2013 socio economic prospects of advanced biofuels voetmann wfes
DESCRIPTION
I will be sharing Novozymes' view on bioenergy and sustainability today at WFES and wanted to share some key data on biomass availability, the transportation context and some regional data.TRANSCRIPT
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THE FUTURE IS BIOBASED:
SOCIO-ECONOMIC PROSPECTS OF ADVANCED BIOFUELSWFES
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NOVOZYMES IN BRIEFWORLD LEADER IN BIOINNOVATION
WE GREEN THE WORLD: Enzymes save energy, chemicals, raw-materials and water In 2011, Novozymes helped customers save 45 million tons of CO2
BASED ON INNOVATION: 14% of sales re-invested in R&D 7000 patents granted or pending
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Novozymes' R&D locations
LEADING THE WAY IN ENABLING TECHNOLOGYFOR ADVANCED BIOFUELS
3
World leader in biofuel enzymes
Global R&D focus on advanced biofuels
Broad partnership strategy – we are working on many feedstocks and technologies
More than 150 people dedicated to advanced biofuels
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Transport is the second largest energy user and by far the largest oil user
By 2050 there will be an estimated 2.3 billion additional cars worldwide – 1.9 billion of these in developing countries
Transport continues to be the fastest growing CO2 emitter
Source: International Energy Agency: ”World Energy Outlook”, 2011 and International Monetary Fund: ”Mass Car Ownership in the Emerging Market Giants”, 2008
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WHY WE NEED BIOFUELS 2010
Source for total number of cars: IMF World Economic Outlook (April 2008); Chamon, Mauro and Okawa in Economic Policy (April 2008) Source for distribution of cars: Source: Various statistics found on WWW – distribution is only indicative of development.
Total number of cars is 760.000.000
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WHY WE NEED BIOFUELS 2050
Total number of cars will be 2.900.000.000
Source for total number of cars: IMF World Economic Outlook (April 2008); Chamon, Mauro and Okawa in Economic Policy (April 08) Source for distribution of cars: Source: Various statistics found on WWW – distribution is only indicative of development.
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THIS IS A POWER PLANTPOWER FOR FOOD, FEED AND FUEL
FOOD, FEED AND FUEL
ELECTRICITY AND FEED
ADVANCED BIOFUELS
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THE TECHNOLOGY IS READY AND PRODUCTION IS BEING SCALED UP
2013201220112010 2014
Europe
Commercial scale
Demonstration scale
Pilot scaleBrazil
US
Commercial scale Demonstration scalePilot scaleChina
Commercial scaleDemonstration scale
Commercial scale
Demonstration scale
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*Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
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BNEF STUDY BASED ON THE AGRICULTURAL POWERHOUSES
United States
Mexico
Brazil
Argentina Australia
China
India
EU-27
G20 countries not included: Canada, Indonesia, Japan, Russia, Saudi Arabia, South Africa, Republic of Korea, Turkey
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Advanced biofuels 17,5%
Residue left on field75%
Power 2,5% Husbandry 5%
A maximum of 17.5% is assumed to be available for advanced biofuel production
Collecting only 25% of agricultural residue is a conservative methodology that takes into accounts technical and ecological constraints
This purposefully aim to preserve soil quality and are in the low-to-medium range of comparable studies
AGRICULTURAL RESIDUE AVAILABILITY IN THE 8 SELECT REGIONS
Total = 4,6bn
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
Billion dry tons, 2030
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150
200
250
100
50
2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
AGRICULTURE ISA HUGE UNDER-UTILIZED RESOURCE
Million dry tons
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
The agricultural powerhouses have enough biomass for a good realisticscenario on car fleet mix
Wheat residue
Maize residue
Sugarcane residue
Rice residue
Soybean residue
Other residues
Five major crops represent 88% of the 24 crops analysed, totalling 800m tonnes in 2030 available for advanced biofuels
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THE RESIDUE POTENTIAL IS HUGE
17.5%75% RESIDUES LEFT ON FIELD
5% HUSBANDRY2.5% POWER
914 million tonnes of residues will be availablein eight selected regions and can replace
half of the gasoline needs
2030 figures agricultural residues only
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PRODUCTION POTENTIAL BY 2030LOWERING FOSSIL FUEL IMPORT BILL
United States
China
EU-27
Brazil
Mexico
India
Australia
Argentina
53
24
9
8
8
4
3
1
10% blending scenario Residue Potential Scenario
Bn. liters
10% of gasoline could be replaced by advanced biofuels by using only 5% of the available agricultural residue supply
50% of the forecast 2030 gasoline demand could be replaced by advanced biofuels using only 20% of agricultural residue
72
89
60
71
8
37
7
7
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
Note: India and Argentina meet 100% of their gasoline requirements without using all their availableresidues. Mexico uses all its residues before reaching 10%.
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INVESTMENT IN BIOENERGY WILL BRING ECONOMIC GROWTH AND DEVELOPMENT FOR RURAL AREAS
• Biofuels is the only large-scale alternative when it comes to transportation
• The technology is ready
• Biofuels is competitive to oil
• … and holds great potential in countries resting on an agricultural base
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APPENDIX IWFES
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WHAT ARE THESUSTAINABILITY ASSUMPTIONS?
In this study we assume land use patterns will not change before 2030; existing activities are not altered nor is new agricultural land added
We assume a maximum of 17.5% is potentially available for bioenergy production; it is a conservative estimate which deliberately steers clear of removing a high level of nutrients. For sugarcane bagasse we assume that 30% is used for advanced biofuels. The rest for bioelectricity
Our methodology assumes stable yield growth rates, based on historic data between 1989 and 2010
We excluded energy crops and forestry residues. Taking them into account would however increase total biomass availability
LAND USE PATTERNS
HUMUS BALANCE
YIELD GROWTH
ENERGY CROPS
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
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WHAT ARE THEECONOMIC ASSUMPTIONS
We assume total facility costs for a next-generation ethanol refinery will be approximately $1.50 per litre of annual capacity
For this example we used $0.44 per litre as it is roughly the energy equivalent price with an oil price of $100 per barrel
Following the EU Renewable Energy Directive indications, the study assumes next-generation ethanol, using the enzymatic hydrolysis technology, reduces emissions by 80%
PLANT COSTS
ETHANOL REVENUES
GHG EMISSIONS
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
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AGRICULTURAL RESIDUE AVAILABILITYCHINA IN THE LEAD, 2030
United States
China
EU-27
Brazil
Mexico
India
Australia
Argentina
9
8
Fuel Demand Residue Potential
133
20
21
22
60
2
180
221
151
177
20
110
16
39
The agricultural powerhouses still hold great potential. If next-generation technologies fulfil their promise then these resources can be viewed in the same terms as a barrel of oil
Million dry tons
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
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REQUIRED INVESTMENTS WOULD BOOST ECONOMY IN RURAL AREAS, 2030
United States
China
EU-27
Brazil
Mexico
India
Australia
Argentina
96
118
80
94
11
50
9
10
Investment Revenue
Total potential to generate revenues of $1 trillion between today and 2050 (Fuel Demand Scenario) when assuming oil is at $100 per barrel
633
779
532
622
70
329
58
65
Note 1: Revenues are for delivered next-generation ethanol and are generated by plants throughout a 20-year lifetime. Note 2: We assume total facility costs for a next-generation ethanol refinery will be approximately USD 1.50 per litre of annual capacity.
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
Bn. USD
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JOB CREATION BY REGIONMILLION MAN YEARS OF EMPLOYMENT, 2030
United States
China
EU-27
Brazil
Mexico
India
Australia
Argentina
Fuel Demand Residue Potential
Harvesting a sustainable amount of agricultural residue will provide rural economies with an additional revenue source that will help diversify farmers’ income
Note: Job creation, or one man-year of employment, in the bioproduct industry comes in two parts: firstly, biorefinery construction and operation jobs; and secondly, agricultural residue supply chain jobs.
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
1.37
2.87
0.91
1.25
1.18
0.15
0.15
0.12
0.30
0.08
1.02
0.78
0.17
Millionman-years
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JOB CREATION ACROSS THEADVANCED BIOFUELS SUPPLY CHAIN
COLLECTION TRANSPORT CONVERSIONCONSTRUCTION
ETHANOL DEMAND
CONSTRUCTION JOBS
OPERATION JOBS
TRANSPORT JOBS
FEEDSTOCKJOBS
# OF REFINERIES
FEEDSTOCK MIX
CONVERSION EFFICIENCY
INVESTMENT NEEDS ($BN)
BIOMASS DEMAND
AGRICULTURAL RESIDUE
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
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25% OFF TRANSPORT EMISSIONSWITH ADVANCED BIOFUELS
2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 20300
500
1000
1500
2000
2500
Note: EU sustainable transport group data demonstrates a litre of gasoline has a well-to-wheel emissions footprint of 2.42kg per CO2e. Following the RED methodology, the study assumes next-generation ethanol – using enzymatic hydrolysis – reduces GHG emissions by 80%.
Gasoline emissions
Fuel Demand Scenario
Residue Potential Scenario
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
Residue Potential Scenario: 475 million tons of CO2 less between today and 2030. Equates to not burning 2.6 million railcars of coal
Million ton CO2 equivalent
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WHAT’S IN IT FORTHE WORLD
Agricultural Residues
Energy Security Growth Jobs CO2
China221 mio dry ton China could displace up to 37% of
its gasoline consumption in 2030 779 bn USD 2.87 million man
years 29%
US180 mio dry ton The US could displace up to 16%
of its gasoline consumption in 2030
663bn USD 1.37 million man years
11%
Brazil
177 mio dry ton Brazil could displace 83% of gasoline consumption in 2030. This is on top of sugarcane ethanol
622 bn USD 1.25 million man years
67%
India
110 mio dry ton India could displace up to 100% of its gasoline consumption in 2030 and still produce 4bn litres for export
329 bn USD 0.91 million man years
80%
Europe151 mio dry ton The EU27 could displace
68% of its gasoline consumption in 2030
532 bn USD 1.18 million man years
54%
Argentina
39 mio dry ton Argentina could replace up to 100% of its gasoline consumption by 2030 and potentially export ethanol
65 bn USD 0.30 million man years
80%
Australia16 mio dry ton Australia could replace up to 19%
of its gasoline consumption by 2030
58 bn USD 0.12 million man years
17%
Mexico20 mio dry ton Mexico could displace up to 7% of
its gasoline consumption in 2030, 70 bn USD 0.15 million man
years5%
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
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WHAT’S IN IT FOR
BRAZIL?
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
The Brazil can replace 83% of its annual gasoline consumption by 2030 with advanced biofuels
Energy security
Create almost 1.25 million jobs between 2010 and 2030 mainly in rural areas
Brazilian players would be the major beneficiaries, including 94 billion USD domestic engineering, construction and feedstock market
Economy
Save CO2 and reducing GHG emission from gasoline related road transport by 67%
Environ-ment
Jobs
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WHAT’S IN IT FOR
ARGENTINA?
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
Argentina can replace 100% of its annual gasoline consumption by 2030 with advanced biofuels and potentially export ethanol
Energy security
Create almost 0.30 million jobs between 2010 and 2030 mainly in rural areas
Argentine players would be the major beneficiaries, including 10 billion USD domestic engineering, construction and feedstock market
Economy
Save CO2 and reducing GHG emission from gasoline related road transport by 80%
Environ-ment
Jobs
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WHAT’S IN IT FOR
MEXICO?
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
Mexico can replace 7% of its annual gasoline consumption by 2030 with advanced biofuels and potentially export ethanol
Energy security
Create almost 0.15 million jobs between 2010 and 2030 mainly in rural areas
Mexican players would be the major beneficiaries, including 11 billion USD domestic engineering, construction and feedstock market
Economy
Save CO2 and reducing GHG emission from gasoline related road transport by 5%
Environ-ment
Jobs
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