China Biofuels Annual 2025
The China Biofuels Annual 2025 report reveals a stalled ethanol blend rate, collapsing biodiesel exports, and a strategic pivot to sustainable aviation fuel (SAF). China’s government also removed export incentives for used cooking oil (UCO) and expanded coal-based ethanol production. These changes highlight a significant shift in trade flows and biofuel demand.
2025 Biofuel Snapshot
| Indicator | 2025 Estimate | Key Notes |
|---|---|---|
| Average ethanol blend rate | ~2.1% | E10 coverage unchanged since 2019. Fuel demand is flat as EV use grows. |
| Fuel ethanol consumption | 4.3B L (-11% YoY) | Demand falls as gasoline use declines. |
| Domestic biodiesel | 750M L | Only Shanghai maintains a B5 citywide blend. |
| Biodiesel exports | 1.2B L (-40% YoY) | EU anti-dumping duties range from 10% to 35.6%. |
| SAF consumption | 62.5M L | Export capacity exceeds 3B L, signaling global focus. |
| Coal-based ethanol | 516M L fuel ethanol | Rapid growth threatens grain-based ethanol demand. |
| Tariffs on U.S. ethanol | Up to 80% | Trade restrictions remain high, limiting U.S. access. |
Key Changes in 2025
China’s ethanol blend target remains frozen. Policymakers now focus on “strict control” of corn-based ethanol production. Gasoline demand continues to shrink due to electric vehicle growth. As a result, ethanol use is projected to drop 11% year-over-year.
Coal-based ethanol output is rising sharply. In 2024, production reached 1.2 billion liters, including 436 million liters of fuel ethanol. In 2025, fuel-grade volumes may climb to 516 million liters. This shift threatens bioethanol’s market share.
Biodiesel exports are collapsing. The EU finalized anti-dumping duties in February 2025, cutting shipments by 40%. Monthly flows stabilized near 70 million liters. Southeast Asian demand is helping absorb part of the supply, particularly in Singapore, where marine biofuel blends rose to 30%.
UCO policy also shifted. Beijing removed a 13% export rebate in November 2024 to retain domestic feedstocks. The United States increased tariffs to 45.5%, further reducing China-to-U.S. UCO trade.
SAF is emerging as a strategic focus. China created a pilot zone and approval process for exporters. The first company shipped 16.75 million liters in May 2025, backed by state investment.
Market Implications
The report signals a long-term shift away from grain-based ethanol growth. Rising coal-based ethanol production cuts corn demand from fuel blending. For fats and oils, domestic UCO retention tightens global supply and may raise feedstock costs for renewable diesel and SAF producers in the West.
Meanwhile, China’s growing SAF production capacity—over 3 billion liters—positions it as a potential global exporter. These volumes could pressure credit prices in compliance markets like the EU and California’s LCFS.
Tariff walls keep U.S. ethanol largely out of China. Without political changes, China will rely more heavily on domestic sources and imports from alternative partners.
Takeaways for Hedgers and Traders
- Expect muted grain demand growth from China’s ethanol program.
- Watch UCO flows. Domestic retention policy tightens global feedstock availability.
- Monitor SAF exports. China’s scaling production could influence credit markets worldwide.
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