Biodiesel is "on the road" a bit difficult

â—† Economic Reporter Liu Yong Jinan reports

Recently, Sinopec (6.05 -0.33%, diagnostic stock) gas station raised the cooking oil waste biodiesel (B5) launching ceremony was held in Shanghai, this is the first time that biodiesel made from waste oil from kitchen waste enters refined oil products in China. Terminal sales market. This move means that domestic biodiesel has opened the door to the refined oil market, and biodiesel can be pushed to the society through certain channels.

However, the Economic Herald reporter found in the survey that biodiesel manufacturers are not “cold”. The biodiesel enterprises in many places in Shandong are struggling on the line of life and death, and many have even stopped working, and some are exploring the path of deep processing and survival. The policy is not clear and the capital is “disgusted”, making it difficult for these companies to grow and develop.

Industry insiders interviewed by Economic Herald reporters said that blending biodiesel with fuel for vehicles has become a global trend. Although the problem of mandatory biodiesel addition in China remains unresolved, pollution control still leaves a door for biofuel companies.

Can achieve emission reduction

A few days ago, Shanghai Petroleum selected two gas stations as pilot stations, and fixed the site for the city's transportation system and specific industry vehicles with biodiesel. After a phase is run, it will be evaluated and then gradually opened to social vehicles. During the pilot period, the retail price of B5 biodiesel was 5% off the price of motor diesel, with a discount of 0.30 yuan/liter, encouraging more social vehicles to use biodiesel.

"Biodiesel is a kind of real green diesel, which can achieve the effect of reducing emissions." Li Rongguang, general manager of Dezhou Rongguang Biotechnology Co., Ltd., said in an interview with the Economic Herald reporter that "it uses the waste oil and waste oil as the main raw materials." It is a clean renewable energy source, and it can be said to be a good substitute for petrochemical diesel."

Yue Xiaochuan, head of a biodiesel company in Zibo, said in an interview with the Economic Herald: "Biodiesel has the same indicators as petrodiesel. The use of biodiesel fuels emits only 10% of the toxic organic matter in the tail gas. The particulate matter is only 20%, the carbon monoxide emission (with catalyst) can be reduced by 95%, and there is no emission of sulfur dioxide and lead, which has a good effect on reducing air pollution."

It is understood that biodiesel has the performance of No. 0 diesel, and China's "Renewable Energy Law" has also confirmed its legal status. But the reality is that biodiesel has never been able to enter the sales network of PetroChina and Sinopec through legal channels. Most of the manufacturers are looking for sales channels themselves.

Zhang Wenfeng, the head of a private gas station in Jinan, told the Economic Reporter that “although there is a cost advantage, there is no biodiesel added in the upstream, and we are even less able to add it ourselves.”
The benefits of biodiesel are quite high. However, the vacancy rate of equipment in many manufacturing companies is quite high, and even some companies have stopped production. "At present, the company's equipment operating rate is relatively low. The design capacity is 100,000 tons per year, but in fact, half of the daily production capacity can not reach 100 tons." Yue Xiaochuan said that mainly because of shortage of raw materials, glory It has also been discontinued before.

The same problem plagues other biodiesel producers. “Biodiesel? We haven't produced it for a long time.” A staff member of the Zibo Biodiesel Factory told the Economic Herald reporter on the phone that the main reason was that raw material prices skyrocketed and could not be received.

“There are about 30-40 biodiesel manufacturers in North China, with a production capacity of about 1 million tons. The actual production is very low. The operating rate of this year is also less than 20%.” Zhuo Xin, a biodiesel analyst at Zhuo Chuang Information, told the Economic Reporter that many companies Like the Zibo Biodiesel Plant, in the case of rising raw material prices and insufficient supply, the production was suspended and semi-discontinued. Most of the still-surviving companies are also on and off, and have to switch the biodiesel they produce to the chemical sector, such as diesel aromatics and methyl epoxide.

The most embarrassing is the working capital

"The cost is not high, and sometimes it can't be closed, and the start-up can only be intermittent." Liu Fei, deputy general manager of a biodiesel company in Jinan, said that the shortage of biodiesel raw materials has always been a major problem facing the market.

At present, most domestic biodiesel manufacturers use waste oil as raw material, and the price of the waste oil to the destination is about 3,500-3,600 yuan/ton, and 1 ton of raw material can produce 70%-80% of biodiesel, so that 1 ton is produced. The raw material cost of biodiesel is about 4,600 yuan, plus equipment loss, methanol , catalyst, coal, electricity, water and labor costs. The cost of producing 1 ton of biodiesel is about 5,400-5,500 yuan, plus raw material supply. Insufficient, many companies have a daily output of only 20-40 tons, and the net profit is negligible.

Liu Fei is very optimistic about the biodiesel market, and hopes to purchase a set of equipment with an annual output of 250,000 tons by introducing capital. "Although the idea is very good, the equipment for launching this time is still only a dream. No money, although I have looked for a few VCs and PEs to investigate, but it was eventually rejected." Liu Fei said.

“Almost all biodiesel companies are small and medium-sized micro-private enterprises with very limited funds.” According to Liu Fei, the most stable production of biodiesel companies is liquidity. “And, subject to capital constraints, biodiesel companies The scale is not big, the scale is not going up, and management can't keep up with development."

Liu Fei told the Economic Herald reporter that he intends to use the power of the capital market, but ultimately failed. Since the raw materials for the production of biodiesel are collected in hundreds of restaurants, the collection process is cash transactions, and it is almost impossible to issue invoices, so it is impossible to leave traces of funds.

Regarding the issue of input invoices, Li Rongguang also quite felt that “without input invoices, enterprises cannot enjoy the national tax incentives, and production is still facing legal risks.”

“For brokers or investors, if they do not see the traces of capital flow, they will think that there is a great risk. At the same time, due to the source nature of raw materials, the vast majority have no invoices, which regulates the financial management of enterprises and obtains relevant Preferential support is extremely unfavorable," Liu Fei said.

Hope to support

Liu Fei told the Economic Reporter that on the technical level, China's biodiesel production research does not lag behind developed countries in Europe and the United States, biodiesel production enterprises in process technology and equipment, comprehensive utilization of resources, clean production, environmental protection and fire safety, etc. The aspect has reached the domestic advanced level, and the yield of biodiesel products (in terms of convertibles) has reached more than 90%.

In Yue Xiaochuan's view, although the country has introduced the corresponding BD100 and B5 standards, these two standards are not mandatory, but a recommendation standard. "As far as China's current biodiesel production is concerned, it is impossible to pose a threat to petrochemical enterprises. Therefore, the state should have policy support for the promotion of biodiesel in gas stations."

At the end of 2016, the eight ministries and commissions jointly issued the "Announcement on the National Comprehensive Supply of Compulsory Standard Vehicle Oils in the Context of the Fifth Phase", which has clearly promoted the joint promotion of V diesel and B5 diesel. In addition, the “13th Five-Year Plan for Biomass Energy Development” pointed out that the market will be closed to promote demonstration and promote the application of biodiesel in the transportation field. The Biodiesel Industry Development Policy also pointed out that it encourages closed promotion and determines the area and time of promotion.

Yan Jianmin, a professor-level senior engineer at the Sinopec Research Institute of Petrochemical Technology, said that “the National Standards Committee will issue a mandatory C5 standard for biodiesel”, and the biodiesel BD100 is an appendix to the mandatory standard, and its content is mandatory.

It is worth noting that the pilot work in Shanghai has brought opportunities to biodiesel companies in the “ditch oil” system, such as cost control of biodiesel enterprises and transportation of winter products.
“The practice in Shanghai provides an important example for addressing the shortage of biodiesel raw materials.” Zhang Yuxin said that to ensure the sufficient raw materials for the biodiesel industry in China, we must first establish a sound raw material collection system and form a relatively stable raw material supply system.

“The trial of Shanghai biodiesel gas station means that the recycling of 'ditch oil' is a key step. Perhaps with the support of the national oil company, it can gradually explore and establish a raw material supply mode that suits the characteristics of the market. Industry policy and downstream sales model to promote large-scale production in the industry." Zhang Yixin analyzed.

In the view of Liu Fei and Yue Xiaochuan, the substantive actions from the State Council to Shanghai can clearly feel that after more than ten years of development, the policy environment for the healthy development of China's biodiesel industry is rapidly in place, and the industry's development The turning point came quietly.

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