According to Liu Zhongmin, the institute's deputy director, the production line, created by Shaanxi Yanchang Petroleum and the academy's Dalian Institute of Chemical Physics in Liaoning province, went into operation in January and has the capacity to make more than 100,000 metric tons of pure ethanol every year.
According to Liu, the country currently produces seven million tons of ethanol each year using other methods, which can "hardly satisfy" its industrial and energy needs.
Liu also said that utilizing it could reduce our dependency on fossil fuels, and make our industrial production and energy structure more environmental friendly.
In addition to alcoholic beverages, ethanol can be used to produce thousands of everyday products from plastics to detergents.
It can also replace more toxic ingredients, such as methanol, during industrial production .
Other uses include mixing it with petroleum to increase its fuel efficiency and reduce pollution.
Liu said that an abundant supply of ethanol would also make ethanol-fueled vehicles more viable.