To meet the ever increasing demand for ethanol gasoline for vehicles in Northeast China's Heilongjiang Province, officials are planning on transforming 345,000 tons of stale grain into the fuel additive.

The grain is out-of-date and inedible and had been kept in storage in numerous barns.

Since November 1, all petrol stations in the province have been ordered to provide ethanol-enhanced gasoline.

The army, the national reserves and some special industrial users have been exempted from the order.

Statistics from the Provincial Ethanol Fuel Promotion Office show that promotional work to encourage ethanol fuel use is so far running smoothly.

Daily sales of ethanol-enhanced gasoline has reached nearly 3,000 tons in the province.

More than 90 percent of the petrol stations in the province have finished with reconstruction efforts so that they can supply the new fuel, and it has taken a firm footing in the market, accounting for nearly 90 percent of all gasoline now sold.

The country's northernmost province is the largest grain production base in the nation.

This year, total grain output reached more than 31 billion kilograms, hitting a record high.

But not all grain can be sold and years of bumper harvests have accumulated huge amounts of stored surplus.

"It takes a lot of money to preserve extra grain every year and a considerable amount is going bad," said Pan Sheng from the Heilongjiang Provincial Grain Bureau.

"To change it into alcohol is certainly one of the best ways to make use of it," he said.

"The move can help readjust the energy consumption structure of the province."

"It is also good for the development of agriculture and environmental protection," he said.

Ethanol-enhanced gasoline for vehicle use is a kind of mixed fuel obtained by adding certain amounts of alcohol into the ordinary gasoline.

China Resources Alcohol Ltd is one of the four companies and the only one that is assigned by the State to produce the additive in Heilongjiang Province.

It is now producing more than 100,000 tons of fuel alcohols used in the province.

It will take an average of 3.3 tons of grain, mainly corn, to produce 1 ton of ethanol.

Thus, the 345,000 tons of grain will produce more than 100,000 tons of ethanol, basically meeting the province's demands for ethanol for a year, according to estimates by the promotions office.

It only takes the amylum in corn to make ethanol. The other parts of the corn can be used to produce animal feeds, additive and fertilizers.

The price of ethanol gasoline in the province is now the same as the ordinary gasoline and is allowed to fluctuate within a certain range, according to a statement released by the National Development and Reform Commission.

But the cost of ethanol gasolines is comparably high because of the more complicated producing process.

The company is exempt from the consumption tax and enjoys a subsidy of 1,800 yuan (US$217) per ton from the country.

"Although the price is not raised, we still have considerable profit margin," Yu Wanshui, vice-manager of the company was quoted by the People's Daily as saying.

(China Daily November 29, 2004)