China's Gasohol Promotion Jeopards MTBE Industry

SCI99 Edit at: 2017-9-14 14:39:45
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China will promote the use of the ethanol gasoline across the country, achieving full coverage by 2020, according to a document released by authoritative departments on Sep 13. This document was jointly issued by National Development and Reform Commission (NDRC), National Energy Administration, the Ministry of Finance and other 12 ministries and commissions

Fuel ethanol, as an important component content in gasoline blending, has great performance in dynamic boost and emission reduction. The biofuel ethanol obtains octane number at 111 and the oxygen content at 34.7%. The great performance indicates the biofuel ethanol is the direct alternative to the MTBE in the gasoline blending. In previous, the high price of the biofuel ethanol blocked the promotion, but now in line with the policy, the advantage of the MTBE is shrinking.

China’s MTBE capacity was 19.05 mn t in 2016, and the output was 11.47 mn t. The overcapacity is severe, while another 3.77 mn t of newly-added capacity will be put into use in the next few years. Meanwhile, China’s gasoline consumption reached 120 mn t in 2016, and the gasohol consumption reached 27.5 mn t, taking up 22.9% of the total gasoline consumption. As estimated by SCI, the gasoline consumption will reach 160 mn t in 2020, and the potential demand for biofuel ethanol will reach 16 mn t if mandated.

As a direct alternative to the MTBE, the nationwide promotion of the gasohol will bring huge crisis and challenge to the MTBE industry. China’s fuel ethanol production capacity will not fulfill the demand, and the growth will be relatively slow, considering the potential demand. Thus, the MTBE industry still has time to adjust and redistribute for the new era.

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