Stagnating Jatropha Biofuel Development in Southwest China: An Institutional Approach

Abstract

Abstract:Biodiesel from jatropha has been considered as a promising alternative to fossil fuels for some time. Consequently, China started promoting jatropha as one of the options to meet its ever-increasing energy consumption, and the Chinese biodiesel industry also gained interest. However, the excitement of the biofuel industry in jatropha faded after it did not bring about the expected results. This article investigates the stagnation in jatropha development and production for biodiesel in China, using two detailed case studies of jatropha biofuel production in southeast China. It is found that the underdeveloped biodiesel policy and regulation, such as a rather late formulation of standards for biodiesel (especially the B5) and the absence of mandatory targets, is an important reason for hampering jatropha development. Besides that, lack of financial support undermined sustained jatropha planting at the farm level and lack of sustained commitment from state-owned enterprises or private companies over a long time span further contributed to jatropha project's failure. Better implementation of the rule of law, mandatory blending requirements, hazard insurance, as well as continuous financial support, might improve the continuation of jatropha plantation schemes.

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“…Since 2010, the global consensus is that jatropha has been a failure (Kant and Wu, 2011;Nielsen et al, 2013). This disappointment has been documented for India (Ebrahim and Baker, 2012a;Kumar et al, 2012), China (Ebrahim and Baker, 2012b;Li et al, 2014b), Tanzania, the rest of East Africa (Kant and Wu, 2011;Ebrahim and Baker, 2012c), and the Southern Africa (Slingerland and Schut, 2014;Von Maltitz et al, 2014).…”

“…This included national planting targets, blending targets, subsidies, tax relief or exemptions, and technological research and demonstration projects Li et al, 2014b). The total jatropha planting target was 1.67 million ha on barren hills and wastelands over the next 10-15 years at Yunnan, Sichuan, and Guizhou of the Southwest China (Wu et al, 2010).…”

“…In China, the farmers received subsidies for each hectare of jatropha plantation (Wang, 2012), although only for the first year. Price guarantees for the purchase of jatropha seed were also available (Li et al, 2014b). Subsidies could also be obtained for the construction of jatropha refineries (Wang, 2012;Li et al, 2014b).…”

“…Price guarantees for the purchase of jatropha seed were also available (Li et al, 2014b). Subsidies could also be obtained for the construction of jatropha refineries (Wang, 2012;Li et al, 2014b). Subsidies for jatropha in the first year were available in Mexico per ha planted as jatropha was classed as an afforestation species (CONAFOR, 2009).…”

“…Under-developed biodiesel regulation and policies, late formulation of standards, and the absence of mandatory targets substantially contributed to the overall disappointment. In India and China, jatropha biodiesel targets were not mandatory and blending targets were introduced late (2011) while the renewable energy policy was implemented in 2005 (Li et al, 2014b). A similar mismatch in timing occurred in Mozambique (Slingerland and Schut, 2014).…”