In recent years, the consolidation of China's ethanol industry has accelerated, particularly in the food and industrial ethanol sectors. In 2022, total capacity for food and industrial ethanol in China decreased by 75.7 thousand tons, with new capacity added110 million tons and 185.7 million tons of capacity exited the market. In 2022, China's edible and industrial ethanol sector faced oversupply, intensifying competition. Capacity exits were concentrated in cassava and molasses ethanol. Cost competitiveness for cassava ethanol in East China declined from 2018 to 2020; although it improved after 2021, working capital shortages led to increased shutdowns and exits among companies in the region. Additionally, production capacity in South China is also declining. Molasses ethanol feedstock prices have risen annually since 2020, extending loss cycles and accelerating regional consolidation due to financial constraints.
2022 China fuel ethanol industry capacity grew by 6010,000 tons, all representing new capacity located in the Northeast region. The projects leverage abundant local corn resources and utilize domestic production processes and equipment. As industry competition intensifies, expansion of traditional fermentation capacity for fuel ethanol is slowing, while the likelihood of some coal-based ethanol capacity entering the fuel ethanol sector increases.