Adesso BioProducts ABLars Lind

- 12 years production of sustainable biofuels

Stenungsund and Fredrikstad250 000 ton/y capacity

Adesso BioProducts AB

Turnover 2000 MSEK/year

12 years experience in production and sales of biofuels

The two most modern plants in Scandinavia with a combinedcapacity of 250 000 ton/year

Applications

-drop in fuels

-high blend B100 biodiesel

-heating and non-mobile

-chemistry

3

”Biorefinery financing Cv”:

40 years of experience in petrochemical industry, last 15 years in biobased development(Exxon, Unifos, Neste, Perstorp, Adesso)

Successes

• Investment within Perstorp in biodiesel plant,

• Acquisition of existing biodiesel plant

• MBO of biofuels business

Near misses

• Biojet fuel project

Studies

• Biomethanol, biobutanol

Two different business regimes compete:

Biofuels:

• Politically controlled• Mandates, quotas, tax incentives

Biobased chemicals

• Open, global, competitive• Fossil dominated

Biofuel market basics:

• The same molecule often exists as both fuel component and chemical building block (e.g. methane, methanol, ethanol…)

• Governments support biofuels via quotas, mandates or tax incentives

• Policy creates the market for biofuels, but at the same time limits it

• The biofuel market sets the price of biobased raw materials

• The fuel market is never bigger than the mandate

B100 growth;

Increased drop-in

% blending

volume

100

Ca 6,0 M m3

HVO, FAME

RME100

HVO100

ED95

Fossil diesel replacement in two dimensions

20 % quota; GHG compensated, politically controlled

Ca 500 000 m3

gasoilFAME

skatt tax

Diesel 80% RME 7 % RME100HVO 13+ %

10

5

Kr/l

Qouta drop-in diese pure biofuel

Quota diesel: fully taxed, more expensive than fossil dieselesel

Pure biofuel: tax incentivised cheaper than fossil diesel

FAME

tax

tax Market incentive

• Market above mandated• Competition/SME:s• Public transportation

A biofuels system need a strong floor;

- and three stable legs

Approved Vehiclesapproved for pure biofuels

Reliable productionfacilities

Infrastructure withfilling stations and availability

Political stability where CO2 emissions are priced

Biobased chemicals market basics

• Plastics, textile, lubricants, coatings, adhesives

• Dominated by fossil raw materials

• Biobased raw materials priced from fuels markets

• Emerging awareness and demand from end markets

• Mass balance issue

• Long value chains

Partnerships; Hållbarkemi2030, VSMK, Skogskemi

Investments in biorefineries – considerations

A big gap between long term visions and short term legislation

Biofuels

-huge complexity in all details regarding biofuels

-short term policy

-market caps

-view that something better is around the corner

Chemicals

-30 % more expesive than alternative

How to create a business model

• Strategic non-traditional business case

• Offtake risk moved to customer

• Customer-back end consumer´s paying power redistributed

• Truly edge are the products better in any way?

• Tax incentivised creates competitiveness

• Quota incentivised competitive sub-market

• CO2 fee would solve problem and create a level playing field

Business model related investment advices

Qouta market:

-Would not invest here, market capped

Tax incentivised market:

-excellent opportunity if incentive is predictable long term

Non-fuels market

-Huge opportunity, but high risk

-how to get a premium paid and howmto channel money back through value chain

Tack!