Beijing biodiesel plant suspends operations

Web exclusive posted August 6, 2008 at 11:30 a.m. CST

China's largest biodiesel producer Gushan Environmental Energy Ltd. announced it will temporarily suspend operations at its plant in Beijing from Aug. 1 to Sept. 20. The decision was made due to recent heightened enforcement of traffic control measures adopted by the Beijing municipal government in preparation for the 2008 Olympic Games and Paralympic Games. The measures include vehicles must meet emissions standards, a system mandating that cars with even numbered and odd numbered license plates be driven only on alternating days, and the regulation and limitation of hazardous materials transport. Gushan Environmental Energy said the measures have restricted the ability of its supplier to deliver raw materials to the plant.

"Although Gushan has not received any suspension or shut-down notice from the PRC government, we believe that the government's recent strict enforcement of measures controlling the movement of vehicles and goods in and out of the Beijing area have rendered biodiesel production at our Beijing plant impractical for the time being," said Jianqiu Yu, Gushan Environmental Energy's chairman. "We expect to resume biodiesel production at our Beijing plant after September 20."

As a result of this suspension, the company expects that the 2008 production volume at its Beijing plant will be approximately 10,000 tons (3 million gallons) less than originally anticipated.

Gushan Environmental Energy currently operates five production facilities in the Sichuan, Hebei and Fujian providences, as well as Beijing and Shanghai. The facilities have a combined annual production capacity of 290,000 tons (approximately 87 million gallons). The company's goal is to increase its annual production capacity to 400,000 tons (nearly 120 million gallons) with the expansion or addition of new production facilities in Beijing, Shanghai, Hunan and Chongqing. In addition to biodiesel, the company produces a variety of byproducts such as glycerin, plant asphalt, erucic acid and erucic amide.