow supervision is in place, the price of raw materials can also be reduced, which can greatly improve the economy of the biodiesel industry."
Wonderful comments
The "stone" of other mountains can attack "jade"
"Waste oil" has long been a stubborn disease that is difficult to cure in the country. In fact, "gutter oil" can completely turn waste into treasure and harm into treasure, and making it into biodiesel is recognized as the best way.
Moreover, biodiesel has been paid attention to by countries all over the world because of its superior advantages of renewable, clean and safe, and thus has been developed vigorously. This can be seen from the global biodiesel production capacity of nearly 27 million tons/year, and the annual growth rate of 26.5% for more than 10 years.
In the author’s investigation and interview, it is generally believed that in China, it is more meaningful to vigorously develop the biodiesel industry. It can not only effectively solve the problem of "gutter oil" returning to the dining table, which is controversial and difficult to supervise, but also effectively solve the problem of "delisting" of petrochemical low-grade and inferior oil, and promote the "entry" of high-standard oil, which is also of great significance to the prevention and control of air pollution and the optimization of energy structure in China.
In fact, at present, whether it is to solve the problem of "gutter oil" returning to 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 point of view, the importance of vigorously developing biodiesel industry cannot be overemphasized. This also determines that the development of biodiesel industry can not be driven by marketization alone, and it can not be simply regarded as an ordinary economic problem.
Stones from other mountains can attack jade. At present, the biodiesel industry, which occupies the moral highland of "green development", has a strong development momentum all over the world. According to research data, it is estimated that the total production capacity of biodiesel in the world 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 biodiesel industry can not be separated from the strong support of governments. Among them, compulsory mixing and necessary fiscal and tax support are indispensable and important driving forces.
Countries not only use biodiesel blended oil as the mainstream means of emission reduction, but also generally require that petrochemical diesel oil without biodiesel be banned from entering the market.
O If the United States stipulates that the blending ratio of biodiesel in ordinary diesel is 10-20%, subsidies and tax incentives will be adopted for biodiesel, and the tax rate will be zero;
O France has set a target of 10% for biofuels in total fuel sales in 2015;
O Brazil requires at least 7% biodiesel to be added to all diesel sold in 2014, and plans to gradually increase it to 10% in the next three years;
O At present, the proportion of biodiesel blended in Bulgaria is 8%, and it is planned to reach 10% by 2020;
O At present, the proportion of biodiesel added in Korea is 2.5%, and the production of biodiesel is tax-free;
O Malaysia began to enforce B5 biodiesel in 2012, and the blending ratio is currently 7%, and it is planned to increase to 10%;
O Indonesia is gradually implementing the biodiesel blending ratio of 15% and plans to increase it to 20%.
O In addition, the European Union provides a consumption subsidy of 0.39 euros per liter of biodiesel, among which Italy, Spain, Sweden and other countries have completely abolished the consumption tax on biodiesel … and so on, so I don’t need to go into details.
As mentioned above, the primary significance of developing biodiesel industry is that it can effectively utilize more than 4 million tons of "gutter oil" and about 7 million tons of waste oil in China every year. If the development of biodiesel industry can make people’s "dining table" safer and help enterprises establish a responsible image of environmental protection, why not invest heavily in the development of biodiesel for enterprises?
As experts have said, the state should increase its support for the biodiesel industry from the perspective of controlling "gutter oil" or smog. As long as the policies and regulations are implemented in place and the measures are appropriate, the biodiesel industry will get rid of the current development constraints, just like the "biodiesel fever" a few years ago.
In view of the current difficulties faced by the biodiesel industry, such as experts’ suggestions, it has become a top priority to introduce mandatory blending policies and fiscal and taxation support policies at the national level, and "break through as soon as possible, select mature Yunnan, Henan, Shandong, Chongqing and other places for pilot projects and set up closed demonstration zones for biodiesel popularization and application".
As a green, clean and low-carbon renewable fuel, the healthy development of biodiesel industry is unanimously regarded as beneficial to the country and the people. It is reasonable to believe that as long as we dare to break the restricted area, we can not only consider the overall situation of national health, but also start with the small construction of demonstration areas. The successful experience of "the stone from other mountains" will inevitably push China biodiesel industry out of the current predicament.
