Perspective of Bioenergy and Jatropha in China

1. Perspective of Bioenergy and Jatropha in China 北京科技大学教授Heinz-Peter Mang Centre for Sustainable Environmental Sanitation (CSES)School of Civil & Environmental EngineeringUniversity of Science and Technology Beijing

2. Topics Food Security Climate Protection Bioenergy

3. People's Republic of China • Has the largest population of any country in the world. 2005, the total population of China is 1.3 billion or about one fifth of the world population. • Population density 135 people per square kilometer. • Annual population growth rate in 2006 at 0.59 percent. • GDP per capita is ranking after No.100 among all countries in the whole world. • 23 million people are living below the national poverty line. • 57 percent of China’s population is living in the undeveloped rural areas. UNDP, Human Development Report 2006

4. Overall and harmonious development of people and nature, people and society, and economy and society. • 11th Five-Year Plan (2006–10) centered on independent innovation, sustainable economic growth and building an environmental friendly and human centered society. • It emphasizes a shift from extensive to intensive growth in order to meet demands for improved economic returns. • Conservation of resources includes a 20-percent reduction in energy consumption by 2010. • Scientific concept of development and building a socialist harmonious society. • Promote balances or “harmony” between • urban and rural development, • development among regions, • economic and social development, • development between human and nature, • domestic development and opening to the outside world.

5. Lower-middle-income country • China is still categorized as a developing country with a per capita income of approximately between 1500 and 1.740 USD per year. • China is classified under OECD/DAC as „lower-middle-income country“. • World Bank estimates, 320-350 Mio Chinese are still living on less than 2 USD/day. The gap between rich and poor is widening. • China does not have an overall, economic and accessible health care system. Only 14% of employees hold unemployment insurance, 18% health insurance and 23% retirement schemes. • Unemployment is on the rise: The official unemployment rate in urban areas is at 8.5%, in the country at 30%. This leads to migration, especially to the urban centers in the east. • There is a strong need for qualified personnel. USD 1500 according to 2006 BMZ Country Strategy Paper, USD 1740 according to figures available from the Chinese Embassy in Germany (2007) and People's Daily, 21. August 2006 World Development Report 2007

6. China energy market • 2006, 70% of China's energy use was based on coal, with other forms of energy each accounting for a tiny proportion according to official statistics. • The National Development and Reform Commission (NDRC) announced in October 2007 that China would lift the proportion of renewable energy consumption to about 10 percent by 2010, and to 20 percent by 2020. • In 2005 the non fossil energy supply in China was 7% (incl. hydropower). • Increase biodiesel output for transport to 200,000 tons by 2010 and 2 million tons by 2020. • China is expected to consume 62.5 percent more oil in 2020 (563 million tons) compared with 2006 (346.6 million tons) as fast economic growth will continue to fuel domestic demand. (2010: 407 million tons). In the first five months of 2007 China’s net imports of crude oil totaled 65.83 million MT, an 11.5% increase over the same period in 2006. Chinese domestic crude oil production in the first five months of 2007 totaled 77.51 MT, a 1.7% increase compared to the 2006 period. www.biopact.com Jan. 17th, 2008 Chinese Academy of Social Science forecast report 2008

7. Energy consumption and production US – EUROPE – CHINA Energy situation in 2006

8. Climate Protection Climate Protection • Renewable Energy (RE) development to 10% share in 2010. • China is the second largest emitter of CO2 and the largest emitter of SO2. • Chinas influence on the global climate change is very important and constantly on the rise, with an ever growing need for more energy and resources, which can already not be covered by China alone. • This has an immediate effect on the countries where China is currently sourcing and on the overall impacts of globalization. • China is aware of the negative consequences of this developmentand has introduced far-reaching and modern environmental laws and regulation. However, the implementation of these laws and their monitoring remains weak. BMZ 2007, Länderkonzept China: according to estimates, the economic costs of environmental damage in China are eating up a considerable part of its economic growth

9. Climate Protection Climate Protection • Promotion of climate protection, energy saving, renewable energy technologies • Support for biogas and biofuel energy by biodegradable feedstock supply • Promoting climate neutral fertilizer production • Support and development of CDM projects • International technology and know-how transfer

10. Bioenergy Past developments (1/2) • According to the Sixth National Survey on Forest Resources, conducted by the State Forestry Administration (SFA), the existing forest area of China is 0.175 billion ha and the growing stock is 13.6 billion m³, accounting for 3.2% of the world’s total. • The Chinese management organization of forest includes state owned forest enterprises, state owned forest farms, collectively owned forest farms, individually managed forest farms, and household units. • Traditionally forest energy aspects are only related to fuel wood, and woody plant oil is often dedicated to Traditional Chinese Medicine (TCM).

11. Bioenergy Past developments (2/2) • Systematic research started in the early 1990’s: program of “Fuel Plants’ Survey and Planting Technology Research” carried out by the Chinese Academy of Sciences (CAS) during the period of the 8th Five-year Plan, 1991-1995 • oil plants in the drainage area of Jinsha River, Sichuan province, were investigated, the planting technologies of some fuel plants were studied, and 30 ha of Jatropha curcas L. were planted for demonstration.

12. Bioenergy Biomass energy resources • Mainly straw and other agricultural wastes, waste from forestry and forest product processing, animal manure, energy crops and energy plantations, organic effluents from industry, municipal wastewater, and bioorganic municipal waste (BMW). • 600 million tons of crop straw produced every year, nearly 300 million tons (around 150 million tons of coal equivalent (tce)) can be used as fuel. • 900 million tons of waste from forestry and forest product processing available every year, nearly 300 million tons (or about 200 million tce) can be used for energy production. • 57 million hectares of marginal lands, 15% can be used to cultivate energy crops and plantations. In addition, there are near 0.1 billion ha of marginal lands such as saline lands, sandy lands, mining lands, etc., which can be planted as energy forest. • Biogas and BMW are also biomass energy resources with good potential for development. • In 2007, NDRC estimates that the country’s total biomass resource that can potentially be converted into energy is about 500 million tce. NDRC: Medium and long-term development plan for renewable energy in China, September 2007

13. Bioenergy Bioenergy policies • Law of the People's Republic of China on Renewable Energy. • The operational opinion of finance and tax supporting policies about the development of bio-energy and bio-chemistry industry. • Middle and long term development plan of renewable energy. • To ensure the food security, grains and corn was restricted to bio-energy production since 2007, rape seed oil followed since 2008. • The national development plan of energy forest. • Construction plan of bio-energy forests during 11th five-year plan period.

14. Bioenergy RE development targets Long and medium term planning of RE, CNP report 2007

15. Bioenergy Theoretically all forest resources can be utilized as raw material of bioenergy • The main types of forest biomass for energy are restricted to: • (1) shrubs: 45.3 million ha and mainly distributed in northwest and southwest of China - up to 0.18 billion tons at an production average of 4t/ha. • (2) the “three residues” from forestry maintenance and timber processing work considering the environmental impacts of total forest use (firewood) – at least 6.8 billion tons of biomass

16. Bioenergy (3) Woody oil-bearing plants • There are more than 1,554 species of oil-bearing plants in China, which belong to 697 genera of 151 families. • 154 kinds of these have a seed oil content of up to 40%. • About 4.2 million ha of oil-bearing forests yield fruit output of 5.6 million tons. • To date only plants with a total yearly output of 1.5 million tons are exploited (TCM, paint, biodiesel, lubricants, chemical industry) leaving a great prospect of exploiting the rest of 4.1million tons/year.

17. Bioenergy National investments in Jatropha biodiesel • On January 11th, 2007 SFA and China National Petroleum Corporation (CNPC) signed a contract to cooperate in the cultivation and exploration of energy forest: Jatropha curcas L. energy forest bases with projected plantations of more than 40,000ha and aimed feedstock provision for biodiesel production of 60,000t/y were currently under construction in Yunnan and Sichuan province as the first phase of the project. • On April 6th, 2007 SFA signed a similar agreement with COFCO, China’s largest oils and food im- and exporter, and a leading food manufacturer, ambitious to be a leading participant in Jatropha curcas L. energy forest production. COFCO will invest in energy forest as a demonstration project to produce at least 20,000t/y of liquid bio-fuel in Guizhou province. • China National Offshore Oil Corp. (CNOOC) also plans to invest 2.3 billion RMB until 2010 to develop 33,000 ha of Jatropha curcas L. forest in Panzhihua, Sichuan province. • Yunan Shengyu New Energy Company plans to develop Jatropha curcas L. forest on more than 150,000 ha in Yunnan province. The first period of the project started 2007 with total investment of 90 million RMB, including establishing 20,000ha of energy forests and the construction of a millwork plant.

18. Bioenergy Foreign investments in Jatropha biodiesel • Biodiesel Manufacturing Company (UK) plans to plant over 30,000ha of Jatropha curcas L. in Guangxi province, with an expected capacity of 100,000t/y as feedstock. The project owner will provide seedling and technologies for free, and purchase seeds of Jatropha curcas L. from local farmers. By 2009, this project should produce more than 10,000t/y biodiesel. • British Sunshine Technology Group (UK) has planted 267 ha Jatropha curcas L. forest in 2006, and is planning to plant 20,000ha more in the Basin of Honghe River of Yunnan province during 2007-2012. In Sichuan province, the investor plans to develop over 650,000 ha of Jatropha curcas L. forests at a total investment of over 4 billion RMB. • Baker Biofuel Company (USA) has planted 10,000ha of Jatropha curcas L. forests in Panzhihua, Sichuan province, in 2005. It is further planned to invest over 2 billion US$ in the energy forest of Panzhihua, aiming to construct the biggest biofuel feedstock base of the world within the next few years. • In 2007, Yunnan Plant Oil Group and German Energy Strategy Consulting Company signed a project idea note to invest in energy forest, in a first stage about 0.65 billion RMB to plant 50,000-70,000ha Jatropha curcas L., and to construct a factory with capacity of 50,000-100,000t/y of biodiesel production.

19. Bioenergy Rented land (Forest usage right) • operating business to grow Jatropha in a large scale in the key provinces of Hainan, Yunnan, Guangxi, Guangdong and Fujian. • identify suitable land banks that would be a viable low cost consideration to rent the land on a long term basis and manage a plantation by establishing a Jatropha crop.

20. Bioenergy Contract farming • with well established relationships and inputs and buy back managed contracts. • Site Production & yield • Land availability • Contract farming • Environmental assessments • Land use – water and greenhouse gas • Land classification • Production model • require carefully managing to ensure guaranteed suitable supply.

21. Bioenergy Research on cultivation and breeding of oil-bearing tree species • (1) Introduction, selection and cultivation of appropriate firewood tree species; • (2) Analysis on the energy potential of 120 native or exotic tree species in different regions; • (3) National survey on resources of woody oil-bearing plants; • (4) Research on the physiological and ecological properties of oil-bearing plant species, and construction of breeding bases appropriate species. • (5) Exploration of quality improving manners of oil-bearing plants through bio-technology.

22. “Statistical Yearbook of Chinese Forestry (2005)”and “The statistical table of areas and output of economic forestry of China”

23. Bioenergy Development plan of bio-energy forests during 11th Five Year Plan period During the 11th Five Year Plan period (2006 – 2010), 839,100ha of energy forests are to be planted to provide raw material for 1.25 million tons biodiesel each year. Up to 2020, energy forests will count more than 13 million ha, thus providing 6 million tons of biodiesel each year. • The following measures will be adopted to fulfill the plan: • Quality improvement of key oil-bearing tree species such as Jatropha curcas L, Pistacia chinensis, Cornus Wilsoniana, Cornus Wilsoniana, • Improve forest of lower productivity to profitable forests; • Demonstrate high-yield cultivation technologies, • Implement RE projects in potential areas.

24. Bioenergy Jatropha curcas L. • belonging to nettle spurge and spurge family, generally taller than 2m, up to 10m. • Mainly distributed in tropical very dry to moist areas, through subtropical to wet forest zones. • It is a perennial plant with a high-yield period of at least 30 years. • Under very favourable conditions, harvesting of seeds can achieve up to 9 kg/tree/year; under less favourable conditions, harvest can drop to 0.2-2 t/ha. • The largest Jatropha curcas L forest in development in China is located in the Southwest of Sichuan province, with a total area of up to 27,000ha.

26. Food Security Energy or Food? • Conflict potential between energy-oriented infields and foodstuff plantations? • according to studies on Chinese food supply the potential output per ha can meet most of the increased demand for food – also in future. • 27% of China’s territory is desert • Over the past 25 years, China has made great strides in improving agricultural productivity and reducing hunger and poverty levels • Competition will always exist for both the biomass for liquid biofuel production and the requisite land resource to grow it: the five "f" of biomass usage: food, feed, fibre, forage, and fuel • In the Chinese context energy-oriented agriculture and forestrywith at least some valued dual use or co-product derived from the crop should be promoted

27. Food Security Land competition solved? • Energy crop plantation projects are not allowed to compete with food and fed production quality land. • As the amount of fertile land suitable for agriculture, and even the amount of marginal land, is limited, NDRC announced in 2007 not to accept bio-fuel production based on staple food and to shift bio-fuel production to other energy high yield plants such as sorghum, cassava and sweet potatoes. China Daily, 17.07.07

28. Food Security Food security and plant oil • In highly populated areas of China biofuel oil plant will compete with food production areas. • In many regions in China marginal arable land is available. These areas are perfect to start with plant oil production. • Organic matter to improve soil fertility and oil plant productivity should include the waste and wastewater management sector. • Many tree borne oil varieties can be used as cooking oil for own consumption or as product for selling. • Village electrification from plant oil can be the starting point for commercial food processing activities.

29. Food Security Straith vegetable oil (SVO) keeps the money in the village • Added value remains in the community: The whole supply chain from the oil crop cultivation, the oil pressing and filtering and the electricity production is managed and controlled by local people. They are the beneficiaries. • The money expenses for the SVO remain in the village, the money expenses for the electricity remain also in the village. A local economic loop is created. • New jobs: SVO production creates permanent local jobs for the oil production, SVO genset operation and electricity distribution. • SVO production has always as byproduct the press cake. This presscake is perfect for biogas production, if it is mixed with local energy crops like sorghum or grass. The slurry from the biogas plant is a high value fertilizer for farming. • Biogas can replace charcoal as cooking fuel. • A closed nutrient loop for sustainable biofuel production is created.

30. Food Security Biomass energy reality • 35 million poor people of the rural population still has no access at all to electricity . • The government has committed to resolving this situation during the 11th Five-Year Plan (2006-2010). • The Ministry of Agriculture relates rural biomass energy to increased agricultural efficiency and farmer’s income, improved environment, energy conservation and emission reduction. • Based on these achievements, China is willing to conduct extensive international cooperation and exchange on biomass energy development. Invitation of International Seminar on China’s Rural Biomass Energy – June 2008, announced in March 2008

31. Food Security Conclusion • Wind, solar, and wave energy relies strongly on hardware capital cost. • Biomass, biogas and biofuel can be competitive in- and outside China. • The challenge is that Chinese agro-forestry is still too inefficient and too environmental resources consuming to supply the huge local demand for agriculture goods and energy feedstock at competitive prices. • If China can improve agro-forestry efficiency, it will greatly boost local agriculture industry competitiveness and lower cost for bio-fuels and biomass energy, not to mention the more efficient use of land and the impact to raise the living standard of farmers.

32. 北京科技大学教授Heinz-Peter Mang Centre for Sustainable Environmental Sanitation (CSES)School of Civil & Environmental EngineeringUniversity of Science and Technology Beijing 谢谢 THANK YOU cses@biogas.tk cses@ecosan.net.cn