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
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
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
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
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
329 bn USD 0.91 million man years
80%
Europe
151 mio dry ton The EU27 could displace 68% of its gasoline consumption in 2030
532 bn USD 1.18 million man years
54%
Argentina
39 mio dry ton Argentina could replace up to 100% of its gasoline consumption by 2030 and potentially export ethanol
65 bn USD 0.30 million man years
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%
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
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
Fuel Demand Residue Potential
133
20
21
22
60
180
221
151
177
20
Million dry tons
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
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 $100 per barrel
70
329
58
65
96
118
80
94
11
United States
China
EU-27
Brazil
Mexico
Investment Revenue
633
779
532
622
70
Note 1: Revenues are for delivered next-generation ethanol and are generated by plants throughout a 20-year lifetime.
Note 2: We assume total facility costs for a next-generation ethanol refinery will be approximately USD 1.50 per litre of annual capacity.
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
Bn. USD
JOB CREATION BY REGIONMILLION MAN YEARS OF EMPLOYMENT, 2030
Mexico
India
Australia
ArgentinaHarvesting a sustainable amount of agricultural residue will provide rural economies with an additional revenue source that will help diversify farmers’ income
0.91
0.15
0.12
0.30
0.08
United States
China
EU-27
Brazil
Fuel Demand Residue Potential
Note: Job creation, or one man-year of employment, in the bioproduct industry comes in two parts: firstly, biorefineryconstruction and operation jobs; and secondly, agricultural residue supply chain jobs.
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
1.37
2.87
1.25
1.18
0.15
1.02
0.78
0.17
Millionman-years
JOB CREATION ACROSS THEADVANCED BIOFUELS SUPPLY CHAIN
COLLECTION TRANSPORT CONVERSIONCONSTRUCTION
ETHANOL # OF REFINERIESETHANOL DEMAND
CONSTRUCTION JOBS
OPERATION JOBS
TRANSPORT JOBS
FEEDSTOCKJOBS
# OF REFINERIES
FEEDSTOCK MIX
CONVERSION EFFICIENCY
INVESTMENT NEEDS ($BN)
BIOMASS DEMAND
AGRICULTURAL RESIDUE
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
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
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
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
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
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
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
Create almost 0.30 million jobs between 2010 and 2030 mainly in rural areas
Argentine players would be the major beneficiaries, including 10 billion USD domestic engineering, construction and feedstock market
Economy
Save CO2 and reducing GHG emission from gasoline related road transport by 80%
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
Source: Bloomberg New Energy Finance, “Moving towards a next-generation ethanol economy” 2012
Create almost 0.15 million jobs between 2010 and 2030 mainly in rural areas
Mexican players would be the major beneficiaries, including 11 billion USD domestic engineering, construction and feedstock market
Economy
Save CO2 and reducing GHG emission from gasoline related road transport by 5%
Environ-ment
Jobs
THE TECHNOLOGY IS READY AND PRODUCTION IS BEING SCALED UP
2013201220112010 2014
Europe
US
Commercial scaleCommercial scaleDemonstration scaleDemonstration scale
Commercial scaleCommercial scaleDemonstration scaleDemonstration scale
Europe
Demonstration scale Demonstration scale Pilot scalePilot scaleBrazil
Demonstration scaleDemonstration scalePilot scalePilot scaleChina
Commercial scaleCommercial scaleDemonstration scaleDemonstration scale
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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