SOCIO-ECONOMIC PROSPECTS OF ADVANCED BIOFUELS...622 bnUSD 1.25 million man years 67% India 110 miodry ton India could displace up to 100% of its gasoline consumption in 2030 and still

THE FUTURE IS BIOBASED:

SOCIO-ECONOMIC PROSPECTS OF ADVANCED BIOFUELS

Global Bioenergy Partnership (GBEP)

Seminar at Rio+20Seminar at Rio+20

NOVOZYMES IN BRIEFWORLD LEADER IN BIOINNOVATION

WE GREEN THE WORLD:� Enzymes save energy, chemicals, raw-materials and water� In 2011, Novozymes helped customers save 45 million tons of CO2

BASED ON INNOVATION:� 14% of sales re-invested in R&D� 7000 patents granted or pending

LEADING THE WAY IN ENABLING TECHNOLOGYFOR ADVANCED BIOFUELS

�World leader in biofuel enzymes

�Global R&D focus on advanced biofuels

� Broad partnership strategy – we are working on many feedstocks and technologies

�More than 150 people dedicated to advanced biofuels

Novozymes' R&D locations3

�More than 150 people dedicated to advanced biofuels

� Transport is the second largest energy

user and by far the largest oil user

� By 2050 there will be an estimated 2.3

billion additional cars worldwide – 1.9

billion of these in developing countries

� Transport continues to be the fastest

growing CO2 emittergrowing CO2 emitter

Source: International Energy Agency: ”World Energy Outlook”, 2011 and International Monetary Fund: ”Mass Car Ownership in the Emerging Market Giants”, 2008

Gas1%

Biofuels4% Electricity

1%

Electricity3%

EVEN IN RAPID DEPLOYMENT SCENARIOFOSSIL FUEL WILL DOMINATE IN 2030

Base case scenario2030 Energy consumption by source

Rapid deployment scenario2030 Energy consumption by source

Diesel 28%

Jet13%

Gasoline46%

Residual7%

Gasoline 39%

Diesel23%

Jet8%

Residual6%

LPG/CNG 3%

Biofuel18%

Source: World Economic Forum ”Repowering transportation” 2011

THIS IS A POWER PLANTPOWER FOR FOOD, FEED AND FUEL

FOOD, FEED AND FUEL

ELECTRICITY AND FEED

ADVANCED BIOFUELS

BNEF STUDY BASED ON THE AGRICULTURAL POWERHOUSES

United EU-27United States

Mexico

Brazil

Argentina Australia

China

India

EU-27

G20 countries not included: Canada, Indonesia, Japan, Russia, Saudi Arabia, South Africa, Republic of Korea, Turkey

Advanced

Power 2,5%Husbandry 5%

� A maximum of 17.5% is assumed to be available for advanced biofuel production

� Collecting only 25% of agricultural residue is a

AGRICULTURAL RESIDUE AVAILABILITY IN THE 8 SELECT REGIONS

Billion dry tons, 2030

Advanced biofuels 17,5%

Residue left on field75%

agricultural residue is a conservative methodology that takes into accounts technical and ecological constraints

� This purposefully aim to preserve soil quality and are in the low-to-medium range of comparable studies

Total = 4,6bn

Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012

200

250

AGRICULTURE ISA HUGE UNDER-UTILIZED RESOURCE

Million dry tons

The agricultural powerhouses have enough biomass for a good realisticscenario on car fleet mix

150

100

50

2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030


Wheat residue

Maize residue

Sugarcane residue

Rice residue

Soybean residue

Other residues

Five major crops represent 88% of the 24 crops analysed, totalling 800m tonnes in 2030 available for advanced biofuels

PRODUCTION POTENTIAL BY 2030LOWERING FOSSIL FUEL IMPORT BILL

8

4

3

1

Mexico

India

Australia

Argentina

Fuel Demand Scenario: 115bn liters advanced biofuels each year by 2030 –using only 5% of the agricultural residue supply

Residue Potential Scenario: 351bn liters each year – enough to replace around 50% of the forecast 2030 gasoline demand, which will provide an important step towards energy independence

8

37

7

7

53

24

9

8

8

United States

China

EU-27

Brazil

Mexico

Fuel Demand Residue Potential

Bn. liters

72

89

60

71

8


Note: India and Argentina meet 100% of their gasoline requirements without using all theirresidues. Mexico uses all its residues before reaching 10%.

WHAT’S IN IT FORTHE WORLD

Agricultural Residues

Energy Security Growth Jobs CO2

China221 mio dry ton China could displace up to 37% of

its gasoline consumption in 2030 779 bn USD 2.87 million man

years 29%

US180 mio dry ton The US could displace up to 16%

of its gasoline consumption in 2030

663bn USD 1.37 million man years

11%

2030

Brazil

177 mio dry ton Brazil could displace 83% of gasoline consumption in 2030. This is on top of sugarcane ethanol

622 bn USD 1.25 million man years

67%

India

110 mio dry ton India could displace up to 100% of its gasoline consumption in 2030 and still produce 4bn litres for export


80%

Europe

151 mio dry ton The EU27 could displace 68% of its gasoline consumption in 2030


54%

Argentina

39 mio dry ton Argentina could replace up to 100% of its gasoline consumption by 2030 and potentially export ethanol


80%

Australia

16 mio dry ton Australia could replace up to 19%

of its gasoline consumption by

2030

58 bn USD 0.12 million man

years

17%

Mexico20 mio dry ton Mexico could displace up to 7% of

its gasoline consumption in 2030, 70 bn USD 0.15 million man

years5%


INVESTMENT IN INVESTMENT IN BIOENERGY WILL BRING BIOENERGY WILL BRING ECONOMIC GROWTH ECONOMIC GROWTH AND DEVELOPMENT FOR AND DEVELOPMENT FOR RURAL AREASRURAL AREAS

• Biofuels is the only large-scale alternative

when it comes to transportation

• The technology is ready

• Biofuels is competitive to oil

• …and holds particular great potential in countries resting on an agricultural base

APPENDIX IAPPENDIX IGlobal Bioenergy Partnership (GBEP)Seminar at Rio+20

AGRICULTURAL RESIDUE AVAILABILITYCHINA IN THE LEAD, 2030

9

8

India

Australia

Argentina 2

110

16

39

The agricultural powerhouses still hold great potential. If next-generation technologies fulfil their promise then these resources can be viewed in the same terms as a barrel of oil

United States

China

EU-27

Brazil

Mexico


133

20

21

22

60

180

221

151

177

20

Million dry tons


REQUIRED INVESTMENTS WOULD BOOST ECONOMY IN RURAL AREAS, 2030

11

50

9

10

Mexico

India

Australia

Argentina Total potential to generate revenues of $1 trillion between today and 2050 (Fuel Demand Scenario) when assuming oil is at $100 per barrel

70

329

58

65

96

118

80

94

11

United States

China

EU-27

Brazil

Mexico

Investment Revenue

633

779

532

622

70

Note 1: Revenues are for delivered next-generation ethanol and are generated by plants throughout a 20-year lifetime.

Note 2: We assume total facility costs for a next-generation ethanol refinery will be approximately USD 1.50 per litre of annual capacity.


Bn. USD

JOB CREATION BY REGIONMILLION MAN YEARS OF EMPLOYMENT, 2030

Mexico

India

Australia

ArgentinaHarvesting a sustainable amount of agricultural residue will provide rural economies with an additional revenue source that will help diversify farmers’ income

0.91

0.15

0.12

0.30

0.08

United States

China

EU-27

Brazil


Note: Job creation, or one man-year of employment, in the bioproduct industry comes in two parts: firstly, biorefineryconstruction and operation jobs; and secondly, agricultural residue supply chain jobs.


1.37

2.87

1.25

1.18

0.15

1.02

0.78

0.17

Millionman-years

JOB CREATION ACROSS THEADVANCED BIOFUELS SUPPLY CHAIN

COLLECTION TRANSPORT CONVERSIONCONSTRUCTION

ETHANOL # OF REFINERIESETHANOL DEMAND

CONSTRUCTION JOBS

OPERATION JOBS

TRANSPORT JOBS

FEEDSTOCKJOBS

# OF REFINERIES

FEEDSTOCK MIX

CONVERSION EFFICIENCY

INVESTMENT NEEDS ($BN)

BIOMASS DEMAND

AGRICULTURAL RESIDUE


25% OFF TRANSPORT EMISSIONSWITH ADVANCED BIOFUELS

1500

2000

2500

Gasoline emissions

Fuel Demand Scenario

Residue Potential Scenario

Million ton CO2 equivalent

0

500

1000

1500

2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Note: EU sustainable transport group data demonstrates a litre of gasoline has a well-to-wheel emissions footprint of 2.42kg per CO2e. Following the RED methodology, the study assumes next-generation ethanol – using enzymatic hydrolysis – reduces GHG emissions by 80%.

Residue Potential Scenario


Residue Potential Scenario: 475 million tons of CO2 less between today and 2030. Equates to not burning 2.6 million railcars of coal

WHAT’S IN IT FOR

BRAZIL?

The Brazil can replace 83% of its annual gasoline consumption by 2030 with advanced biofuels

Energy security


Create almost 1.25 million jobs between 2010 and 2030 mainly in rural areas

Brazilian players would be the major beneficiaries, including 94 billion USD domestic engineering, construction and feedstock market

Economy

Save CO2 and reducing GHG emission from gasoline related road transport by 67%

Environ-ment

Jobs

WHAT’S IN IT FOR

ARGENTINA?

Argentina can replace 100% of its annual gasoline consumption by 2030 with advanced biofuels and potentially export ethanol

Energy security



Argentine players would be the major beneficiaries, including 10 billion USD domestic engineering, construction and feedstock market

Economy


Environ-ment

Jobs

WHAT’S IN IT FOR

MEXICO?

Mexico can replace 7% of its annual gasoline consumption by 2030 with advanced biofuels and potentially export ethanol

Energy security



Mexican players would be the major beneficiaries, including 11 billion USD domestic engineering, construction and feedstock market

Economy


Environ-ment

Jobs

THE TECHNOLOGY IS READY AND PRODUCTION IS BEING SCALED UP

2013201220112010 2014

Europe

US

Commercial scaleCommercial scaleDemonstration scaleDemonstration scale


Europe

Demonstration scale Demonstration scale Pilot scalePilot scaleBrazil

Demonstration scaleDemonstration scalePilot scalePilot scaleChina


LARGE SCALE PLANTSUNDER CONSTRUCTION (IN MGY)

Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012 and public information on large scale production plants under planned construction (biochemical conversion only)

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SOCIO-ECONOMIC PROSPECTS OF ADVANCED BIOFUELS...622 bnUSD 1.25 million man years 67% India 110 miodry ton India could displace up to 100% of its gasoline consumption in 2030 and still