Of ethanol and methanol, which is more suitable for China's car industry's new energy strategy? For a country as large as China, different regions will have to find different solutions. Shanxi and Jilin are perfect examples of this; Shanxi coal is abundant, making methanol production convenient, while Jilin is an agricultural province that could more easily pump out ethanol.

Forget European Diesel, Spotlight on Brazil

Brazil has vast sugar cane resources. Starting in the 1970's, the Center for Sugarcane Technology in Sao Paulo, which was founded with funds from the industry, had already begun research into the large-scale utilization of ethanol fuel. Today, in a country with a population of 185 million, every last gasoline pump must contain at least 20 percent ethanol in their hybrid gasoline. Ethanol has already taken the place of 40 percent of Brazil's gasoline consumption, with some cars running on 100 percent. There, the price advantage of using ethanol is huge-- each liter is ＄53, compared to gasoline's ＄99. Today, Brazil is the world's largest exporter of ethanol.

China has begun to explore the Brazil model. Starting in April 2001, the central government promulgated national policies pushing the use of ethanol and establishing four alcohol manufacturing facilities, with Henan, Heilongjiang, and Jilin being named as pilot provinces. But while ethanol is being pushed in these provinces, the gasoline only contains 10 percent of it. Substitution is still limited.

Because of current fluctuations in international oil and ethanol prices, the mixing ratio for gasoline can't be set at any specific number. Volkswagon was the earliest to put out a fuel-flexible car in Brazil, with GM, Ford, and Mistubishi, soon following suit. What's special about these vehicles is that you can add up to 85 percent ethanol to the gasoline. Volkswagon believes that the most difficult policy decision facing countries today is how to start the intermediary phase of bio-fuel use. China is pondering this now, with results-- at the Shanghai car show, Chery put displayed their own fuel-flexible car.

Now, at least nine pilot provinces have started adding ethanol to gasoline. Other provinces have their own plans. And support for the use of methanol (formerly known as coal-to-oil fuel) is becoming more and more vocal.

Shanxi is the most stalwart proponent of methanol. As early as 2003, cars in Shanxi's Datong, Linfen, Jinzhong, and Taiyuan cities began using gasoline that contained 15 percent methanol and 85 percent gasoline. Methanol sold to Sinopec went for 1,800 yuan a ton, making its price superiority over ethanol obvious-- the cost to produce an equivalent amount of traditional fuel is in the range of 4,500- 5,000 yuan.

The highest government organ in Shanxi's methanol substitution project-- the Shanxi Province Fuel Methanol and Methanol Car Work Group-- had been established as early as 2001. The Group's director is the governor of Shanxi and has appointed two vice-directors, highlighting the determination of the Shanxi government in promoting methanol.

On the eve of the Shanghai car show, the Shanxi government had just released "Regulations on Promoting Methanol Fuel and Methanol Cars". The rules compel the sale of methanol at gasoline stands in Shanxi. The original 90, 93, and 97 gasolines will be integrated into one M15 methanol gasoline with a methanol ratio of 15 percent.

Sun Maohua, president of Shanxi Huadun Group Limited and participant in the drafting of the Rules says that M15 is equivalent to 90 gasoline and can be used by general vehicles without any changes to their motor. Recently, the marketing of M15 ethanol gas has already spread to all parts of Shanxi, though its use hasn't been forced. Local M30, M85, and M100 methanol gas standards have not been published. Only in Taiyuan, Yuncheng, Changzhi, and Linfen have the trials started.

Aside from Shanxi, Sizhou and several other provinces are experimenting with methanol. If this is the case, then which will end up being more suited to China's fuel war? Wang Hewu, professor of Qinghua University's automobile engineering department, reiterates, "For a country as large as China, alternative energy must be tailored to the locale. Shanxi's coal resources are abundant, so methanol is ideal. Meanwhile, Jilin's agricultural industry makes ethanol production particularly favorable. One must look at the reality of the situation in order to decide."

First published on 4/23/07