The Chinese government intends to roll out the nationwide use of E10 fuel (10% ethanol) in gasoline by 2020 but this ambitious objective is at risk amid concerns regarding supplies of the required raw material such as corn and the escalating trade dispute with the United States.
The objective was unveiled in September 2017 and state-held biofuels producers such as COFCO, Julin Fuel and State Development & Investment Corporation (SDIC) accelerated their investments but none of them received approval from the government. Their projects have stalled and no new ethanol projects has started yet. In 2017, fuel ethanol capacity was estimated 3.45 Mt, far from the 15 Mt required to reach the E10 target by 2020.
The gap could be covered by importing bioethanol, but China already imposes a 30% tariff on all ethanol imports. It also imposed an extra 15% tariff on imports from the United States and will impose another 25% tariff in early July 2018.
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