1

A Transportation Perspective on Biodiesel and Advanced Biomass

Conversion Fuels

California Energy CommissionSacramento, CAMarch 1, 2005

2

Outline

1. Evolution of:Energy-Environmental-Fuel

2. Renewable Fuels3. Context – Cost Effectiveness4. Prerequisites for Renewable Fuels5. Thermal Conversion Process Diesel

3

Crude Oil Sources For California Refineries 1982 - 2003

California

Alaska Foreign

0

100

200

300

400

500

600

700

800

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002

Mill

ions

of B

arre

ls

4one possible view of the future - not a forecast

The next 20 years will see a wider range of technologies and fuel types, especially in the developed world

0102030405060708090

100

2000 2010 2020

% of New cars

Diesel (inc Bio-diesel/GTL)

Gasoline (inc Ethanol)

HydrogenFuel cell

Sparkignition

Compressionignitionengines

LPG/CNG

Hybrid

Naphtha/Methanol

HCCI

Source: Shell Global Solutions

5

Fuel Diversification Scenario Europe

today 302010Years

Hydrogen regenerative

Crude oil based50 ppm S

Crude oil based with <10 ppm sulphur

SynFuelNatural gas based

SunFuelBiomass based

others (CNG)

Source: VW, Dr. Wolfgang Steiger

6

California Demand versus Local Supply

15

17

19

21

23

25

27

29

31

1996 1999 2002 2005 2008 2011 2014 2017 2020 2023

Bill

ions

of G

allo

ns

Supply from California Refineries

2.6 billion

9.2 billion

Gasoline & Diesel Fuel

High Demand Case @2.3 Percent Per Year

Base Demand Case @1.5 Percent Per Year

Historical Forecast

7

Evolution of Environmental Aspects

Greenhouse Gases CO

Energy

2

Exhaust Emissions CO,NOx,HC,PM

20301995 2000 2005 2010 2015 2020 2025

Source: VW, Dr. Wolfgang SteigerDOE Forum 7. March 2004, Washington, USA

8

Fuel Evolution:

Fuel Evolution:

Diesel/GasolineCrude Oil Based

Synthetic Fuel Natural Gas Based

SunFuelRenewable

HydrogenRenewable

Shared Fuel Strategy

Source: VW, Dr. Wolfgang Steiger

9

Prerequisites for Sustainable Transportation Fuels

• Liquid at room temperature & pressure• Compatible with existing petroleum-based

infrastructure• Compatible with old and future engines

and vehicles• Economically - competitive with petroleum

based fuels

10

Biodiesel and Advanced Diesel Fuels

• Gas-to-Liquids (GTL)• Coal-to-Liquid (CTL)• Biomass-to-Liquid (BTL)

– Sun Diesel – VW, CHOREN, Daimler Chrysler• Thermal Conversion Process

– Changing World Technologies• Biodiesel

Same High Quality Fuel

11

Shell GTL Shell GTL -- SShell hell MMiddle iddle DDistillate istillate SSynthesisynthesis

Commercially proven technology, at Commercially proven technology, at BintuluBintulu, Malaysia since 1993 , Malaysia since 1993 ……....

O2O2

Syngas600 MMscf/d

NaturalGas

CO + 2H2

SynthesisSynthesis

–(CH2)n– 75,000 bbl/day

naphtha, LPG,gasoil,specialityproducts

HydrocrackingHydrocracking

PowerGeneration +WaterWater

SyngasManufacture

Ready for largeReady for large--scale applications!scale applications!

Source: Shell Global Solutions

12

GTL Supply Potential

Working Group Estimated GTL CapacityYear (bbl/d) (gallon/year)2010 75,000 1,150,000,000 2015 388,700 5,960,000,000 2020 800,000 12,265,000,000

Today there is over $20 Billion Committed in New GTL Plants World Wide

13

Biomass SunFuel

Synthesis

CO2 loop with SunFuel

Source: VW, Dr. Wolfgang Steiger

14

DieselWax Gaso-line

PyrolysisPyrolysis

GasificationGasification

Gas-CleaningGas-Cleaning Shift ReactorShift

Reactor

FT-SynthesisFT-Synthesis

H2O

H2

50 % cellulose25 % hemicellulose25 % lignite

50 % cellulose25 % hemicellulose25 % lignite

50 % CO25 % H2

25 % CO2

50 % CO25 % H2

25 % CO2

BiomassBiomass

Hydro-treatmentHydro-

treatment

Biomass to Liquid Fuel Production via Fischer Tropsch Synthesis

Distillation

Source: VW, Dr. Wolfgang Steiger

15

Assessment of Biofuel from an Auto View“Not all Biofuels considered by the EU are equally suitable for automotive applications“.

Source: R.R. Maly, DC & H. Heinrich, VW: View on Biofuels as Road Fuels; DOE Combustion and Fuels Meeting; Washington, March 17, 2004

16

Biodiesel’s Reduced Emissions

• Sulfur• Carbon

Monoxide• Hydrocarbons• Life Cycle CO2• Particulate

matter

17

SMDS in 1,9ltr 74kW VW-Diesel engine

Euro 4

0,000

0,005

0,010

0,015

0,020

0,025

0,030

0,035

0,000 0,050 0,100 0,150 0,200 0,250 0,300 0,350NOx emission [g/km]

Part

icul

ate

emis

sion

s[g

/km

] DieselSMDS

Source: VW, Dr. Wolfgang Steiger

18

Alternative Diesel Fuels Incremental Cost Effectiveness

<10%$1.50Biodiesel50%<$1.50BTL

??$40Hydrogen>50%$1.50-$2.25CNG-LNG

>>50%25¢GTL<20%22¢Propane

Potential Total Displacement

Cost/diesel-gallon saved

Fuels

Source: CEC Staff unpublished Cost Effectiveness Analysis

19

CarboV Test Facility CHOREN

Capacity: 1 MW thermalInput: wood

StrawGreen plantsShredder-Light-FractionCoal

Products: currently.: BioSynGas el. powerin 05.2003 : Diesel appx. 600ltr/day

KeroseneMethanol

20

Prerequisites for Renewable Diesel Fuels Penetration

• Legislated or Mandated use– EPACT-93– EURO Directive

• Or incentives– 2004 Jobs Act -Blenders Credit

• Competitive Economics is key– Economies of Scale are important

21

The TDI Is Future-Oriented …

0.3 l SDI 1cyl. 6,3 kW (8,6 PS)0,99 l/100 kmEuro 4 limits

VW 1-Litre Car

... demonstration of feasibility

Source: VW, Dr. Wolfgang Steiger

22

THE ENDBut Stay Tuned for Changing

World Technologies Presentation