Biofuels push to help clear the air

Analysts say Sinopec's decision to increase its involvement in the biofuel market marks a significant shift in strategy.

Biofuels, although desirable from an environmental point of view, are more expensive than traditional fuels such as diesel and petrol.

China's push to promote biofuel as an alternative fuel is tempting companies from various industries to compete for a larger share of the world's fastest-growing new energy vehicle market.

According to the IEA, biofuels for transportation, including ethanol and biodiesel, have the potential to replace a substantial amount of petroleum.

Venkatachalam Anbumozhi, an economist with the Economic Research Institute for ASEAN and East Asia and an expert on energy policy, said biofuels in Asia, including China, are mostly driven by external factors such as the global oil price.

"What Asia needs to do is differentiate and distinguish between first-generation biofuel－that is biofuels made from agricultural feedstocks, vegetable oils and animal fats－using conventional technology, and to speed up the development of second-generation biofuels made from non-food stocks and wood waste, micro-algae or other technologies," he said.

Another factor that has been thrown into the transportion/energy mix is the focus on electric vehicles.

Zhai Yongping, technical adviser on energy in the sustainable development and climate change department at the Asian Development Bank in Manila, said, "Biofuels should have a place in the overall global energy mix, especially in the transport sector, but they have been slow to take off.

"Having said that, some countries－China, the United States and Brazil, most notably－are doing better than others when it comes to biofuel technology and production."

Zhai said that when the global price for oil was at $100 a barrel, biofuels were an economic substitute for oil, especially in the transportation sector.

"Even at $70 a barrel, it is still a good proposition," Zhai said.

"Since we started to take biofuels seriously, we have also seen the focus on electric vehicles and battery technology, which has overshadowed biofuel."