China, the world’s third-largest ethanol maker, will use 32.9 million acres (13.3 million hectares) of forestland, equivalent to the size of England, to grow trees that can be harvested to make bio-fuels.

China plans to grow trees bearing nuts or fruits high in oil content to produce alternative fuels and boost farmers’ incomes, Cao Qingyao, a spokesman at the state forestry administration said, according to a transcript of a press briefing in Beijing on Wednesday.

The world’s second-biggest energy user may spend 1.5 trillion yuan ($192 billion) in the next 15 years to increase the use of renewable resources to cut the nation’s reliance on oil. The government will subsidize biomass projects, especially those in bio-diesel and ethanol, the ministry of finance said in November. “The project will help resolve challenges to find replaceable energy and ensure the preservation of the environment,” Cao said in the transcript, which was posted on the agency’s web site on Wednesday.

“It is a great channel for farmers and bio-fuel makers to make money.” The state forest agency signed an agreement with PetroChina Co to develop land to grow crops for bio-fuels in southwestern China’s Yunnan and Sichuan provinces, PetroChina said on January 11. Bio-fuels, which include bio-diesel and bio-ethanol, are made from vegetable oils or animal fats. They are blended with gasoline and diesel to reduce pollution from vehicle engines.Rising food demand in China competes with bio-fuels for farmland. China’s capacity for processing corn surged to 70 million tonne in 2006 from 50 million tonne in 2005, partly due to rising ethanol production.

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