2nd Generation Biofuel Markets - International …...•Blend wall, sustainability rules, lack of...
Transcript of 2nd Generation Biofuel Markets - International …...•Blend wall, sustainability rules, lack of...
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2nd Generation Biofuel Markets:
present and future
Henrique Pacini
Economic Affairs Officer
Trade and Environment Branch
UNCTAD
November 13, 2015
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Meeting the SDGs… needs innovation.
How can advanced bioenergy help?
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World Bioethanol Market
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World Biodiesel Market
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20162008
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World installed capacity of cellulosic ethanol -
2015
Region
2G Ethanol
Installed
capacity
(million litres)
% of world
total
US 490.37 32%
China 340.19 21%
Canada 303.45 19%
EU 295.63 18%
Brazil 177.34 11%
World (2015) : 1637.26 100%
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What is driving advanced biofuel markets?
• Supply instruments: Public R&D support, development bank loans
for pilot and commercial plants
• Demand-pull: Blending mandates
– US RFA2; EU 2020 targets
• Specific blending target for cellulosic biofuels: US
• Indicative sub-target: EU
• Double counting towards regional targets
• Diversification of business risk, new business/market opportunities
– Sugarcane/beets perishable; woody biomass can be stored and
more easily traded
– More resilient industries, multiple inputs and outputs, biomaterials
• Large feedstock potentials in developing world (e.g. Laos, Nepal)
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United States
Source: Duke Center for Sustainability & Commerce.
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China
Source: Duke Center for Sustainability & Commerce.
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Canada
Source: Duke Center for Sustainability & Commerce.
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EU
Source: Duke Center for Sustainability & Commerce.
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Brazil
Source: Duke Center for Sustainability & Commerce.
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Future projections - BR
Source: BNDES
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Future projections: US
0
100
200
300
400
500
600
700
800
900
2015 2016
Installed Production capacity EPA mandate
uncertain
Cellulosic ethanol
Million litres
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Future projections: US (2)
US DOE/ EIA sees
modest participation of
cellulosic biofuels!
• Cellulosic forecasts are part of a
larger bioeconomy process - does
not account for input transformation
into biomaterials, feed an food
(high-value)
• Overcome the blend wall
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Can such bioeconomy industries spread
benefits in developing world?
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Private investment already flowing…
*most in wind
and solar
projects
*concentrated
in few
developing
countries
Wind&solar:
less «politically
charged» than
biomass
Biofuels:
Regulatory
uncertainty
(e.g. US/RVO;
EU iLUC, etc)
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Deployment of advanced biofuels
0.01
0.10
1.00
10.00
100.00
1000.00
2002 2004 2006 2008 2010 2012 2014 2016 2018
Insta
lled
cap
acit
y (
millio
ns o
f litr
es,
log
)
Start of operations (or planned start)
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2nd Generation Project
Where are they absent?
• Eurasia
• Africa
– Why? Should and could this be changed?
• Advanced bioenergy is subject to interpretation
– Models in Europe not necessarily the same elsewhere
Biomass Heating -
Sweden
Biomass cookstoves
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Can it be done in developing countries?
• Feedstock costs (1st gen)
• Capital costs (2nd gen)
– How to overcome investment
risk?
– Linkages with local economy
– Agriculture and forestry
Addax Bioenergy project in
Makeni, Sierra Leone
8 stakeholders
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Conclusions
• Cellulosic fuels now a reality
– Tech and facilities limited to a handful of countries
– Uncertain rules / markets slows down deployment
• Blend wall, sustainability rules, lack of strong push in
traditional areas such as BR
– Unlikely to grow exponentially like 1st gen did 2007-2010
• Investments and tech transfer to developing countries and LDCs is
possible
– International Cooperation -> China sets example
– Avoid straightjacket adv biofuel models
• Best returns might be initially elsewhere and in biomaterials
• WTO issues: Likely depend on future industry growth and upcoming
regulations
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Thank [email protected]