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China ethanol approval for cassava plan

Hainan, China-based Hainan Yedao Group (SHA:600238) said it has received approval from experts who inspected its new 100,000-ton (33 million U.S. gallon) ethanol plant in Haikou, in the southern islands of China.

Hainan Yedao and partners have invested 350 million RMB ($51.5 million USD) in the plant, which plans to produce the fuel using cassava, a woody shrub that grows in the subtropical region of southern China.

Cassava is China’s fifth-largest crop yield after rice, sweet potato, sugar cane, and maize. The Guangxi region accounts for 70 percent of the country’s yield, averaging 7 million tons a year.

Hainan Yedao is a liquor and healthcare product maker that announced plans in July to build ethanol fuel projects jointly with a state-owned petrochemical company.

In addition to ethanol, the Haikou plant is expected to produce 20,000 tons of carbon dioxide a year.

The company has leased 4,498 hectares of land in Laos to plant cassava for the facility.

China is the third largest ethanol producer in the world, behind the U.S. and Brazil, according to MarketResearchAnalyst.com (see Coskata enters China ethanol market). Ten of 22 provinces have mandated the use of ethanol-blended gasoline in cars.

But Beijing recently banned the use of grains in fuel ethanol because of concerns about the impact on the food supply (see China considering banning corn ethanol).

The first fuel ethanol plant based on non-grain feedstock in China opened in December. That plant, also China’s first cassava-powered ethanol plant, is located in Beihai, Guangxi.

The facility, operated by a subsidiary of Beijing-based China Oil and Food Corporation (COFCO), is expected to produce 200,000 tons of ethanol and 50,000 tons of cellulosic ethanol annually from 1.5 million tons of cassava.

China's Beihai Gofar Marine Biological Industry (SHA:600538) has also announced plans for a 100,000 ton-per-year cassava-based ethanol plant in the Guangxi region.

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