In China, the central government will plant more than 15,000 acres of Chinese pistache trees as biofuel feedstock in Hebei province, relying on their tolerance of drought and low-fertility soil, and the 40 percent oil content of their seeds.

Overall the seven regions designated by the State Forestry Administration (SFA) in 2006 to grow biofuel demonstration forests (Hebei, Anhui, Hunan, Sichuan, Yunnan and Shanxi provinces and Inner Mongolia Autonomous Region) will cultivate a total of 830,000 acres of Chinese pistache, jatropha, yellowhorn and Wilson’s Dogwood by 2010. Hebei’s overall plan is to grow more than 1.7 million acres of biodiesel forest to provide more than 500 Mgy of biodiesel.

The Chinese Ministry of Agriculture had announced last month that it is reviewing the land allocations for biofuels crops, with clear indications that food would be given priority over fuel. COFCO, operator of a 200,000 ton ethanol plant in Guangxi, is seeking feedstocks from Vietnam and Thailand. But biodiesel producers, who depend largely on non-food crops, expect to be largely spared from curbs on production.

The Ministry of Finance recently announced policies to promote the production of biofuels from non-food feedstocks. The subsidies will be flexible, and tied to the price of crude oil. Farmers will receive up to $878 per acre planted with forest products for biofuels, and up to $791 per acre for crops planted for biofuels.

China has recently announced abandonment of ethanol projects that use foodstocks, excepting existing plants and those already under construction. China is the third-largest ethanol producer, behind Brazil and the US.

The expansion takes place under the auspices of China’s Green Poverty in Reduction program which was launched in 2006. The $8.5 billion project is a joint venture between the United Nations Development Programme (UNDP), China’s Ministry of Science and Technology and the Ministry of Commerce. The project aims to develop biofuels and other eco-friendly projects in China’s poorer western provinces.