From 2026 to 2030, a total of 4.27 million tonnes of new ethanol and fuel ethanol capacity will be added in China. Among this, no new fuel ethanol capacity will be commissioned; fermentation ethanol is expected to add 150,000 tonnes of new capacity, while the remaining new capacity will mainly come from coal-based ethanol, approximately 4.12 million tonnes. The capacity to be phased out is concentrated in fermentation-based edible ethanol. During the 15th Five-Year Plan period, fermentation-based edible ethanol is expected to see 1.84 million tonnes of capacity retired, including 480,000 tonnes in East China, 380,000 tonnes in Northeast China, 310,000 tonnes in Central China, 300,000 tonnes in North China, 200,000 tonnes in Southwest China, 130,000 tonnes in South China, and 40,000 tonnes in Northwest China.

According to data publicly announced on websites, total domestic ethanol new capacity from 2026 to 2030 is 4.27 million tonnes, of which 150,000 tonnes is biological fermentation ethanol and 4.12 million tonnes is coal-based ethanol. The biological fermentation ethanol mainly uses a synthesis gas bacterial strain as feedstock, powered by industrial tail gas. This process is the same as the one used by Shougang LanzaTech. The specific units are a 50,000-tonne plant of Henan Sailongtu and a 100,000-tonne ethanol plant of Inner Mongolia Yitai.

From 2025 to 2030, China's ethanol capacity will continue to grow, with 15 new units planned and no confirmed capacity retirements.

In the second half of 2025, China is expected to build four new ethanol units with a total capacity of 975,000 tonnes, located in Central and Northwest China. The largest among them is Shaanxi Yulin Kaiyue Coal Chemical in Northwest China, with a capacity of 500,000 tonnes per year.

In 2026, China is expected to build three new ethanol units with a total capacity of 670,000 tonnes: Xinjiang Zhongrong New Energy (400,000 tonnes), Huizhou Yuxin New Materials Co., Ltd. (220,000 tonnes), and Henan Sailongtu Biotechnology Co., Ltd. (50,000 tonnes).

In 2027, China is expected to add four new ethanol units: Xinjiang Haoyuan Chemical Co., Ltd. (600,000 tonnes), Inner Mongolia Zhuozheng Coal Chemical Co., Ltd. (600,000 tonnes), Longxiang Hengyu Chemical Co., Ltd. (200,000 tonnes), and Juzhengyuan (Jieyang) New Materials (200,000 tonnes).

From 2028 to 2030, an additional 2 million tonnes of capacity is expected. China's ethanol unit capacity will continue to expand over the next five years.

By 2030, China's new ethanol capacity will total 4.27 million tonnes, of which fermentation ethanol adds 150,000 tonnes and coal-based ethanol adds 4.12 million tonnes.

The trend of new capacity additions from 2026 to 2030 follows an M-shaped pattern. The capacity growth rate peaks in 2027-2028. Initially, cost advantages and gradually increasing market share drive steady growth. After 2027-2028, as a large wave of new capacity comes on stream, domestic cost competition intensifies, factory profitability is impaired, and market saturation rises continuously, leading to a slowdown in new supply additions.

From 2026 to 2030, biological fermentation ethanol adds 150,000 tonnes of capacity. Among this, Henan Sailongtu’s 50,000-tonne biological bacterial fermentation unit is expected to start production by end-2025 or early 2026, and Xinjiang Yitai’s 100,000-tonne biological bacterial fermentation unit is expected to start production in 2028.

From 2026 to 2030, coal-based ethanol is expected to add 4.12 million tonnes of capacity: 620,000 tonnes in 2026, 1.6 million tonnes in 2027, 1.1 million tonnes in 2028, no new capacity in 2029, and 800,000 tonnes in 2030.

By 2030, China's new ethanol capacity will total 4.27 million tonnes, of which fermentation ethanol adds 150,000 tonnes and coal-based ethanol adds 4.12 million tonnes.

The trend of new capacity additions from 2026 to 2030 follows an M-shaped pattern. The capacity growth rate peaks in 2027-2028. Initially, cost advantages and gradually increasing market share drive steady growth. After 2027-2028, as a large wave of new capacity comes on stream, domestic cost competition intensifies, factory profitability is impaired, and market saturation rises continuously, leading to a slowdown in new supply additions.

From 2026 to 2030, biological fermentation ethanol adds 150,000 tonnes of capacity. Among this, Henan Sailongtu’s 50,000-tonne biological bacterial fermentation unit is expected to start production by end-2025 or early 2026, and Xinjiang Yitai’s 100,000-tonne biological bacterial fermentation unit is expected to start production in 2028.

From 2026 to 2030, coal-based ethanol is expected to add 4.12 million tonnes of capacity: 620,000 tonnes in 2026, 1.6 million tonnes in 2027, 1.1 million tonnes in 2028, no new capacity in 2029, and 800,000 tonnes in 2030.