The country produced 1.02 million tons of bio-ethanol from corn and other raw materials in 2005. The ethanol is added to petrol at a ratio of 1:10 for use in automobiles.

The government estimates that by 2010, ethanol-mix petrol will account for half of China's petrol consumption.

Large firms, such as the China National Petroleum Corporation (CNPC) and the China National Cereals, Oils and Foodstuffs Corp (COFCO), have announced ambitious plans for bio-energy investments.

CNPC has signed an agreement with the government of Sichuan Province in southwest China to develop facilities to produce 600,000 tons of automotive-grade ethanol from sweet potatoes each year and 100,000 tons bio-diesel made from the seeds of the jatropha curcas tree.

COFCO said in October it would invest one billion yuan (126 million U.S. dollars) to build a major ethanol plant in Guangxi region, also in southwest China.

The plant, with a capacity of 400,000 tons, will lift 1.1 million farmers out of poverty by growing cassava as the raw material for the plant, said Yue Guojun, head of COFCO's bio-chemical and bio-energy division.

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