China gives go-ahead for three biodiesel plants

BEIJING, July 14 (Reuters) - China's top planning body has approved construction of three state-owned biodiesel plants, with total annual capacity of 170,000 tonnes, using jatropha oil as feedstock.

PetroChina's (0857.HK: Quote, Profile, Research) Nanchong refinery in southwest Sichuan province would build a 60,000-tonne-a-year plant, while Sinopec Corp (0386.HK: Quote, Profile, Research) would build one in Guizhou with annual capacity of 50,000 tonnes, the National Development and Reform Commission said.

Top Chinese offshore oil and gas producer CNOOC Ltd (0883.HK: Quote, Profile, Research) would build a 60,000 tonne-a-year plant in the southern island province of Hainan, it said.

It did not give an investment amount or say when the plants would be completed. All three would use jatropha oil, vegetable oil produced from the jatropha scrub plant, as feedstock.

The commission said it hoped the three oil giants would share their experience in production, sales and management for future expansion of the industry.

The planning body did not say when the country would mandate the use of biodiesel in cars.

China's active biodiesel plants are almost all private and use waste cooking oil as feedstock, including the country's largest Gushan Environmental Energy Ltd (GU.N: Quote, Profile, Research), China Clean Energy Inc (CCGY.OB: Quote, Profile, Research) and China Biodiesel International Holdings Co. Ltd (CBI.L: Quote, Profile, Research).

China Clean Energy Inc said it had halted biodiesel production since March, as Beijing-regulated diesel prices made the biofuel unprofitable after waste cooking oil prices surged 40 percent, in line with edible oils prices.

China has set a target to use 200,000 tonnes of biodiesel by 2010 and 2 million tonnes by 2020 to ease its dependence on imported crude.

(Reporting by Niu Shuping; Editing by Anne Marie Roantree)