China’s oil giants are currently vying for a leading position in the development of bio-fuels.

China’s National Offshore Oil Corporation – the country’s third largest oil company, will strengthen its alternative energy development activities by establishing a bio-diesel refining facility in southern China’s island province of Hainan by the end of the year.

The new facility will produce 50,000 tons of bio-diesel annually in its first phase and will initially be fed with palm oil sourced from Southeast Asia.

In the meantime, China National Petroleum Corporation, the country’s largest oil company, also plans to establish two sets of experimental bio-diesel production facilities. The company aims to construct one set of facilities in the city of Nanchong in Sichuan Province, which will be China’s first bio-fuel facility to begin operation when it comes online later this year.

China Petroleum & Chemical Corp (Sinopec), the country’s second largest oil company, also plans to build a facility capable of producing 100,000 tons of diesel annually in Sichuan’s Panzhihua, supported by the plantation of between 26,700 to 33,300 hectares of forests intended for use as raw material.

In total China aims to have bio-fuels account for 15 percent of its total transportation fuel consumption by 2020. By comparison, the European Union has set itself a target of 20 percent for the same period.

I wonder how sustainable the palm-oil is?