BEIJING/CHICAGO (Reuters) - China’s ambitious push to use biofuel in cars nationwide by 2020 is in doubt amid concerns about supplies of raw material such as corn, complicated by an escalating trade dispute with Washington, producers and analysts say.






In September last year, the government outlined radical plans to roll out the use of ethanol in gasoline nationally by 2020, in part to digest its huge corn stocks.

State-controlled producers, like China’s State Development & Investment Corporation (SDIC), agribusiness COFCO and Jilin Fuel, rushed to draw up plans to invest billions of yuan to double output in the world’s largest car market.
But since then, only one major project - SDIC’s 300,000 tonnes per year plant in Liaoning province in China’s northeast - has received the go-ahead to start construction.

Three big expansion plans by major producers are stalled because the companies haven’t got approval from the government, three sources with direct knowledge of the situation say. They declined to be named as they are not authorized to speak to the media.

The government has not revised its timeline or commented publicly on a change in policy.


But executives at two producers, three policy experts and market analysts say the drawn out approval process and project delays suggest Beijing is quietly rethinking its initial plans.

The slowdown comes as a brewing trade dispute with the United States intensifies, raising the threat of further tariffs that could make imports of U.S. corn or ethanol to meet any shortfall in domestic supplies uneconomic.

“The plan was too ambitious and will have a huge impact on the whole industry chain. It was too big a step forward. There might be change to the policy,” said Michael Mao, analyst with Zhuochuang, a consultancy based in Shandong province.

The Commerce Ministry, Ministry of Agriculture and Rural Affairs and the National Development & Reform Commission did not respond to requests for comment.

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