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On the 19th of this month, international oil prices broke the 100 yuan mark for the first time. By the 20th, the March crude oil futures on the New York Mercantile Exchange closed at $100.74, with the contract hitting a record high of $101.32. As oil prices continue to rise, the development of biodiesel—particularly using tung oil as a raw material—has become more urgent than ever. However, is China ready to accelerate biodiesel production and reduce its reliance on crude oil? Industry experts believe that the development of the tung oil industry should be an essential part of the country’s energy strategy. At the same time, long-term planning and policy support are crucial. Most importantly, the establishment of national standards for biodiesel must be prioritized.
In contrast, countries like the U.S., Japan, and Germany have already taken significant steps in developing their own biomass energy sectors. The U.S. has classified biodiesel as a key clean energy initiative, with no taxes applied to it, and annual production capacity reaching 300,000 tons. Japan produces around 400,000 tons annually, while Germany leads globally in both production and consumption, with over 300 biodiesel stations nationwide. In Germany, biodiesel is also tax-free, setting a strong example for other nations.
In September 2006, China issued the "Implementation Opinions on the Development of Bio-energy and Bio-chemical Support Policies for Finance and Taxation." This policy outlined four key measures to support biomass energy: establishing a risk fund system with flexible loss subsidies, providing subsidies for raw material bases, offering project model support, and implementing tax incentives. These policies have created a favorable environment for the growth of the biomass energy sector in China.
As China's dependence on imported oil continues to grow, energy shortages have become a major challenge for sustainable economic development, even threatening national industrial security. Some regions have already started large-scale planting of paulownia trees, and many industry experts recommend promoting the cultivation of tung trees. Developing national biodiesel standards is seen as a critical step to reduce oil dependency.
However, China currently lacks a unified national standard for biodiesel. Without such standards, the quality of biodiesel produced from various sources could vary widely. Moreover, if other countries establish quality benchmarks first, China may find itself playing catch-up. In addition, there are several challenges in the production of tung oil. Professor Xu Jihong from Yunnan University points out that different regions produce varying qualities of tung oil, making it essential to identify and cultivate high-quality, adaptable strains. Many of the existing tung trees in China are wild seedlings that have not been properly domesticated, which poses risks for large-scale planting. Additionally, the true cost of cultivating paulownia has not been fully calculated, and the input-output ratio during management will play a vital role in the industry’s future success.
In conclusion, while biodiesel holds promise, it is still early days for China to rely on it to alleviate rising oil prices. There is much work to be done. Experts suggest that the government should increase investment in tung tree cultivation. Although the economic returns might not be immediately impressive, the long-term strategic, ecological, and social benefits make it worthwhile. Government agencies should quickly implement supportive policies—such as investment incentives, pricing controls, tax relief, and subsidies—to help build a complete biodiesel production, blending, and distribution system. Encouraging participation from large energy companies and private enterprises will be essential to achieving this goal.