Development and Reform Commission Emergency Stopping Corn Ethanol Project

Unfinished projects will be suspended from construction, and the filing system will be changed to an approval system, restricting foreign investment. The State Development and Reform Commission has issued an emergency notice on September 20 to limit the blind expansion of the corn deep processing industry such as corn ethanol, emergency braking of corn deep processing projects, and deep processing of corn. Industrial policies made major adjustments from encouragement to strict restrictions.
The National Development and Reform Commission clearly stated in the “Guidelines on Promoting the Healthy Development of Maize Deep Processing Industry” (Hui Fa Industrial [2007] No. 2245) that the construction of the proposed project that has been filed but not yet started during the “11th Five-Year Plan” period will be stopped. In principle, new corn deep-processing projects will no longer be approved; all newly-built and rebuilt corn deep-processing projects must be approved by the investment authority of the State Council; the corn deep processing industry should be adjusted upwards, and the existing net assets of the company must not be lower than the required capital of the proposed project. 2 times, the total assets shall not be less than 2.5 times the total investment required for the proposed project. At the same time, the corn deep processing project will be listed in the restricted foreign investment industry list, and foreign investors will not be permitted to invest in biological liquid fuel ethanol production projects and mergers, acquisitions, and restructuring of domestic fuel ethanol production enterprises.
In order to develop ethanol-gasoline, since the "Tenth Five-Year Plan" period, the central government has invested huge sums of money to develop grain ethanol, and implemented a preferential policy that exempted fixed-point enterprises from 5% consumption tax. This led to an average annual increase of maize consumption of 14% during the “15th Five-year Plan” period, while the average annual increase in corn production during the same period was only 4.2%. In December 2006, the State Council issued the "National Development and Reform Commission's Urgent Notice on Strengthening the Construction and Management of Corn Processing Projects." It urged all localities to not blindly develop corn processing fuel ethanol, and to clean up corn processing projects. On June 7 this year, Premier Wen Jiabao presided over the 179 executive meetings of the State Council, emphasizing that the development of renewable energy "can not occupy farmland, must not consume large amounts of food, and must not destroy the ecological environment." On September 4, the state announced the implementation of the "Mid-term and long-term development plan for renewable energy," which clearly stipulates that it will no longer increase the fuel ethanol production capacity using grain as raw material, and rationally use non-food biomass feedstock to produce fuel ethanol.
Li Shizhong, an energy expert and deputy director of the Institute of New Energy Technology at the Institute of Nuclear Energy Research at Tsinghua University, believes that the National Development and Reform Commission issued an emergency notice to make major adjustments to China's corn processing industry policy, indicating that China will no longer increase corn production fuel ethanol production capacity and The project, that is, only the existing four fixed-point companies can do grain ethanol, and the production is limited.
It is understood that, recently, due to the international investment in the tropical deep-processing projects to invest in tropical food prices, various ethanol fuel producing countries are also adjusting related policies.

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