TMO Renewables Enters Joint Testing Programmes in China

Monday, May 09, 2011

Leading Chinese corporations, COFCO and CNOOC, select TMO as second generation ethanol technology partner

9 May 2011:  TMO Renewables Ltd, a leading developer of a new process for converting biomass into fuel ethanol is proud to announce that it has been selected to be the technology partner of two major organizations in China.  Under the two separate agreements, TMO, as an expert in the development of 'second generation' ('2g') biofuels produced from biomass or biowaste rather than virgin crops,  will embark on testing programmes jointly with each partner to develop the country's first fully commercial 2g ethanol plants using cassava residue and cassava stalk.

The Bio-energy and Bio-chemical Division of COFCO, China's largest diversified products and services supplier in the agribusiness and food industry, has signed an agreement for a joint testing programme to manufacture ethanol from cassava residue and cassava stalk. The purpose of the agreement is to finalize a design package for the first fully commercial 2g ethanol plant in China. COFCO already has a 1g cassava ethanol plant with annual capacity of 200,000 tons at Beihai, Guangxi province and will provide residue suitable for 30,000 tons of 2g ethanol, which will be supplemented with cassava stalk.

TMO will also embark on a joint testing programme with CNOOC New Energy Investment Co, a wholly owned subsidiary of the China National Offshore Oil Corporation (CNOOC), one of the largest state-owned oil companies, and the largest offshore oil and gas producer in China.  Again focusing on the manufacture of ethanol from cassava residue and cassava stalk, the aim is to develop an integrated 1g and 2g 180,000 ton plant that CNOOC has applied to build in Nanning, Guangxi province.  Set within 60,000 hectares, the site would produce 1.6 million tons of cassava and a similar amount of cassava stalk.

The biofuels market in China represents a significant opportunity, with ambitious government targets for ethanol production, substantial quantities of cheaply available feedstock for production of 2g ethanol, and a favourable subsidy regime. For further information see below.

Commenting on the signings, Hamish Curran, CEO of TMO said:  "We began collaborating with both CNOOC and COFCO 18 months ago to provide initial technological verification, and are extremely proud to have been selected as their technology partner. These agreements are a significant development for TMO and the advancement of second generation biofuels from biowaste. Having developed these highly significant relationships, we now look forward to the next phase of our work, engineering bespoke commercial production solutions for both of our partners.  Working in partnership with both organisations will enable us to utilize our technology on an unprecedented scale and create firsts not just for TMO and China, but the industry as a whole."

Jiang Yachen, China Country Head of Diverso, TMO's China based investment and commercial partner who facilitated the initial introductions and all negotiations added: "China represents a significant opportunity for second generation biofuels, however the manufacture of ethanol is still a highly restricted area. To have been selected as the technology partner of both CNOOC and COFCO for projects of this scale has required extensive research and due diligence to be undertaken to demonstrate TMO's technical capability.  Both projects represent an exciting opportunity for all parties to work together to realize the potential of biofuels on a commercial scale.

-Ends -

For further information please contact:

TMO Renewables Ltd
Hamish Curran
01483 303305

M:Communications
 Elly Williamson
+44 (0) 20 7920 2339
Patrick d'Ancona
+44 (0) 20 7920 2347

Notes to Editors:

Overview of Biofuels Market in China

  • China has targets of 2.0m and 10.0m tonnes of fuel ethanol production in 2010 and 2020. At 10.0m tonnes, Chinese ethanol production will satisfy a nationwide E5 standard, but will fall some 40% short of a national E10 standard. These targets will likely be strengthened by the imposition of specific blending targets for major distributors.   
    Excluding food, total available biomass in China is in excess of 1.5 billion tonnes per year. Agricultural waste accounts for an estimated 800m tonnes with forest and wood waste accounting for the remainder. Not included in these totals is municipal solid waste, which totalled an estimated 248m tonnes in 2010 and of which over 100m tonnes was collected and treated.
  • All first generation production capacity utilising edible feedstock has been banned in China since 2006. At the end of 2010, the government amended the New Energy Law and opened up the market for 2g fuel ethanol production to private producers for the first time.
  • The feedstock for cellulosic ethanol can be collected quite cheaply in China and shields producers from fluctuating commodity prices. It also has potentially positive social outcomes since the sale of agricultural waste - most of which is currently unused - will provide rural residents with an additional income stream.