BP Biofuels a growing alternative

Biofuels done well

Jo Howes

July 2012

Forces driving adoption of biofuels

Convergence of forces will

accelerate biofuels adoption

Biofuels will meet an increasing

share of the fuel market

In the next 20 years:

• We will need around

40% more energy in

2030 than we consume

today

• Biofuels make up 3.5%

of global transport fuels

used today (by energy).

If done well, this could

rise to 7% by 2030.

• Major growth in biofuel

production will take place

in the US, Brazil and

Europe.

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1990 2000 2010 2020 2030

Mb/d

Biofuels supply Asia Pacific

Other

US

Europe

Brazil

BP Energy Outlook 2030, © BP 2012

Bioenergy is crucial to meeting UK

GHG targets

• UK Bioenergy Strategy shows that sustainable bioenergy could contribute 8-

11% to the UK’s total primary energy demand by 2020 and 12% by 2050

• Excluding biomass from the energy mix would significantly increase the

cost of decarbonising our energy system

• Bioenergy is

important for heat,

power and transport

fuels

• Biofuels can offer a

material and cost

effective contribution

to carbon reduction

from road transport

BP Biofuels strategy is based on 4 key

principles…

• Low-cost

• Low-carbon

• Scalable

• Sustainable

0%

20%

40%

60%

80%

100%

120%

Cellulosic Ethanol

Ethanol from EU wheat

Ethanol from sugar cane, Brazil

GHG reductions from biofuels (vs. gasoline)

Source: EU Renewable Energy Directive Annex V Typical GHG emission savings 2009

Source: WWF Energy Report 2011, 250mha energy crop case

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1000

2000

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5000

6000

7000

8000

9000

10000

Biofuel yield

litres biofuel (gasoline equivalent)/hectare/year

Ethanol

Biodiesel

Advanced

Global biomass resource potential split by

feedstock type

Densely

located,

consistent

feedstocks

Evolution of lignocellulosic ethanol

production cost

..leading to a focused strategy

Sugarcane

ethanol

Brazil

Advantaged

molecules

biobutanol

Advanced

technology

lignocellulosics

Ensuring crop sustainability

Element Potential impact Mitigation

En

viro

nm

en

tal

Habitat and

bio-

diversity

• Direct biodiversity and

habitat loss

• Indirect land effects

• Legislation – avoiding high impact areas

• Voluntary sustainability schemes

• Advanced crops - high yields, low land use

• Set aside within plantations

Water • Water consumption

• Water pollution

• Choice of location and crop type

• Improved irrigation and recycling

• Targeted breeding to reduce water needs

Air quality • Sugarcane burning • Mechanised harvesting without burning

Soil

• Soil carbon content loss

• Acidification from

chemical fertilisers

• Precision agriculture, minimise fertiliser use

• Crops requiring less fertilisers

• Perennial crops: no ploughing each year

So

cial Labour

• Child labour, forced

labour, wages, health and

safety

• Good HR practices

• Voluntary social standards

Community

• Contested land rights,

local food security, job

creation

• Choice of location, risk assessment

• Local sourcing

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Sugarcane ethanol in Brazil

• Significant producer of ethanol in Brazil: Three operating mills at $750 million

total investment, which will each produce up to 480 million litres / year each

• Grown in designated sugarcane areas, over 1000 km from the Amazon region

• GHGs: reduction of over 70% compared with fossil gasoline

• Power: waste product (bagasse) used to generate power - each refinery to

export at least 70,000 MWh/yr of surplus electricity to the grid

• Setting aside over a fifth of farm land to preserve and improve native

vegetation and biodiversity of species

• Tropical BioEnergia received SA8000 certification from SAI (Social

Accountability International) in Feb 2012

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Cellulosic ethanol in the US

• Focus on the Southern Gulf

States of the US

• Constructing a 20,000 acre farm

• Conversion facility to break

ground this year

• 36 million gallons per year from

high-yielding energy grasses

• GHG savings of over 60%

expected

• Uses low quality agricultural

land

• Uses precision agriculture to

minimise fertiliser, water and

energy use

Highlands

Advantaged molecules: Biobutanol

and Sugar to diesel

• Technology demonstration plant

in Hull to accelerate the

commercialization of biobutanol

• Will validate technology

developed by Butamax Advanced

Biofuels (a BP/DuPont JV),

allowing it to be deployed at full

commercial scale

Crops take

energy

from the

sun and

CO2 from

the air and

store it as

sugars and

biomass

Sugars are extracted

from the crop and the

business

A single celled

organism is used to

convert the sugars to

oils

Oil is extracted and

upgraded so it is

suitable for use as

transportation fuel

• BP/DSM Sugar to Diesel

collaboration

Wheat ethanol here in the UK:

Vivergo

• JV between AB Sugar, BP and Dupont

• The largest ethanol producer in the UK

• The UK’s largest source supplier of

animal feed

• 1.1 million tonnes of feed grain wheat

from Yorkshire and Lincolnshire

• Will produce 420 million litres of

bioethanol – a third of the UK’s

requirements

• Will produce 500,000 tonnes of animal

feed per year – reducing farmers’

dependence on imported protein feeds

• GHG savings in excess of 50% on a

well-to-wheel basis

• Creating around 80 full time, skilled

jobs, and is expected to create and

support a further 1000+ indirect jobs

The future of sustainable bioenergy

• Biomass can make a major contribution to future global energy

supply

• We believe that biofuels done well are a crucial part of the future

transport energy mix

• We need to focus on deployment of sustainable bioenergy projects

now, including biofuels done well

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