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October2009
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ExecutiveSummary
Market
Energysupplied
by
biofuels
in
the
Swedish
market
stood
at
120
TWh
in
2007
and
is
forecasted
to
riseto144TWhin2030and230TWhin2050
TheSwedishbiofuelsmarketisdominatedby
Ethanol BiodieselandBio as
Drivers
CostIncentives
FluctuationsinCrudeOilPrices
Challenges
ResistancefromtheSwedishForestryIndustry
Drivers&
Challenges
SupportforGreenCarOwners
HighGrowthinEthanolVehicles
Biofuels
Market
Being
Dominated
by
Imports
oo vs. ue ssue
HurdleswithBiogasSupply
Government
Initiatives
ma ean nergy o cy
BiogasVastProject
ResearchandDevelopmentProjects
OtherPoliciesTowardsDevelopingtheIndustry
MajorPlayers
Themarketishighlyfragmentedandcomprisesoffewlargeplayers
Largescaleimportshasledtothegrowthofanumberofsmallplayers
MajorPlayers
Ethanol BIodiesel Biogas
LantmannenAgroetanol LantmannenEcobransle LackebyWaterGroup
2BIOFUELSMARKET SWEDEN.PPT
SEKAB PerstorpBioProducts
Malmberg
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Introduction
Drivers&
Challenges
GovernmentPoliciesandInvestments
Major
PlayersKeyDevelopments
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TheEuropeanUnionbiofuelsmarkethasbeengrowingstrongly
withGermanyandFrancebeingthemarketleaders
On23January2008,theEUproposedthatthe
overallenergytargetwouldstandat
Overview Biodiesel
10,000
000MT Germanyis
thelargest
20%renewableenergyuseby2020
10%minimum
target
for
the
market
share
of
biofuelsby2020
TheEUhassetatar etofincor oratin 5.75%4,000
6,000
8,000Production
Imports
producer
biofuelsintransportationby2010
SegmentationofUsageinTransportation Bioethanol
0
2,000
2010f2009f
Exports
2008e2006 2007e
5%
Bioethanol20%
Biodiesel
2,500
3,000
Production
000MT Franceisthe
largest
producer
Vegeta eOi s
75%
500
1,000
1,500
2,000
Imports
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02006 2007e 2008e 2009f 2010f NOTE:Biogasaccountsforanegligibleshare
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MajorEuropeaninitiativestowardsdevelopingthebiofuels
market
1992:CAP allowed
for
non
food
crops
to
begrownonsetasidelandwithout
losingthesetasidepremium.The
amountofoilseedsgrownonsetaside
2003:Biofuels
Directive
(indicative
targets
2%
by
2005,
5.75%by2010)
EnergyTaxationDirective
RevisionofFuelQualityDirective(gasolinenorms)
landiscontrolledbytheBlairHouse
Agreement.
Revisionofdieselnorms&Biodieselqualitynorms
CAPReforms(changeinenergycroppremium)
1990 2005
1992:
20081995
1997:
2000
2000: 2006:
2008:Drafted
ofthe
Common
Agricultural
Policy(CAP)
onrenewable
energies
onenergy
supply
security
Strategy
energy
directive
2007:RenewablesRoadmapandRevisionofBiofuelsDirective
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gasemission
from
transport
fuel
by
1%
per
year
between
2010
and
2020
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Introduction
Drivers&
Challenges
GovernmentPoliciesandInvestments
Major
PlayersKeyDevelopments
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BioenergymarketinSwedenhasdevelopedduetomajor
governmentinitiatives
Bioenergysharehasincreasedby3%since
1970
Overview BioenergyShare
of
Total
Energy
Use
%
About90%ofbioenergyusedinSweden
comesfrom
the
forestry
sector
Theshareofbioenergyderivedfromthe
24
20
15
119
10
20
+3%
Intotal,around2%ofSweden'sarablelandis
usedsolelyforenergyproduction
PrimaryUsesofBioenergy ElectricityConsumptionMix
0
1970 1980 1990 2000 2004 2007
1,000
1,200
1,400
35%
1,370
Wind
Hydro
+7%
TWh
ApplicabilityofBioenergy
200
400
600
800
15%
66%
1%
537 25%
51%
19%3%
1%
28%
69%
14%
704
1%
18%
13%2%
504 GeoThermal
Others
Photovoltaic
Electricity
GenerationUsedasFuel
Heating
Purposes
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0
2006 2010e 2020e
4%
2005
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BiofuelscontributiontototalenergyconsumptioninSwedenhas
beenrisingandisexpectedtogrowinthefuture
Thetotalenergysharecontributedbybiofuelshas
risenby32%over200307
Overview TotalEnergy
Supplied
by
Biofuels
TWh
+3%
Inabsoluteterms,energygeneratedhasincreasedby
3%overthesameperiod
TheSwedishbiofuelsmarketisdominatedby
Ethanol
120116109108105
50
100
o ese
Biogas
BiofuelShareoftotalenergy RiseinEnergySuppliedbyBiofuels
0
20072006200520042003
230
200
250
TWh
+2%
+1%
4.00
3.10
3
4
%
+32%
0
144120
0
50
100
1502.232.28
1.32
0
1
2
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EthanolisthemostwidelyusedbiofuelinSweden,supplyis
largelydrivenbyimports Ethanol
Ethanolisthemostcommonliquidbiofuelin
Sweden
Overview TotalSupply
MT Import
Production
Itaccountsforapproximately90%ofallliquid
biofuelused
in
2008
LargestconsumerofbioethanolintheEU200
300400
500
86%
14%
21%19%
78%
22%
460
334316
, ,
consumedinSweden
QuantityofFeedstockUsed
0
100
2007
79%81%
2006 20092008SegmentationofProductionBase
600,000
MT598,000
Rye
Wheat
BarleyWood20%
Cereals
200,000
400,000
6%15%
79%
8%10%9%
81%
9%
320,000
80%
10%
80%
336,000,
12%80%
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BiodieselmarketinSwedenhasshownpromisinggrowthdueto
variouspoliciesandtheavailabilityoffeedstock Biodiesel
Biodieselcanbeproducedfromdifferent
vegetableoils
Overview TotalSupply
Production
ImportMT
InSweden,biodieselismainlyproducedinthe
formof
RME
(rape
methyl
esther)
from
rape
seedoil
100
150
6058%
120
67%
120
71%
140
,
fossildieselinthecounty
Governmentinitiativeshasallowedthis
segmentto
grow QuantityofFeedstockUsed
0
67%
2006
42%
2007
33%
2008
29%
2009
ar oustaxexempt onon o ese
Extensiveplanstowardsdevelopingnewbio
dieselplants
Inordertoenhancedomesticusage,the 132,000
110,000
150,000
RapeseedOilMT
biofueldirectivewhichisexpectedtoincreasethe
blendinglevelfromtheexisting5%to7%byJuly
1,2010
64,000
36,00050,000
100,000
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BiogasmarketinSwedenhasgrownsteadilyandisstillinanascentstagewithmajorpotential Biogas
Totalbiogaspotentialfromdomesticresidual
productsis10.6TWh/year
Overview TotalSupply
000tonnesofoileq./yr
Thisisequivalentto12%oftheenergy
consumptionattributabletoroadtransport
Potentialforbiogasproducedfromthe
residualproductsofforestindustryis
161514
11910
15
20
estimatedtobe59TWh/year
Biogasisexpectedtodevelopfurther
Biogasoffers
the
largest
reduction
in
greenhouse
ases com ared to other biofuelsPotential:DomesticResidualProducts
0
2007200620042003 2005
Gaininglargescaleacceptanceasvehiclefuelthat
generatestheleastemissionsofgreenhouse
gases
Since
it
is
produced
from
waste
and
residual
10%
Agriculture7%
products,itavoidsanycompetitionwithfood
production
Itisexpectedtobecapableofsupplyingfuel
to~20%ofthevehiclefleetinSwedenby
FoodIndustry
andothersectors
oo as e7%
SewageSludge
76%
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Introduction
Drivers
&
ChallengesGovernmentPoliciesandInvestments
Major
PlayersKeyDevelopments
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DriversandChallenges
DriversChallenges
FluctuationsinCrudeOilPrices
Res stance romt eSwe s Forestry
Industry
Foodvs.
Fuel
Issue
SupportforGreenCarOwners
HighGrowthinEthanolVehicles
HurdleswithBiogasSupply
BiofuelsMarketBeingDominatedby
Imports
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Constantlyincreasingtaxesonconventionalfuelswillboostthe
usageofbiofuels
TheSwedishtaxationpolicyiscreatingdemandforbiofuels
Twotypesoftaxesareleviedontheuseoffuels
CostIncentives Impact
FiscalTaxes:Thisincludesthegeneraltax
EnvironmentalTaxes:IncludestaxesonCO2,SOxandNOxemission
Thetaxation
level
has
been
constantly
increasing
in
order
to
propagate
the
use
of
biofuels
and
towardsreducingthelevelofgreenhousegassesemitted
1.5
EnergyTax
CO2Tax+
USD/liter
ConventionalGas
0.80.79+22%USD/liter
DieselOil
0.5
1.0
0.43
0.34
0.96
0.45
0.36
1.01 VAT
0.2
0.4
0.6 0.17
0.41
. 0.19
0.44
0.16
Allbiofuelsaretaxfreetill2013.Theyareexemptedfromenergytaxandcarbondioxidetax
thusbeingacosteffectiveoptionforconsumers
0.0.
2008
.
2009
0.0 .
2008 2009
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Feasibilityintheusageofbiofuelsoverordinaryfuelsisexpected
todrivethemarket
Fluctuationsin
Crude
Oil
Prices Impact
Swedendoesnotproducecrudeoilandisthuscompletelydependentonimportsforits
domesticpetroleumneeds
PetroleumConsumption
400
600
USD/barrel
1%
Thepetroleumconsumptionlevelshavebeensteadilydecreasingduetotherecentvolatilityin
0
200
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
pr ceso cru eo
Thishasactedasadriverforthebiofuelsmarketasplayersaremoreinclinedtowardsfocusing
ondevelopingalternativerenewablefuelsources
CrudeOilPrices
50
100
150
71.69
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Supportforgreencarownerswillincreasethedemandforvehiclesoperatingonbiofuels
Manypolicieshavebeenadoptedtowardscreatingincentivesforprospectivecarbuyersto
purchaseavehiclewhichrunsonbiofuel
Supportfor
Green
Car
Owners Impact
In2006,aCO2basedvehicletaxwasintroducedinordertoencouragethepurchaseofenergy
efficientvehicles,thusreducingemissionsinthetransportsector
Basedon
alegal
act
in
April
2006,
large
fuel
stations
are
required
by
law
to
offer
at
least
one
alternatefuel
Thisincludes~15%ofthetotalfuelstationsamountingtonearly4000fillingstations
Arevisioninpolicyisexpectedinordertoencompass60%ofallfillingstationstosellarenewablevehicle
fuel
by
2010 Thiswasforwardedinordertoenhanceavailabilityoffuelwhichwillleadtoalargerconsumer
basedemandinggreencars
Furthermore,privateindividualspurchasinganewecofriendlycarbetween1April2007and31
December2009areliabletoreceiveasubsidyofUSD1,456.9
TheGovernmentinitiallyearmarkedatotalofUSD36.4mnforsubsidies,butthiswasincreasedin2008as
e
eman
oreco
r en y
cars
was
g er
an
expec e
Stategovernmentshavealsotakenstepswhichisexpectedtodevelopthisindustry
AsofAugust2007,apermanentcongestionchargehasbeenintroducedinStockholm.Greencarsare
exemptfromthischarge
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Boomingmarketforethanolvehicleswillattractmoreplayerstothissector
HighGrowth
in
Ethanol
Vehicles Impact
EthanolcarsbeingsoldinSwedenhasbeengrowingdynamicallyat95%overthelastdecade
Thegovernmenthasbeencontributingtothisrisethroughadirectivewhichwaspassedon
NumberofEthanolCarsSoldinSweden
Fe ruary1,2009statingt ata carspurc ase yt egovernmentaut oritiesan 50%o
emergencyserviceshavetobeenvironmentallyfriendly
146,976
57,62835,499
25,86817,2321,0741,6691,926717
+95%
2001 2002 2003 2004 2005 2006 2007 2008 2009
SegmentationofGreenCarsintheMarket