Fuelling the Future

Economic News

22 Jul 2010
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On May 24, CPC Corporation, Taiwan (CPC) and Taiwan Fertilizer announced they would form a join venture to produce ethanol fuel. W Pan, chairman of CPC, said the details of the joint venture would be formally announced in June. Local media reported the ethanol production facility is planned to be online sometime in 2010 and will produce around 100,000 kilolitres (Kl) of ethanol fuel per year.



By the end of this year, the government will start a trial requiring all government-owned motor vehicles in Taipei to use gasoline that contains 3% ethanol, known as E3. By January 2009, the government will encourage private and public motor vehicle owners to use ethanol fuels in Taipei and Kaohsiung, Taiwan's second largest city.



Minister of Economic Affairs Steve Chen said the ministry plans to require fuel suppliers to add 1% of ethanol to gasoline next year. By 2011, petrol stations will be required to supply E3 gasoline alongside regular gasoline.



The government has set a goal for 2010 to use 1m Kl of biofuel ethanol and 100,000 Kl of biodiesel and then 3m Kl of ethanol and 150,000 Kl of biodiesel by 2015. Taiwan's total motor vehicles demand for fuel in 2005 was 11m Kl of gasoline and 4m Kl for diesel.



CPC has a network of 1200 filling stations throughout Taiwan and its commitment to biofuels should help speed up the government's biofuel policy. According to reportsCPC will be opening eight ethanol filling stations in Taipei this summer.



Biofuels are solid, liquid or gas fuels derived from biomass and are often used as fuel for transportation. Biodiesel specifically is a diesel substitute that is partly produced from biological matter such as vegetable oils that can be used in conventional diesel engines. Ethanol fuel is an alcohol fuel that can be produced from wheat, sweet potatoes, corn or sugar cane.



The main drawback in using biofuels is the cost, which is about 5% more than ordinary petroleum products. Yeh Huey-ching, chief of the bureau of energy under the ministry of economic affairs, said in April that at a cost of NT$30 ($0.90) per litre, ethanol gasoline is more expensive than gasoline so the ministry will draft a bill to help subsidise the cost.



Officials from the ministry of economic affairs said that using biofuels could help reduce the country's dependency on fossil fuels as well as lower greenhouse gas emissions. This comes at a time when approximately 98% of the island nation's energy supplies are imported.



In 2006, the government earmarked $9.15m to facilitate research and development on biofuels as part of its effort to lower national consumption of hydrocarbon-based products.



In an interview on May 22, Pan told OBG, "Development of biofuel is a response to a global concern about greenhouse gas emissions. It is also the main energy policy of Taiwan's government. As a state-owned company, CPC has studied the application technology of biofuels, such as availability of raw material, blending, storage and distribution, and marketing for a long time."



Pan said the use of biofuels in Taiwan would be an incremental process so would not have an immediate impact. "The implementation of the development of biofuels will be carried out gradually by stages. The goal will be to have full scale of supply of 3% ethanol in gasoline and 2% of biodiesel in diesel in the year of 2011."



The ministry of economic affairs is encouraging private companies to get involved with biofuels including biodiesel. In Changping Industrial Zone in Changhua Province, there are currently six private firms that have set up ethanol plants.



CPC is a state-owned business employing 14,725 people and is responsible for the development and supply of petroleum and natural gas in Taiwan. There are plans for the company to be privatised but they have been delayed in the past due to a failure to reach an agreement with the labour unions.



CPC was established in Shanghai in 1946. Much of the company moved to Taiwan during the civil war that ended in 1950. The part that remained on the mainland formed the national oil companies in China and CPC works with many of them today, including joint projects to explore oil and gas reserves in the Taiwan Strait.



Taiwan Fertilizer was a state-run enterprise until 1999 when it was privatised and it is now listed on the Taiwan Stock Exchange. It supplies various chemical and fertiliser products including chemicals for the booming LCD industry in Taiwan.

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