China eyes advanced ethanol technologies to quench fuel demand

By Lux Research | April 11, 2014

China's fast-growing demand for oil, and its continued dependency on sugar-based ethanol, is opening up opportunities for advanced ethanol technologies, according to Lux Research.

More than 99.5 percent of China's ethanol production – growing at a five-year compound annual growth rate (CAGR) of 27.3 percent – is derived from conventional sugar fermentation routes by edible and non-edible feedstocks, putting growing pressure on agriculture.

“Chinese cellulosic researchers are focusing on cost-effective systems in collaboration with indigenous industrial players, whereas China's coal-to-ethanol is growing fast due to lighter feedstock pretreatment and deep industrial attention,” said Nancy Wu, Lux Research Analyst and the lead author of the report titled, “Fueling China's Vehicle Market with Advanced and Coal-based Ethanol.”

“Collaboration between foreign technology providers and large Chinese producers would be essential to seize the vast opportunities in China's fast-growing ethanol market,” she added.

Lux Research analysts examined supply, demand, technology development and government support to pinpoint opportunities for investment and partnership in the advanced ethanol market. Among their findings:

Coal-to-ethanol is a near-term winner. Coal-to-ethanol is gaining more industrial attention; acetic-acid-to-ethanol is the most proven technology with the largest commercial scale.

Cellulosic ethanol is a research hotspot. Leading Chinese research groups are focusing on enzyme engineering to make cellulosic ethanol profitable. Process engineering is another research hotspot with diversified technology routes.

Growing international collaboration is emerging. The top three state-owned companies – COFCO, CNPC (PetroChina) and Sinopec – dominate the fuel ethanol production with a combined market share of over 60%. However, international companies like Celanese, LanzaTech, Novozymes, Sojitz, and Hitachi Zosen are partnering with Chinese SOEs to enter.

The report, titled “Fueling China's Vehicle Market with Advanced and Coal-based Ethanol,” is part of the Lux Research China Innovation Intelligence service.

Tuesday, April 8, 2014