2008-06-26 DNV Biofuels Position Paper -Intranet_tcm109-305204

8/7/2019 2008-06-26 DNV Biofuels Position Paper -Intranet_tcm109-305204

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Biofuels in DNV

DNV Biofuels Position Paper Main findings

By DNV R&I project group (GPH, LARMA, SBRY, SENO)

June 2008


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Det Norske Veritas AS. All rights reserved Slide 202 July 2008

Presentation outline

Evaluation of the value chain (production, transport, consumption)

Market outlook- Volumes, size, main characteristics- Important decision gates

DNV business opportunities


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The Biofuels Value Chain - challenges

BiomassProduction

BiomassProduction

SustainabilityChallenges

- f(feedstock),Crops/by-products

- Competition withFood Production

- Land use.Biodiversity

- Traceability

- Social aspects,

CSR- GHG

SustainabilityChallenges

- f(feedstock),Crops/by-products

- Competition withFood Production

- Land use.Biodiversity

- Traceability

- Social aspects,

CSR- GHG

BiofuelProduction

BiofuelProduction

TechnologicalChallenges

- Productionstandards?

- Footprint

- Tracing

- Development ofnew andimprovedproductiontechnologies

2nd ++genplants

TechnologicalChallenges

- Productionstandards?

- Footprint

- Tracing

- Development ofnew andimprovedproductiontechnologies2nd ++genplants

Inboundlogistics

Inboundlogistics

Challenges

- Transport offeedstock

- SCC, corrosionetc dependingon biofuelsource, i.e. fuelquality

- Intermediates,e.g. pyrolysis oil

Challenges

- Transport offeedstock

- SCC, corrosionetc dependingon biofuelsource, i.e. fuel

quality- Intermediates,

e.g. pyrolysis oil

Distribution

Distribution

TransportChallenges

- Technicalchallengesdepends onsource ofbiofuel, / fuelquality

- Materialcompatibility,SCC, corrosion

- Blending, tracing

TransportChallenges

- Technicalchallengesdepends onsource ofbiofuel, / fuel

quality- Material

compatibility,SCC, corrosion

- Blending, tracing

Customers/ Important

marketplayers

Customers/ Important

market

players

- Governments/ authorities

- EnergyCompanies

- New FuelProducers

- EngineManufacturers

- Tranport

- Maritime

- Consumers

- Governments/ authorities

- EnergyCompanies

- New FuelProducers

- EngineManufacturers

- Tranport

- Maritime

- Consumers


4/15 Det Norske Veritas AS. All rights reserved Slide 402 July 2008

Market outlook


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Key market issues and outlook

Global biofuels industry by 2016- Global bioethanol share to reach about 5% of world motor gasoline use by

2016

Imperfect market largely driven by governmental incentives

Key drivers energy security GHG domestic agriculture - high energyprices

2nd generation production technologies commercial introduction around2012 - require technological breakthrough

- 3rd ++ technologies large potential uncertain timescale- Biosafety challenges


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Market outlook 2006 2016USA, Brazil and EU dominates

0

10

20

30

40

50

60

70

80

90

100

Worl

d etha

nol

USA e

thano

l

Braz

il etha

nol

EU 2

5 etha

nol

Chin

a etha

nol

India

ethan

ol

World

biod

iesel

USA

biod

iesel

Brazil

biodie

sel

EU 25

biod

iesel

Production volume in billion litrer per year

2006 2016

Bioethanol Production Biodiesel Production

8% global trade of bioethanol Virtually no trade in biodiesel

Source: UNCTAD 2007


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Market potential show a differences in import/export potential.New actors likely to emerge in the global biofuel market

Regional trade potential

Global export

Import, domestic consumption

Domestic increase?

Global exporter?

Import, domestic consumption

?

Market outlook: Increased demand in USA, EU, China and Japan. Increased

production and potentially export from S.C.America, Africa and Asian Pacific


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Key legislative environment give indication of responsible actor(s) in the supply chain

USA National target for production through blendingrequirementsResponsible:blenders

Brazil Blending requirement for biodiesel (2% - 40% (2035)).Smaller requirement for ethanol.Responsible:suppliers (?)

Germany Must sell minimum quota of biofuels + tax privileges forresidual sale. Can be meet through mixture or pure fuel Responsible: gasstations

France Partial tax exception for an agreed production volumedetermined each year.Responsible: biofuelplant owners

UK Specific percentage of overall fuel sales must come from

biofuels (5% within 2010)

Responsible:

suppliers

Sweden Large petrol stations (more than 1000 litres) must sellbiofuelsResponsible: gasstations

India 5% blend requirement expected soon Responsible:suppliers (?)

Indonesia State-run program. Biodiesel to be sold in state-owned gasstations (Pertimina)Responsible: state-owned suppliers

Malaysia 5% palm oil requirement in all diesel. Car manufacturersurged to produce biofuel-running carsResponsible:suppliers?

Philippines 1-2% coconut oil blend requirement on diesel Responsible: carmanufacturers(?)


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Cost Comparisonbiofuels versus diesel/gasoline


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Investment into renewable energy: biofuelinvestment mainly into production capacity

0

5

10

15

20

25

30

B i of uel s

B i omas s and

was t e

S ol ar

Wi nd O

t h er

r enewab l es

E ner gy

ef f i c i enc y / ot h er

l ow c ar b on

Investmen

t in $US Billion

Total invesment inrenewable energyin 2006 by

technologyAsset financingactivity

Public market

VC/PE

Pure capacity expansion

Some new tech, but mostcapacity expansion


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Det Norske Veritas AS. All r ights reserved Slide 1102 July 2008

GHG reduction must be documented

www1.eere.energy.gov/biomass/environmental.html

Level of reduction depends on:

Fuel type

Feedstock

Growth practices

Location

Documentation needs driven by

Customer demand

LegislationGHG reduction incentives

M f d d DNV
http://www1.eere.energy.gov/biomass/environmental.htmlhttp://www1.eere.energy.gov/biomass/environmental.htmlhttp://www1.eere.energy.gov/biomass/environmental.htmlhttp://www1.eere.energy.gov/biomass/environmental.html


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Map of competence needs and DNVopportunities related to biofuels

QualityStandards

SustainabilityStandards

TechnicalQualification

Biofuels

FuelQuality

Competition withFood Production

Land use/Biodiversity

Crops/ by-products

GHG

CSR

Biomass Production

Established EnergyActors

New FuelProducers

Transport

Maritime

CustomersTraceability

EmissionsCO 2, NO X,SO X, etc

Government/ authorities

Management systems

Sustainability Risk management solutions


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http://www.dnv.com/


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Current Bioethanol Market


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Current Biodiesel Market

Documents

2008-06-26 DNV Biofuels Position Paper -Intranet_tcm109-305204