Impact of the ILUC discussions on the development of advanced biofuels

SEKAB SUSTAINABLE GREEN CHEMISTRY SOLUTIONS

2014-05-13, AEBIOM EUROPEAN BIOENERGY CONFERENCE

ILUC – Indirect Land Use Change

1 Ha of barley used for

horse or cattle feed.

How to replace?

The same amount of

feed from Brazil. Will

that cause rainforest

cutting?

Set aside: 600 000 ha

in Sweden and

11 million in EU

Extra CO2 emission

based on the

calculations.

Not considered to

reduce the use or

make the food

production line

more effective.

Waste and cellulosic

material are not included

ILUC

- ILUC proposals from EC 2012 – 2013.

- Several modified proposals during the last year - together with changes in RED.

- Reporting from 2017 and rules from 2020.

- Default values.

- Definition on feedstocks. (?)

- No agreement at the end of 2013.

- Rumors of Greek activities spring 2014.

State aid guidelines.

- The state aid rules approved a month ago.

- Instead of “oil, sugar and starch crop” the definition is now “food based biofuels”. No specification is given in the text what it is.

- Instead of “cellulosic and waste” the wording “advanced biofuels” are used.

ILUC

- What will happen in future?

- Hard to predict when and how the next steps will be taken. 2015?

- The feedstock specification is crucial, residues today but how about tomorrow?

- Land use or feedstock?

- 5 – 7 % CAP on agricultural land?

Implication Example NER300

• A big EU program based on trade of 300 million green house

gas emission allowances. (≈ 42 bEUR)

• Support “all” type of RES Renewable Energy Source and

CCS Carbon Capture Storage.

• Cooperation EU COM DG ENVIROMENT and MS.

• NER 300 Covers extra

costs (relevant costs)

during start up and pre

commercial production

compared to “ordinary”

production.

Relevant costs

Example of implications for the

Industry - NER300

• The CEG project in Poland has in December 2012 received

30,9 M€ in funding from the EC.

• Positive response from MS to 15 MEUR in additional funding.

• The total investment in CEG project will be about 152 M€

plus 10 M€ in working capital.

• Interest but uncertain rules makes the investors reluctant.

• Letter from the MS to the EC for project time schedule

update and upfront payment. Due to the status of the project,

MS has not signed for financial support. (Hen and egg)

• Most biofuel project in NER300 has been postponed or

withdrawn, mainly due to uncertain rules. (4 of 7)

EU and Governmental support

• Price premium in Poland and some other

countries for local production.

• Double counting acc. to RED - quota.

• Green certificate for biogas and electricity

from lignin?

• National production support

– Example: Proposed Swedish cellulose Biofuel

support price guarantee. (FFF-investigation to

Government in dec 2013)

Advanced biofuels in Europe in 2020

Jan Lindstedt, Chairman AEBIOM Advanced Biofuels WG / SEKAB

AEBIOM European Bioenergy Conference

18 June 2013, Brussels

22

1 20

2

3

23

32

31

24 30

7 8

4

5 18

19

9

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27 21

25

29

6

16 14

15

28

26

Project name Output

(tons/year)

Product

1 Chemrec BioDME project 600 DME

2 Chempolis Biorefining Plant 5.000 Ethanol

3 SEKAB Ethanol Pilot Plant 160 Ethanol

4 BALI Biorefinery Borregaard AS 110 Ethanol

5 Weyland 158 Ethanol

6 Biobutanol demo 15 Biobutanol

7 Inbicon (Dong Energy) Demo 4.300 Ethanol

8 BornBio-Fuel 2 BioGasol 4.000 Ethanol

9 SEKAB Demo plant 48.000 Ethanol

10 BioMCN commercial 200.000 Methanol

11 ECN demo 6.500 SNG

12 Futurol Project 142.920 Ethanol

13 Bioliq® Project 608 DME

14 Abengoa Arance EC demo 40.000 Ethanol

15 Abengoa Bioenergy 4.000 Ethanol

16 BEST Beta Renewables 40.000 Ethanol

17 Sunliquid Clariant 1.000 Ethanol

18 UPM Lappeenranta Biorefinery 100.000 Biodiesel

19 Bioenergy VERBIO Straw 9.344 Biomethane

20 Ajos BTL Forest BtL Oy 115.000 FT products

21 Stracel Project UPM 100.000 FT products

22 Värmlandsmetanol 100.000 Methanol

23 Bio2G Project 116.800 SNG

24 GobiGas (phase 2) 61.538 SNG

25 Projet Syndièse CEA France 22.000 FT products

26 Domsjö Fabriker Chemrec AB 140.000

(or 120.000)

Methanol

(or DME)

27 SNG demo Biomassekraftwerk 3.600 SNG

28 PERSEO pilo plant 288 Ethanol

29 INEOS Bio 24.000 Ethanol

31 Maabjerg Energy Concept 60.000 Ethanol

3.000 Biomethane

32 Nordisk Etanol 100.000 Ethanol

30.000 Biomethane

32 Sunpine 100.000 Biodiesel

Thermochemical

Biochemical

Chemical

High expectations of the advanced biofuels sector in 2020

• EC proposal for a Directive (COM(2012)595) suggests a 5% cap on crop-based biofuels

• Estimation of advanced biofuels availability based on the 2020 planned installed capacity

• In a business as usual scenario, the advanced biofuels availability in 2020 would

not match the quantities needed to reach the nREAP targets

*Biofuels multiple-counted under (COM(2012)595) except algae and used cooking oil

Renewable eneryg in transport nREAP targets [Mtoe]

Biofuels 28,9 Hydrogen 0,0 Renewable electricity 3,1 Other 0,7 Total renewable energy in transport 32,7

[Mtoe] nREAP targets - taking into account the proposed 5% cap on crop-based biofuels (COM(2012)595)

EU-27 consumption in 2011 (Eurostat, EurObserv'ER)

Available for consumption in 2020 based on the planned installed production capacity in EU (AEBIOM calculations)

Total renewable energy in transport (10%) 32,7 Crop-based biofuels (5%) 16,4 13,2 Hydrogen 0,0 Other 0,7 Renewable electricity 3,1 1,5 Non crop-based biofuels biofuels 12,5 0 3,9* (1,6 without multiple counting)

Thank you for your attention!

Jan Lindstedt

Jan.Lindstedt@Sekab.com