Beware the "win-win" campaign that promises to make money for companies while eliminating poverty.
China's State Council is preparing a big plan to plant oilseed-bearing trees on sloped land, salinized land, and wetlands they plan to remove from grain production. The plan calls for planting oil-bearing trees like tea oil, walnuts, a type of almond, oil peony, maple and sumac on 200 million mu (about 33 million acres) of land by 2020, with a planned output of 5 million metric tons of edible oils. This will utilize land not suitable for grain production and reduce imports of edible oils, says the draft document.
In a common pattern, China is again basically rehashing similar plans formulated in the last decade. In the mid-2000s, a cabal of Chinese authorities, multinational companies and State-owned Chinese companies formulated big plans to produce biofuels by growing starch, sugar or oil-bearing crops to be used as raw material. The most prominent were sweet sorghum, cassava, sweet potatoes and jatropha--all portrayed as costless sources of energy since they would use raw material grown on land unsuitable for food crops.
This blog reported on an early flame-out of sweet sorghum for ethanol in 2008. Farmers were induced to grow the crop, but the companies promising to buy it ran out of cash and disappeared. In 2007, a plan was announced to construct a refinery in Guangxi Province to make 200,000 metric tons of ethanol from cassava planted on 1.4 million mu of nearby land. Since the refinery began operation, China's imports of cassava have spiked--initially from southeast Asia and now from Africa.
Another big failure was jatropha, a bush that produces fruit with a seed that has high oil content. The oil is inedible but can be processed to make biodiesel. A decade ago, there were grand plans to grow jatropha across wide swathes of Asia and Africa, but Bloomberg Business Week reported on its spectacular failure.
A Chinese reporter asked why Sichuan Province's grand jatropha plan had never "caught fire." The plan left behind nothing but empty plans, debts and hillsides covered with untended trees. In 2006, the Ministry of Science and Technology designated Sichuan as a "demonstration province" for industrializing biotechnology. A crash plan was set to plant jatropha trees on 1.8 million mu (nearly 300,000 acres) in Sichuan by 2010, and 9 million mu by 2020. American and British companies and PetroChina announced a 20-billion yuan investment plan for Sichuan's jatropha industry. A refining plant was built to process the oil into biodiesel fuel 500 kilometers away in Jiangsu Province's Nantong City (presumably to export it to Europe).
The American company disappeared, and the British company withdrew by 2006. Jatropha-planting stalled and only about 200,000 mu were planted. There was no cash to tend the trees, and many died. The Nantong refinery was idle due to lack of raw materials. The jatropha trees bear little fruit--although they produce lovely flowers, most are male and never develop fruit. The trees were planted on land that lacked water in normal times. To compound problems, southwestern China experienced several years of severe drought, so water availability was worse than usual.
The Sichuan article reports on a jatropha investor who got subsidies of 5 million yuan and borrowed 7 million yuan from banks to plant 30,000 mu of trees. In 2011, only 1000 mu were bearing fruit--about 50 kg per mu--and sales totaled about 100,000 yuan. Li has annual expenses of 500,000 yuan to support 15 permanent employees, many temporary workers and transportation (but not including interest on bank loans). His company reportedly loses 400,000 yuan annually. The project promised great returns but only loaded him down with debts.