By Wu Ping, Member of the Research Team on "Evaluation of the Implementation Effect of Biodiesel Industrial Policy and Countermeasures", Research Institute of Resources and Environment Policies, DRC

Research Report No.63,2016 (Total 4946) 2016-5-19

Abstract: Biodiesel is a bio-liquid fuel with waste oil and oil-bearing crops, like "gutter oil", as raw materials. The development of biodiesel industry is of great significance as it can stop the process of turning gutter oil into cooking oil, optimize energy structure, control air pollution, decrease haze and effectively solve the problem that it is difficult for low-quality oil to withdraw from the market. In recent years, many countries have formulated the industrial development policies to promote the development of biodiesel industry through raising the mandatory blend level of bio-fuel in diesel oil as well as relevant fiscal and taxation supporting measures. At present, with the continuing decline of international oil prices, oversupplied diesel oil, the obstruction for the sale of biodiesel in refined oil market, as well as the insufficient support by fiscal and taxation measures, the biodiesel enterprises have suffered serious losses, leading to the close down of nearly 90% of the enterprises and increased risk of turning gutter oil into cooking oil again. Therefore, it is suggested to establish a national coordination mechanism, and pilot demonstration areas for biodiesel application; raise the compulsory blend level of bio-fuel in diesel oil, and establish the technology innovation system for the whole biodiesel industrial chain; lower the standard for receiving fiscal subsidy and increase the degree of tax preference; strengthen the supervision on the processing of gutter oil, develop oil-bearing crops and energy forests to ensure the supply of raw materials, and promote the sustainable development of China's biodiesel industry.

Key words: biodiesel, demonstration area, mandatory blend