Trade and markets


China (Mainland)
Commodity Group
Policy Category
Consumption and marketing
Policy Instrument
Renewable energy policy
Published new policy guidelines for the development of the country's biodiesel industry, with the overall objective of promoting domestic biodiesel consumption while protecting local resources.
China’s National Energy Administration published new policy guidelines for the development of the country’s biodiesel industry. The guidelines’ overall objective is to promote biodiesel use while protecting local resources. Reportedly, priority will be given to areas with the greatest air pollution problems. Attention is also given to the implementation of enhanced market regulations and to sustainable raw material supply systems. Apparently, waste and non-edible products (such as wood- and grass-biomass) will be favoured over edible vegetable oils for use as feedstock. The new policy also focuses on (i) encouraging engine manufacturers to develop improved diesel motors for biodiesel usage, (ii) promoting corporate social responsibility, and (iii) improving recycling laws. New industry standards, including restrictions on energy and freshwater use and on waste disposal, are expected to lower the environmental impact of biodiesel production. Furthermore, biodiesel producers will enjoy tax advantages, and foreign investments into China’s biodiesel industry will be encouraged. Interestingly, the government does not envisage to use mandatory blending requirements and direct production subsidies to strengthen the biodiesel sector. Reportedly, industry representatives raised questions about the implementation of the new guidelines at the local level. They expressed concern that provincial administrations could continue to lack clear targets and the required authority and stated that biodiesel producers would likely continue to suffer from feedstock shortage.