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Food and EnergySustainability of Biofuels
Carmen [email protected]
Erice Seminars on Planetary EmergenciesAugust 21, 2008
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Summary: World Biofuel Policies South America
– Brazil: ~ 50% ethanol, ~ 24% flex-fuel vehicles, ethanol exporter. B2, B3 (2008), B5 (2010).
– Argentina, Columbia, Jamaica & Dominican Republic: 5% to 10% mandates.
Asia– China: 50% E10 coastal provinces (2010)
50% E10 nationally (2020).– India: E10 mandate in 13 states.
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Summary: World Biofuel Policies EU
– Directive target: 5.75% biofuels (2010) – Obligation: 10% biofuels (2020).– Most EU countries exempt a large share of
motor fuel tax on biofuels.– France: 5.75% biofuel (2008) to 7% (2010) to
10% (2015).– Germany: Achieved 6.3% biofuel in 2007.
Africa– South Africa: 2% biofuels (2013). – Nigeria: E10 mandate.
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Summary: World Biofuel Policies North America
– Canada: 5% renewable gasoline (2010), 2% renewable diesel (2012).
– U.S.» Renewable Fuel Standard (RFS) that grows to 36
billion gal./yr. by 2022 (~15% U.S. gasoline).» $1.01/gal. production tax credit for cellulosic
biofuels.» blenders’ tax credit of $0.51/gal. of ethanol,
dropping to $0.45/gal. in 2009, expires after 2010, but extension at some level is likely.
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U.S. RFS Requires 2nd Generation Fuels
Four Fuel Types; GHG Requirements– Conventional ethanol (starch) capped at
15Bgal./yr.; 20% fewer life-cycle GHG emissions than gasoline for new plants.
– Non-conventional, advanced renewable fuels; 50% fewer GHG emissions.
– Biodiesel; 50% fewer GHG emissions.
– Cellulosic biofuels: Advanced renewable fuel from cellulose, hemicellulose or lignin; 60% fewer GHG emissions.
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U.S. RFS Feedstock Land UseRestrictions Feedstocks May Include:
» Managed plantations (trees);» Crops from previously cleared, non-forested land;» Biomass from private forest lands;» Algae; & » Separated yard and food wastes.
Feedstocks May Not Include: » Biomass from ecologically sensitive, protected lands;» Biomass from federal forest lands.
Enforcing these restrictions on biofuel imports will pose a regulatory challenge.
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Summary: New U.S. RFSRenewable Fuels Standard
0
5
10
15
20
25
30
35
40
Bill
ion
Gal
lons
.
Biodiesel 0 0 0 0.5 0.65 0.8 1 1 1 1 1 1 1 1 1 1 1
Any Advanced 0 0 0 0.1 0.2 0.3 0.5 0.75 1 1.5 2 2.5 3 3.5 3.5 3.5 4
Cellulosic Advanced 0.1 0.25 0.5 1 1.75 3 4.25 5.5 7 8.5 10.5 13.5 16
Any Renewable Fuels 4 4.7 9 10.5 12 12.5 13.2 13.8 14.4 15 15 15 15 15 15 15 15
Old RFS 4 4.7 5.4 6.1 6.8 7.4 7.5 7.6 7.7 7.8 7.9 8.1 8.2 8.3 8.4 8.5 8.6
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
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Energy Technology Perspectives Model
BiofuelsProduction
Industry
Residential/commercial
Electricityproduction
Refineries
Transport
HeatingCoolingPower
Movingetc.
GasolineNatural gasElectricity
CokeBiofuels
Heatetc.
Renewables
Fossil fuels
Nuclear
Usefulenergy
Primary energy
Conversion sectors/processes
Finalenergy
Demandsectors/processes
Coke ovens
Heatproduction
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MARKAL Model StructureEnergy Technology Perspectives Model
Technology Characteristics Energy Sources Used Efficiency Costs (Capital and O&M) Availability
Energy Resources Cost and Availability
Energy Service Demands By Sector/Region
Other Assumptions Long-Term Discount Rate System Reserve Requirements
Policies GHG C&T, RFS, RPS, GHG taxes
Dynamic LP Optimization
Technology Mix for Each Time Period
That Satisfies Energy Demand
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Updates to ETP Model-Feedstocks
CBISugarPalm oilBagasseOther
BrazilSugarSoy oilCornBagasseAg residueOther
ArgentinaSugar*Soy oilCorn*WheatAg residueOther
ColombiaSugar*
Palm oil*Bagasse
Ag residueOther
IndiaSugarBagasseAg residueOther
ChinaSugar*Soy oil*Corn*Wheat*BagasseAg residueOther
MexicoSugarCorn
BagasseAg residue
Other
CanadaCornWheatAg residueOther
* Countries/feedstocks that have only a single data point, rather than a stepped projection.
Cellulosic feedstocks also generally have limited price points.
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Updates to ETP Model-Technologies
Feedstock
SourceConversion Technology
ProductDistribution/Consumption
Sugar Sugarcane Sugar-ethanol mill Ethanol
New distribution infrastructure required
Consumption limited to E10 for most of existing vehicle fleet
Higher blends (i.e. E85) can be used in small portion of fleet
StarchCorn
Dry mill EthanolWheat
Cellulose
Bagasse/other agricultural residues
Biochemical conversion
Ethanol
Forestry residues
Thermo-chemical alcohol synthesis
Ethanol/higher alcohols
Energy cropsFischer-Tropsch
synthesisDistillates, naphtha
Products are refining feedstocks
Compatible with conventional fuel infrastructure
OilOil Palm
Transesterification Biodiesel (FAME)
Can be blended with petrodiesel at high ratios in most applicationsSoybean
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World Biofuels Policies Modeled in ETP
Country/region
Gasolinetax
Biofuel tax exemption
(2010)Ethanol tariffs Other Biofuels Policies
Australia $1.40/gal 100% 90¢/gal
Canada $0.25/gal 100% 20¢/gal
China $0.15/gal 100% 0
Central & S. America
$0.70/gal 50% 27¢/gal Subsidy for hydrous ethanol & FFV; Brazil ethanol blending mandate of 20-25%
Europe $2.80/gal 90% 90¢/gal 5.75% market share 201010% market share 2020
India $1.90/gal 0% 200%
Japan $1.85/gal 90% 17% 500 million liters gasoline equivalent by 2010
S. Korea $3.02/gal 90% 0
USA $0.42/gal 45¢/gal(ethanol)
54¢/gal 36 billion gallons ‘renewable fuels’ (2022); $1.01/gal cellulosic tax credit
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• Grain ethanol production levels off after 2015• Large growth in cellulosic biofuels • Subsidy for early cellulosic plants is crucial to this growth.
Estimated Worldwide BiofuelsProduction
Global Production
0
20
40
60
80
100
2005 2010 2015 2020 2025 2030
Bill
ion
Ga
llon
s E
tha
no
l Eq
uiv
ale
nt
Biodiesel
Cellulosic
Sugar
Grain
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Who Produces & Who Consumes
U.S. and Western Europe are net importers. U.S. consumes roughly half of supply. Brazil is net exporter. Not all mandates are expected to be met (including U.S.).
0
20
40
60
80
100
2005 2010 2015 2020 2025 2030 2005 2010 2015 2020 2025 2030
Production Consumption
Bill
ion
Ga
llon
s E
tha
no
l Eq
uiv
ale
nt
.
Other
India
China
Columbia
W Europe
C, S America
Brazil
U.S.
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Conclusions and Questions Existing policies will cause a large
expansion in world biofuels production. U.S. $1.01/gal cellulosic tax credit important
to speed up commercialization of cellulosic biofuels.
Policies now emphasize 2nd generation biofuels & sustainability.
Policies to avoid adverse land use changes need to be tested.
2nd generation biofuel feedstocks still need land; consequently,
to some extent, the fuel-vs.-food or fuel-vs.-environment tradeoffs will still exist.
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Reference Material I have only focused on our reference biofuels
growth scenario to introduce the rest of our session.
However, we ran a number of policy and market scenarios.
Reference Slides ETP Analyses
ETP Policy & Market Scenarios Sample ETP Policy Results - E20 Certification in the U.S. ETP Oil Price Scenarios ETP Biofuel Technologies ETP Model Regions
Detailed World Biofuel Policies Summary
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Rest of Session Habitat and Biodiversity Losses from Biofuels
– Dr. Lian Pin Koh – Institute for Terrestrial Ecosystems, Switzerland
Biofuel Policies and the Food Crisis in Developing Countries– Dr. Kwadwo Asenso-Okyere – International Food Policy Research Institute, Ethiopia
Global Policy Options for Sustainable Biofuels
– Professor Wally Tyner – Purdue University, USA
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REFERENCE SLIDESETP Analyses
ETP Policy & Market ScenariosSample ETP Policy Result: E20 Certification in
the U.S.ETP Oil Price Scenarios
ETP Biofuel Technologies ETP Model Regions
Detailed World Biofuel Policies Summaries
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ETP ScenariosMarket ScenariosFeedstock Supply
Oil PricesHigh Oil Price + High FeedLow Oil Price + Low Feed
Policy ScenariosUS Tariff/Credits ExtensionUS Tax Credits Extension
$50/tCO2 (global)E20 Certification in USA
No US cell-biofuel tax creditGlobal CO2 Price
$0
$10
$20
$30
$40
$50
$60
2005 2010 2015 2020 2025 2030
CO
2 P
ric
e (
20
05
$/t
on
ne
)
2017 Brazil Feedstock Curve
0
10
20
30
40
50
60
0 200 400 600 800 1000 1200Cumulative Production (MMT)
Av
era
ge
Va
lue
(U
S$
/t)
Low
Reference
High
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Sample ETP Policy ResultsE20 Scenario (U.S. Consumption - 2020 Results)
Policy Case: E20 would be certified for use in conventional gasoline vehicles.
E20 allows lower cost ethanol to replace F-T liquids and increases RFS compliance.
Ethanol
Biodiesel
F-T Liquids
Ethanol replacing
F-T Liquids
Increased use of biofuels
Total: 28 B gallons in Ref30 B gallons in E20
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Sample ETP Policy ResultsE20 Scenario (U.S. Consumption - 2020 Results)
U.S. imports increase by 60%.
E20 case illustrates costs of marketing E85 in the U.S.
Reference (2020)
Ethanol
RFS gap
F-T Liquids
Biodiesel
Imports
U.S.
E20 (2020)
F-T Liquids
U.S.
Imports
Biodiesel
Ethanol
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ETP Oil Price Scenarios
Oil prices are OECD import basket prices(typically much lower than NYMEX oil prices).
Oil Price
$-
$20
$40
$60
$80
$100
$120
2005 2010 2015 2020 2025 2030
OEC
D im
port
bask
et
pric
e, 2
006$
Reference High Low Current + AEO 2008
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Dry Corn Mill
Milling LiquefactionSacchari-fication
Rectification/dehydration
Distillation Fermentation
1 tonne corn
112 gallon ethanol
Ethanol storage
Centri-fugation
Evaporation
Drying/DDGS
Enzyme
Steam Yeast Mash
Whole stillage
Wet grains
4 MMBtu natural gas
Thinstillage
Condensate
330 kg dry DDG
Enzyme AcidSteam90 kWh electricity
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Sugarcane Mill
Receiving/ Preparation
ExtractionSugar
process
Electricity generation
Steam boilerEthanol process
1 tonne cane
12.3 gallonsethanol
Excess bagasse
Bagasse
Juice
Molasses
57 kg Sugar
Stillage
Steam
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Bio-chemical Conversion
Feed handling
1 tonne biomass
Nutrients
Pretreatment conditioning
Saccharificationco-fermentation
Wastewater treatment
Burner/boiler turbogenerator
Ethanol process
99 gallons ethanol
Nutrients/EnzymeGypsum
Lime/Steam/Acid
Recycled Water
Steam
Solids/Syrup
Wastewater
216 kWh net electricity
Methane
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Thermo-chemical Conversion(BTL)
Air
Gasification
Air separation
unit
F-T synthesis &
refining
Acid gas removal
Two-stage water gas
shift
Syngas cooling & cleaning
Power island
1 tonne biomass
74 gallons of naphtha and
distillates
O2
Unconverted syngas + C1-C4 gases
70 kWh process
electricity
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Thermo-chemicalConversion (CTL+BTL)
Gasification
O2Air
2241 MWcoal
Gasification
Air separation
unit
F-T synthesis &
refining
Acid gas removal
Two-stage water gas
shift
Syngas cooling & cleaning
Syngas cooling & cleaning
Power island
High temp water gas
shift
886.1 MW biomass
639.8 MW Diesel
blendstock
392.0 MW Gasoline
blendstock
O2
Unconverted syngas + C1-C4 gases
459.5 MW Export
electricity
Process electricity
Underground storage
Underground storage
H2S + CO2
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ETP Model Regions
OECD-Regions US Canada Mexico Western Europe Eastern Europe Japan Australia and New
Zealand South Korea
Non-OECD Regions
FSU China India Rest of Asia Latin America Africa Middle East
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Biofuel Targets in North America
Country Current National Biofuel Targets Enacted Remarks
USA Renewable Fuel Standard (RFS) of 36 B gallon RF by 2022 16 B gallons of RF must be cellulosic biofuels that have 60% lower GHG emissions than petroleum fuel.E10 is highest level certified.
2007 51¢(2008) to 45¢(2009-10) per gal. ethanol blenders’ credit.
$54¢/gal. ethanol import duty
$1/gal. biodiesel credit.
50¢/gal. renewable diesel credit
$1.01/gal. cellulosic biofuel credit
Canada Gasoline blend mandate:5% renewable fuels by 2010.
Diesel blend mandate: RF2 by 2012.
2006 In 2008, biofuel tax exemptions were replaced by production incentives.
The 2012 mandate applies only to renewable diesels that can be effective under the full range of Canadian climatic conditions.
Mexico No goals yet, many studies
Government participating in the Mesoamerican Biofuels Group working on a 10- year Plan of Action for Ethanol Blending (E2 to E25).
---- In April 2007, the Mexican Congress voted overwhelmingly for a biofuels law. But in Sept 2007 President Calderón vetoed it because of its overemphasis on corn and sugarcane. (after 2007 corn tortilla price spike)
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Biofuel Targets in Central and South America
Country Current National Biofuel Targets Enacted Remarks
Brazil Set goal to increase ethanol production 50% from 2007- 2009 World’s oldest ethanol blend mandate now set at E25B3 required by end 2008; B5, by 2010
1976
2004
Since 2004, the Proalcool ethanol content mandate has been allow to vary from 11-25% according to market conditions. ~ 88% of new cars sold are flex-fuel
Argentina E5 and B5 by 2010 2006 National blend mandates
Colombia E10 existing; B10 by 2008 2006 In Mesoamerican Biofuels Group
Dominican Republic
E15 and B2 by 2015. In Mesoamerican Biofuels Group
2007 Ranks 3rd in the Caribbean Basin Initiative (CBI) in sugar cane production.
Jamaica 2007 E10 (i) ethanol blend mandate E15 (i) by 2012
2006 Ethanol policy started with using ethanol to replace MTBE.
* (i) indicative
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Biofuel Targets in Western Europe
Region Current National Biofuel Targets Enacted Remarks
EU Minimum target for sustainable biofuels of 10% of overall petrol and diesel consumption by 2020
European Heads of State endorsed a European Commission plan that addressed the issues of energy supply, climate change and industrial development and agreed to an Energy Policy for Europe.
2007 The target for biofuels has been set at the same level for each Member State in order to ensure consistency in transport fuel specifications and availability. Member States which do not have the relevant resources to produce biofuels will easily be able to obtain renewable transport fuels from elsewhere. It is both likely and desirable that biofuel needs will in fact be met through a combination of domestic EU production and imports.
The proposed scheme includes minimum criteria for the greenhouse gas performance of qualifying biofuels. It sets binding criteria for biodiversity and bans certain types of land use changes. It will apply equally to domestically produced and imported biofuels.
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Biofuel Targets in Western Europe
Country Current National Biofuel Targets Enacted Remarks
Finland Triple use of RF and biogas from forest products to 6% of total by 2018—2024
2004 Grants provided to biofuel use demonstration projects
France RF 10% of transport energy by 2015 2005 In 2007, set overall goal of 23% RE by 2020 (verses 10.3% in 2005)
Germany E5, B5 mandates, 4.4% of diesel and 1.2% of petrol sales must be renewable.# 1 producer/ user of biofuels in EU2010 mandate: 5.75% (achieved 6.3%)
20042007
2008 E10, B7 mandates cancelled, delayed due to corrosion concerns. EU RE target: 18% (2005 = 5.8%) 100% tax exemption for B100
Italy Existing E1 and B1 blend mandatesBiodiesel tax exemption
2007 Ranks 3rd in EU after France for biodiesel production.
Spain 20% RE by 2020 (vs. 2005 = 8.7%)Biodiesel technical standards set
2002 Biofuel tax exemption now at 100%.
Sweden 2005 mandate: 2% (achieved 3%)All gas stations required to offer RFOnly fossil-free energy by 2020 (i)
200220042007
Free parking for flex-fuel cars 100% renewable fuel tax exemption. Carbon tax since 1991
The Netherlands
Existing renewable fuel mandate of 2% 2010 mandate of 5.75% and excise tax reductions
2007 Goal (no time) of phasing out gasoline with no bio-additives
United Kingdom
As of 2008, RF5 certified for all vehicles. Renewable Transport Fuel Obligation (RTFO) set at 5% by 2010.
2004 100% depreciation for biodiesel plants showing CO2 reductions.
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Biofuel Targets in Asia
Country Current National Biofuel Targets Enacted Remarks
China 2x ethanol use by 2010, 10x by 20204x biodiesel use by 2010, 40x by 2020 all increases from 2006 base year.
50% national E10 blend mandate by 2020
2006
2000
Expansion rates were set based on expected availability of ethanol and biodiesel. 20% E10 blend mandates began in coastal provinces, 50% E10 mandate by 2010 in those provinces
India E5 certified nationally and mandated in some areas. E10 mandated in 13 states/territories
2006 No biodiesel mandate is expected before 2010.
Taiwan National 25-fold (i) increase in biodiesel use by 2010 to ~2% of diesel use. 8% RF use is long term goal
2007 B1 blend mandate started in 2008B5 and E3 are certified.
Indonesia RF2.5 mandate of to begin Oct. 2008
E10 and B10 certified
2008 Significant biodiesel production by 2004.
Japan 2010 target of 500,000 million liters per year ethanol (gasoline equivalent)2030 target of 6 billion liters per year or 5% of transport energy
2007 B5, E3 maximum certified.
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Biofuel Targets in Africa
Country Current National Biofuel Targets Enacted Remarks
Nigeria E10 mandate, not yet fully implemented, is intended to spur rural economic development
2007 Most ethanol now imported from Brazil. Domestic ethanol feedstock is naira
South Africa
Domestic biofuels are to comprise 2% of all fuels by 2013.
E8 and B2 certification and blend mandates. E10 proposed.
If targets met biofuels would account for three quarters of the 2013 RE goal.
Feedstocks to be promoted are sugar (ethanol) and soy oil and sunflower oil (biodiesel)
2008
2013
Current biodiesel tax exemption (100%)Planned ethanol tax exemption (100%)
In 2006, the Cabinet approved a draft Biofuels Industry Strategy scheduled to be final by October 2008 after stakeholder consultation.
Biofuels goal part of national RE goal (set at about 5% of 2006 electric energy use) by 2013.
The policy motivation of the strategy is to open up new markets in the struggling farming sector.
