The Chinese port city of Tianjin will use gasoline with ethanol in most vehicles by end of September, the first provincial government to officially implement the new policy to use of ethanol in gasoline nationwide by 2020.
Tianjin is expected to use 260,000 tons of fuel ethanol each year if that 2020 goal is realized, the equivalent of about 780,000 metric tons of corn
China announced last year that it plans to use gasoline blended with 10 percent ethanol nationally by 2020 to reduce burdensome government-owned corn inventories and clean up air pollution. China currently produces less than 2.5 million tons of ethanol a year, but the new policy could increase demand to 15 million tons of ethanol or 45 million tons of corn.
Ethanol plant construction is ramping up as companies align themselves with government policies to produce more of the corn-based fuel. Long-term corn import demand will rise, increasing the importance of improving U.S./Chinese trade relations. Last month, the government indicated moderate imports including U.S. supplies will be needed since corn production is in the north and ethanol plants are located in the south.