Bio-Fuels Marketing Presentation072007 WEB · 2005 2010 2015 2020 2025 2030 Potential ... •...
Transcript of Bio-Fuels Marketing Presentation072007 WEB · 2005 2010 2015 2020 2025 2030 Potential ... •...
Copyright © 2007 Global Insight, Inc. 3
Three Major Policy Drivers……ARE THEY COMPATIBLE?
EnvironmentEnvironment
Reduce criteria emissions at local, urban, metro, and national levelsReduce greenhouse gas emissions
AgricultureAgriculture
Create new markets for agricultural cropsReduce subsidies
EnergyEnergy
Energy securityReduce dependency on petroleum-based energy sourcesDiversify energy sources
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Strategic Questions Addressed in The Biofuels Boom
• What are the global drivers of biofuels consumption?
• What role do the major economic powers play in biofuels growth?
• What is the range of long-term policy objectives?
How will they vary from country to country and at the regional and local levels?How will policy influence the creation of a commercially viable biofuels industry?
• Will these policies remainsynchronized in the future?
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Strategic Questions Addressed in The Biofuels Boom
• How is the biofuels infrastructure evolving internationally?
• What is the current state of technology and how will it develop?
• What is the tipping point, where biofuels will impact the energy, agriculture and automotive markets?
• What are the expectations and limits to growth in the biofuels industry?
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Two Global Scenarios Are Evaluated
Alternative Future ScenariosAlternative Future ScenariosBased on the Market’s Current Views
Market RemanagedMarket RemanagedReference Case
OPEC re-emerges as the market ‘governor’OPEC Price Management:
Attempts to manage price in the low $60/bbl range
OPEC re-emerges as the market ‘governor’OPEC Price Management:
Attempts to manage price in the low $60/bbl range
Supply ConstrainedSupply Constrained
New Oil Market Era: Supply/demand balance on demand, not supply.
Prices Spike:Unprecedented price levels of more that $100/bbl
The Industry Must Consider the AlternativesDramatically Different Implications, Paths, and Consequences
Global Climate Change regulations are taken as a predetermined condition in both scenarios
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FUEL TYPES
Study Covers Multiple Feedstocks & Products
FEEDSTOCKSCORN SUGAR BEETS SWITCH GRASS &
WOOD CHIPS(NEXT GENERATION FUELS)
SUGAR CANE SOYBEANS CROP RESIDUES (NEXT GENERATION FUELS)
WHEAT & BARLEY RAPESEED, JATROPHA OIL, PALM OIL (BIO-DIESEL)
OTHER NON-CONVENTIONAL SOURCES (E.G.,ALGAE)
(Study does not include alternative fuels such as LPG, LNG, CNG, hydrogen, gas-to- liquids, or coal-to-liquids)
2ND GENERATION BIOFUELS
BIO-BASED DIESELBIOETHANOL
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Multiple Technologies are Examined
Biomass Propagation, Growth, Harvesting, and CollectionBiomass PretreatmentBiomass Conversion Biochemical (Sugar) RouteBiomass Conversion Thermochemical Route
• Gasification• Pyrolysis
Bio-based and Renewable DieselBiobutanol
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Commercial and Economic Feasibility of Technologies
Biomass Growth & Collection
Biomass Pre-
treatment
Biomass Biochemical Conversion
Biomass Gasification /Conversion
Biomass Pyrolysis
Bio-based Diesel Green Diesel Biobutanol
Breakthroughs Required
Politics & Regulatory Facing Challenges
Feedstock Supply
Inbound Logistics
Processing
Market Compatibility
Product Quality
Outbound Logistics
GHG/Environmental
Overall Economics
Commercial or likely to be
Success likely but development needed
Not known/depends on application
Pilot/or demo; success still to be determined
Major hurdle or cost to success
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The Study also Looks at a Variety of Biofuels Crops
Feedstock Screening Criteria Corn Ag
Wastes Grasses PoplarPulp & Paper
Wastes
Vegetable Oils Jatropha Algae Oil MSW
Animal Fats &
Oils
Stage of Development
Likely Availability
Harvesting & Collection
Pretreatment
Quality
Cost
GHG/Environment
Food vs. Fuel
Commercial or likely to be
Success likely but development needed
Not known/depends on application
Pilot/or demo; success still to be determined
Major hurdle or cost to success
Copyright © 2007 Global Insight, Inc. 11
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Supply/Demand Forecasts: BioethanolRegions Covered:
U.S. Bioethanol Supply/Demand EU Bioethanol Supply/Demand
• U.S. growth in bioethanolprojected to reach 15 billion gallons by 2015 (about 1 mmb/d)
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• EU growth to be limited by local supply and must rely on imports from Africa and South America
Demand Forecast Demand
Forecast
• European Union• Brazil
• China• India
• World• United States
• Africa
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Supply/Demand Forecasts: Bio-based Diesel
• Bio-based diesel demand and potential supply can be based on non-edible oils such as jatropha, algae, wood waste, and other non-food products
Demand Forecast
Demand Forecast
U.S. Bio-based Diesel Supply Remanaged EU Bio-based Diesel Supply Remanaged
• New technologies employing biomass conversion into liquids look promising such as NExBTL by Neste
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Implications On-Road Petroleum Demand
• Biofuels (e.g., ethanol and diesel) will increase significantly possibly reaching 15% of motor fuel pool world-wide
• Under different scenarios, the United States could reach 35% of on-road petroleum demand—in same range as Brazil
• Biomass producers will be in advantageous position to produce renewable fuel feedstocks
• The move will affect oil and gas producers in the United States and Canada by shifting from petroleum-based fuels
0% 5% 10% 15% 20% 25% 30% 35% 40%
World
United States
Europe
Asia-Pacific
Brazil
Other Latin America
Africa
Middle East
Rest of the World
Percent by Volume
Market Remanaged
Supply Constrained
Biofuel Shares of On-Road Petroleum Demand in 2030
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Profitability of Alternative Products, Technologies, and Shipping Routes
Biofuel Products & Alternatives Profitable Not Profitable
Bioethanol
U.S. Corn XU.S. Cellulosic (thermo chemical process at paper mill)
X
Brazil shipped to Rotterdam (sugar cane) XBrazil shipped to US (with $.54 tariff) XBio-based Diesel
U.S. (Biomass to liquids - BTL) Too EarlyGermany (Palm Oil) XGermany (Biomass to liquids - BTL) Too EarlyIndia (Jatropha) X
Market Remanaged Scenario(With current U.S. subsidies of $.53/gallon for bioethanol & $1.00/gallon for bio-based diesel)
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Implications for the Automotive Industry
• Based of survey of automotive manufacturers and analyses by GIobal Insight’s Automotive Group:
High volumes of biofuels in the United States will almost certainly require flex-fuel vehicles (FFVs) capable of running on blends up to 85% ethanol (E85)In Europe, ethanol content is held for most countries to 10% (E10), which is technically compatible in current vehiclesBio-based diesel levels of 5% (B5) are possible in virtually all vehicles, and new vehicles can be developed to accept blends up to 30% (B30)Technical fixes to meet higher biofuels levels are known but will add some costs to vehicles
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Market RemanagedMarket Remanaged Supply ConstrainedSupply Constrained
Aggressive Increases in Vehicle Efficiency Standards in U.S.
• 2018: New vehicle fleet fuel economy reaches 32 mpg
(193 g/km CO2)
• 2030: New vehicle fleet fuel economy reaches 48 mpg
(128 g/km CO2)
• 2020: New vehicle fleet fuel economy reaches 45 mpg
(137 g/km CO2)Requires 60% hybridization in the U.S.
• 2030: New vehicle fleet fuel economy reaches 53 mpg
(117 g/km CO2)
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Market RemanagedMarket Remanaged Supply ConstrainedSupply Constrained
EU also Needs to Tighten Fuel Efficiency Standards
• 2012: EU standard of 130 g/km CO2 emissions (without biofuels benefit) could be met
• 2018: EU new vehicle CO2emissions reach 120 g/km (without renewable fuel credit) and holds at this level to the end of the period
• 2012: EU standard of 130 g/km CO2 emissions (without biofuels benefit) could be met
• 2018: EU new vehicle CO2emissions reach 120 g/km
• 2025: EU new car efficiency is 90 g/km CO2
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Implications for Hybrid Vehicles
• Hybrid vehicles are introduced across all major (high volume) model lines
• Hybrid diesels are introduced
• As cost of hybrid components decreases, the diesel-hybrid combination becomes attractive as a market differentiator
Hybrid vehicles will play a significant role in the United States to meet
stringent efficiency targets
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Diesels will Continue to Play a Significant Role in EU
• 2008: Diesel cars trend at 50–60% of the new car fleet
• 2009: Diesel hybrids enter the market as mechanism for meeting fuel efficiency CO2 emissions targets
• 2015: Diesel vehicles are 65% of the new light duty vehicle fleet
• 2030: Diesels are 35% of light duty vehicle fleet and at least 25% of the on-road fleet
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Who Should Participate?
InvestorsInvestors
Agri-BusinessAgri-Business
AutomotiveAutomotive
EnergyEnergy
Policy & GovernmentPolicy & Government
Biofuels IndustryBiofuels Industry
TransportationTransportation
Equipment ManufacturerEquipment Manufacturer
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Final Report: Abridged Table of Contents
• EXECUTIVE SUMMARY• OIL PRICES & SCENARIOS
• Possible Future Oil Price Paths• Scenario Assumptions
• GOVERNMENT POLICY: MAJOR BIOFUELS DRIVER• Policy Goals Are Evolving• Review of Existing Biofuels Policies• Assumptions about Future Policy Development
• AGRICULTURE SECTOR RESPONSE• First-Generation Ethanol Boosted by Gains in Yields• Food vs. Fuel: Some Limitations, Especially for bio-based
diesels• Agriculture Industry's Future Role in Biofuels
• BIOFUELS TECHNOLOGY SCREENING & STATUS• Feedstock Screening Summary• Technology Screening Summary• Biomass Propagation, Growth, Harvesting, and Collection• Biomass Pretreatment• Biomass Conversion: Biochemical (Sugar) Route,
Thermochemical Route – Gasification and ThermochemicalRoute - Pyolysis
• Bio-based and Renewable Diesel• Biobutanol
• LIFE-CYCLE GREENHOUSE GAS EMISSIONS: AN EMERGING DRIVING FORCE FOR BIOFUELS
• BIOFUELS ECONOMICS• Biofuels Prices Relative to Petroleum• Cost Analysis/Cost Escalators• Experience Curves• Biofuels Costs: Results• Biofuels Margins: Profitability Comparisons• Feedstock Prices and Break-Even Values
• BIOFUELS PRODUCTION BY TYPE & REGION• Supply Evolution• Projected Production Potential: Summary• Implications for Industry Structure: Agriculture or Refining?
• BIOFUELS DEMAND: OVERVIEW & ANALYSIS• Biofuels Requirements Are Increased Around World• Total Motor Fuel Demand Growth Will Be Limited• Deviations in Supply Constrained Scenario
• REGIONAL DEMAND & SUPPLY OUTLOOK• Regional Ethanol Demand and Potential Production• Regional Bio-based Diesel Demand and Potential Production
• REFINING IMPLICATIONS• Refining Industry Impacts: Ethanol Blending and Biobutanol• Refiners: Some Synergies
• AUTOMOTIVE INDUSTRY RESPONSE• Flex-Fuel Vehicles• Ethanol Blends• Bio-based Diesel Blends• OEMs: Biofuel Conclusions• Fuel Efficiency Improvements
Copyright © 2007 Global Insight, Inc. 22
Project Team
Kevin LindemerRefining Sector Agricultural Economics
Phil GottAutomotive Technology
Stewart RamseyAgricultural Economics
Juliette KerrLatin American Biofuels Industry Policy & Analysis
Joseph AudetteAutomotive Sector
Sarah KingsburyAutomotive Sector
Dennis BanasiakTechnology Development Economics
Mary NovakEnergy Policy & Modeling
Margaret RhodesEnergy Policy & Modeling
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Copyright © 2007 Global Insight, Inc. 23
Previous Studies in Biofuels by Global Insight
• Study of the Global Biofuels Market to Identify Business Opportunities – 2006
• U.S Federal Highway Administration: Forecasting Revenues from Highway Trust Fund
• Global: Biofuels – The Next Step Towards Environmentally Neutral Transportation?
• National Railroad – Prospects for U.S. Ethanol Production• White Paper: The Potential for Increased Market Share for
Alternative Fuels• Study: Winners and Losers of Ethanol Mandates• Identification and Assessment of Alternative Fuels Market
Drivers
For additional information, please contact:
Gil RodgersGlobal Energy GroupTel: +1.781.301.9142E-mail: [email protected]
WWW.GLOBALINSIGHT.COM/ENERGY