PetroChina Company Limited and the State Forestry Administration of China signed a framework agreement on the cooperative development of forestry bioenergy on January 11. The construction of forest bases for forestry bioenergy was also officially launched in Yunnan and Sichuan provinces. These forest bases, covering an area of more than 40,000 hectares, will ensure a supply capacity of 60,000 tons of bio-diesel raw material per year. At the end of the 11th Five-Year Plan (2006-2010), PetroChina plans to produce 2 million tons of non-grain ethanol annually, accounting for 40% of the nation’s total. PetroChina will produce 200,000 tons of forestry bio-diesel annually and establish forestry biomass energy raw material bases of over 400,000 hectares, striving to become a leading company in the biomass energy industry.

Meanwhile, PetroChina and the State Forestry Administration will jointly establish a Green Carbon Foundation to support forestry carbon sequestration activities in order to promote planting and forestation and cutcarbon emissions.

Forestry biomass energy is regarded as an important component of the national alternative energy development strategy. This energy has several advantages, including its huge potential, as well as the fact that it makes no demands on land or grain resources, it benefits both industry and the environment and it helps to cut greenhouse gas emissions. In addition, it is also crucial in terms of relieving energy shortages, optimizing the energy structure and promoting sustainable socioeconomic development.