China to the Rescue

U.S. project developers look to China for financial support
By Kris Bevill | November 15, 2011

The U.S. federal government continually names China as being a country to beat in the clean energy race. However, increasingly, cellulosic ethanol producers and technology developers are coming to view China not as a competitor, but as a collaborator. In late October, BlueFire Renewables Inc. signed a memorandum of understanding with China Huadian Engineering Co. Ltd., one of China’s largest utilities, to finance its 19 MMgy biorefinery in Fulton, Miss., and to potentially finance five other projects in the U.S. Huadian and BlueFire are also considering collaborating on projects in similar projects in China, using BlueFire’s technology and Huadian’s electricity generation expertise.

The meeting between BlueFire and Huadian was facilitated by the Washington, D.C.-based, nonprofit National Center for Sustainable Development. Formed in 2001, the organization’s mission is to reduce greenhouse gas emissions through the development of sustainable projects and programs that demonstrate the economic benefits of positive environmental practices. In 2009, the NCSD joined with the China Clean Development Mechanism Fund Management Center (CDM Fund) to launch the China-U.S. Low Carbon Development Cooperation Program as a way to promote the implementation of low-carbon projects in both countries. It was through this program that NCSD was able to pair BlueFire with Huadian.

Mitchell Stanley, president and trustee of the NCSD, says the China-U.S. program is designed to introduce U.S. developers of technologies that are practical and scalable to potential counter-parties in China at a high level. “In China, you have to start at the top and work your way down. You cannot start at the bottom. That’s just the way it works,” he says. The CDM and Chinese government officials approved of BlueFire’s approach to biomass-fired power generation, biofuels and biochemical production, which opened the door for a partnership with Huadian, he says.

Huadian was selected as a potential partner for BlueFire because of its interest in biomass-fired power generation. Stanley says one area of focus at NCSD is to find “creative matching” solutions to pair a U.S. company’s strengths with a Chinese firm that has a particular interest in those strengths. “The Chinese companies have a variety of investment options,” he says. “They can go anywhere on the planet and invest anywhere they want to. [But] I think the Chinese genuinely feel that America is the market they need to be in. They have tremendous world-class companies, but you have to make it in the United States to know that you have arrived.”

The agreement between BlueFire and Huadian was the NCSD’s first cellulosic ethanol-related project and its most significant renewable energy project to date. 

—Kris Bevill