Global Market Update: A Review of the Market And Biofuels ...futurefuelstrategies.com › ... › 7...
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Global Market Update: A Review of the Market And Biofuels’ Position on the World Energy Stage
Tammy Klein, Future Fuel Strategies
World Biofuel Markets Conference
March 2017
Presentation Overview
Paris Agreement & Biofuels,
Fuel Efficiency &
ZEVs
Biofuels Fuel Economy
Zero Emission Vehicles
Conclusion
Future Fuels Outlook Service Focus on Non-Conventional Fuels & Vehicles, Their Drivers & Impact on Fuel Demand
Their Drivers & Impact on
Conventional Fuels & Vehicles
Biofuels
Advanced Alternative
Fuels
Fuel Economy Zero Emission Vehicles
Connectivity
Sustainable Mobility
Idea is to look at these issues in a holistic, integrated way to draw out key trends and intelligence that are helpful in your work and business and allow you to assess strategic threats and opportunities
©Future Fuel Strategies, www.futurefuelstrategies.com. All rights reserved. Source: UN Treaty Collection, Oct. 6, 2016
Countries Ratifying the Paris Agreement Most Are Planning/Implementing LCFV Initiatives as Transport Is a Major Focus Area for GHG Reductions
Key
Ratified Paris Agreement
Ratified Paris Agreement & plans or is implementing LCFV initiatives/policies
Key
RT, FE, EV
RT & FE
RT & EV
RT Only
FE & EV
FE Only
EV Only
All Measures
Sources: Future Fuel Strategies citing data from Renewables 2016 Global Status Report, REN 21; Intended Nationally-Determined Contributions (INDCs) Offer Opportunities for Ambitious Action on Transport and Climate
Change, Partnership for Low Carbon Transport; Global Renewable Fuels Alliance RT=Renewable Transport, FE=Fuel Efficiency, EV=Electric Vehicles
INDCs & Targets and/or Policy Support for Renewable Transport, Fuel Efficiency & Electric Vehicles
BIOFUELS
Key
National Renewable Transport (RT) Obligation
Local RT Obligations
INDCs for Biofuels
National RT and INDCs for Biofuels
Sources: Future Fuel Strategies citing data from Renewables 2016 Global Status Report, REN 21; Intended Nationally-Determined Contributions (INDCs) Offer Opportunities for Ambitious Action on Transport and Climate Change, Partnership for Low Carbon Transport; Global Renewable Fuels Alliance
Global Renewable Transport Obligations & Global INDCs that Reference Biofuels
Global Biofuels Market Is Still Growing Biofuels Are the #1 Option to Reduce Transport GHGs under the Paris Agreement …
Global ethanol production is expected to expand modestly about 11% from 116 billion liters (30.6 billion gallons) in 2015 to 128.4 billion liters (33.9 billion gallons) by 2025 and 50% of it will come from Brazil
Biodiesel production is expected to increase 34% from 31 billion liters (8.2 billion gallons) in 2015 to 41.4 billion liters (10.9 billion gallons) by 2025, driven by policies in the U.S., Argentina, Brazil and Indonesia
Though biofuels remain controversial in the U.S., EU and elsewhere, it will be hard to do.
Global Liquid Fuel v. Biofuels Demand …But Most Analyses Show Biofuels Still Capture a Very Small Piece of Overall Fuel Demand through 2045…Why?
Source: IRENA, 2016
Challenges for Advanced Biofuels The Crux: Cost Competitiveness with Conventionals
According to IRENA, the production cost of advanced biofuels is likely to amount to USD 0.60-1.10 per liter by 2045.At oil prices below USD 80/bbl, advanced biofuels would have difficulty competing with fossil-based gasoline and diesel.
Source: IRENA, 2016
FUEL ECONOMY
INDCs & Targets and/or Policy Support for Fuel Efficiency Improvement
Source: Future Fuel Strategies citing Intended Nationally-Determined Contributions (INDCs) Offer Opportunities for Ambitious Action on Transport and Climate Change, Partnership for Low Carbon Transport
Key
Fuel Efficiency INDCs or Policy Support
Is Replacing Fuel Demand Realistic? Oil demand will decline for passenger cars, but increase for maritime, freight, aviation and petrochemicals
Efficiency drives down fuel demand for passenger cars; biofuels as well to a smaller extent. Biofuels needed to help decarbonize maritime, freight and aviation – those are not easy or
perhaps even practical sectors to electrify.
Source: IEA, November 2016
With These Efforts, Fuel Economy to Improve Rapidly through 2040
ExxonMobil: Average fuel economy of new cars worldwide will rise from about 30 mpg in 2015 to close to 50 mpg in 2040.
ZERO EMISSION VEHICLES
INDCs & Targets and/or Policy Support for Zero Emission Vehicles
Key
ZEV INDCs or Policy Support
Source: Future Fuel Strategies citing data from Intended Nationally-Determined Contributions (INDCs) Offer Opportunities for Ambitious Action on Transport and Climate Change, Partnership for Low Carbon Transport
EVs a Tiny Part of the Car Market However Growth Has Been Exponential in Last 5 Years and Expected to Continue
European and Asian markets have especially shown dramatic EV growth most recently, surpassing North America’s electric vehicle sales in 2015
Electric vehicle market growth through 2016 has almost entirely been in automobile markets with substantial regulatory policy and financial incentives in place
Source: ICCT/ZEV Alliance, 2016
Are EVs Really a Threat to Oil? (1/2) …Fuel Efficiency Has a Larger Impact Initially…
Question is when that threat will really materialize and how large the threat really is
The 35% global EV penetration rate predicted by BNEF may be too bullish
EV growth will be much slower in emerging markets outside of China
Are EVs Really a Threat to Oil? (2/2) …But EVs Coupled with Mobility Technology Could Change the Game by 2035…
CONCLUSIONS
Energy Demand is Going to Change Low Carbon Demand to Increase by 2040, While Oil and Coal Decrease
Demand for low carbon energy to increase, according to IEA with China and Africa largest share
Low carbon here is primarily renewables, but efficiency measures (including fuel economy), ZEV penetration and biofuels in transport important, too
Source: IEA, November 2016
Transportation Demand by Sector and Region through 2040
According to ExxonMobil, global transportation-related energy demand is projected to increase by about 25%, while total miles traveled per year by cars, sport utility vehicles (SUVs) and light trucks will increase about 60%, reaching about 14 trillion in 2040.
Huge growth in commercial sector as shown, a major opportunity for biofuels Largest increases in Asia Pacific, Africa and Latin America
Net Oil Imports Rise in China, India & Decline in the U.S. and Europe
Greatest gains are in efficiency (including fuel efficiency) Evs and NGVs make the largest impact in China, but not in the other regions IEA expects renewables to make a small contribution by 2040
Source: IEA, November 2016
Conclusions
Paris Agreement The Paris Agreement and reducing GHGs will continue to be a major driver for these
initiatives in transport.
Biofuels Demand continues to grow, but still a small portion of overall fuel demand Advanced biofuels continue to be challenge on numerous fronts, but there could be
lights at the end of the tunnel with new policies focused on facilitating their use (e.g. EU)
Fuel Efficiency A serious driver of demand decline for fuels, and this will continue Some markets still have no fuel economy standards in place and they are in huge
growth areas such as Latin America, Asia and Africa
ZEVs ZEV market growing fast, but a small portion of the overall global fleet ZEVs coupled with autonomous technology and ride sharing represent a major threat
in the long-term for fuel demand globally in the passenger car fleet
Questions?
Tammy Klein, Principal Future Fuel Strategies
+1.703.625.1072 (M); [email protected] http://www.futurefuelstrategies.com
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Future Fuels Outlook Service Focus on Non-Conventional Fuels & Vehicles, Their Drivers & Impact on Fuel Demand
Their Drivers & Impact on
Conventional Fuels & Vehicles
Biofuels
Advanced Alternative
Fuels
Fuel Economy Zero Emission Vehicles
Connectivity
Sustainable Mobility
Idea is to look at these issues in a holistic, integrated way to draw out key trends and intelligence that are helpful in your work and business and allow you to assess strategic threats and opportunities
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positively or negatively Connectivity and ride-sharing
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