An official government rule published this week citing a shortage in farmland and food crops may force China's oil companies to cancel plans to explore large-scale production of biofuel. Losses in farmable land continue to cause problems for China.
"Rules that China published this week are aimed at preventing "a mad rush of companies jumping on the bandwagon" of making fuels from plants and animals."
"China National Petroleum Corp. is among companies planting Barbados nuts, yams and other crops that can be turned into fuels for cars. Such projects will be supported only as long as there is an adequate supply of grain, the Finance Ministry said last month, to avoid having to import food for the 1.3 billion people in China. Corn prices on the Dalian Commodity Exchange rose to a record Friday."
"Construction, pollution and natural disasters are decreasing the land area China has available for food crops."
"The amount of land that had been set aside for the wheat crop but was not fit to be farmed this year jumped 24 percent, the Shanghai Securities News reported last week."
FULL STORY: China's need for crops may curb biofuel plans
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