ENERGY-CHINA: BIOFUEL PRODUCTION EATS INTO FOOD GRAIN STOCKS.

by Antoaneta Bezlova

BEIJING, Dec. 20, 2006 (IPS/GIN) -- Applying modernized versions of ancient chemical processes to convert crops and oils into energy sources, Chinese entrepreneurs have created a profitable green biofuels business with plenty of room to grow.

But surging crop prices have caused China to clamp down on the use of corn and other edible grains for producing biofuel. While it wants to support the growth of alternative energy sources, Beijing says the issue of national food security should take precedence over the country's green agenda.

"In China the first thing is to provide food for its 1.3 billion people, and after that, we will support biofuel production," the state-run newspaper People's Daily quoted Wang Xiaobing, an official at the Agriculture Ministry 's crops cultivation department, as saying this week.

China has been encouraging the production of biofuel such as ethanol and methane from renewable resources to reduce the country's growing dependence on imported oil. Once an exporter, China now imports at least 43 percent of its oil supply.