China eyes biodiesel blend standard

BEIJING (Reuters) - China is drawing up draft standards for biodiesel blends and may publish one for a five percent mix by the end of this year, an official from top refiner Sinopec said on Wednesday.

But Yang Yuanyi, Deputy Chief Engineer at Sinopec, said he did not know where any trial scheme might be rolled out.

The company's only biodiesel capacity at present was a 2000 ton pilot plant but it had technology to produce on a commercial scale, he told reporters on the sidelines of the Hart world refining and fuel conference in Beijing.

The government is also looking at a 10 percent blend, Fu Xingguo, a deputy chief engineer from rival PetroChina told the conference.

China has said it aims to use 200,000 tons of biodiesel by 2010 and 2 million tons by 2020.

Leaders are worried about the country's growing dependence on imported oil -- which now provide nearly 50 percent of its supply -- and keen to develop alternatives, including biofuels.

Biodiesel is exempt from the consumption tax of 117.6 yuan per metric ton levied on conventional diesel, though concerns over food security has led to an increased emphasis on biodiesel made from other plant matter.

Yang also said Sinopec was investing 20 billion yuan ($2.69 billion) over the three years through 2009 in upgrading its refineries to meet higher gasoline standards required by the end of that year.

($1=7.442 Yuan)

(Reporting by Emma Graham-Harrison, editing by James Jukwey)