Trends in the Energy Marketplace - University of Wisconsin ... · Copyright 2011 Renewable Energy...

Copyright 2011 Renewable Energy Group® Copyright 2011. Renewable Energy Group®

Trends in the Energy Marketplace

Farmer Cooperatives Conference Gary Haer, VP Sales & Marketing, Renewable Energy Group/Chairman, National Biodiesel Board

Thurs. Nov. 8, 2012

Copyright 2011 Renewable Energy Group®


Agenda

• Global Biofuel Production and Demand

• State of Global Ethanol

• Future of Biodiesel in the U.S.

2


State of Global Biofuels

• Trends

– Significant recent growth

– Significant economic contribution

• Drivers

– Volatile crude petroleum prices

– Added value for agriculture

– Climate change mitigation

– Federal policies


Biofuels Economic Contribution

Source: Cardno Entrix -

Urbanchuk


Biofuel’s Contribution to Agriculture

• 47.9 billion liters from coarse grains – 116.9 million metric tonnes – 10.6% of world coarse grain production

• 31 billion liters from sugar cane and molasses – 6 million metric tonnes – 5% of world production

• 1.7 billion liters from sugar beets – 2.8 million metric tonnes – 8.8% of world production

• 17.6 billion liters from vegetable oils – 15.9 million metric tonnes – 13% of global production


Ethanol

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World Ethanol Production 2000 2010 2020 2010-20 (Mil Liters) (Mil Liters) (Mil Liters) % Change

U.S. 7,603 50,333 63 961 27.1% Brazil 10,615 26,200 50 393 92.3% EU-27 4,455 16 316 266.2% China 2,970 2,048 7 930 287.3% India 1,720 1,892 2 204 16.5% Canada 215 1,363 2 359 73.1% Thailand 60 672 2 111 214.1% South Africa 339 384 421 9.7% Columbia 310 587 89.5% Japan 11 307 946 208.6% Argentina 171 303 470 55.1% Australia 150 299 492 64.6% Indonesia 160 210 248 17.8% Viet Nam 150 423 182.5% Philippines 80 118 603 410.1% Peru 71 217 205.1% Malaysia 66 74 12.8% Turkey 22 64 88 36.6% Mexico 67 64 90 40.3% Tanzania 29 55 90.6% Mozambique 25 59 133.9% Other 5,135 3,880 4 916 26.7% Source:FO Licht; OECD-FAO 2011-

20

TOTAL 29,319 93,242 154 962 66.2%


Key Ethanol Players

• United States

• Brazil

• European Union

• Emerging Producers


World Ethanol Production


Ethanol Feedstocks


Biodiesel

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Biodiesel

Source: FO Licht; OECD-

FAO


Global Biodiesel Production


Commercialized U.S. Feedstock

*Inedible corn oil biodiesel is fastest growing feedstock

category in U.S. with corn ethanol plant’s implementation of

extraction technology

*


Biodiesel Diversity: Advanced Biofuel, Here Now

Biodiesel is among the most diverse fuels in the world, with an expanding array of feedstocks.

Cottonseed Oil?

Camelina Oil?

Yellow Grease Animal Fats Soybean Oil

Algae Corn Oil from ethanol

production

Canola Oil


U.S. Biodiesel Nationwide Production


Strong, Sound, Certain Policy Supports

Biodiesel Industry Growth

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

(est)

2012 2013 2104 2015 2016 2017

Th

ou

san

d G

allo

ns

U.S. Biodiesel Production

Economic Downturn RFS2 Uncertainly

Lapse of Biodiesel Tax Credit

RFS2 Implemented Biodiesel Tax Credit

Extended

Reference: National Biodiesel Board


RFS2 Important Issues

• Biomass-Based Diesel fuel volume obligation for 2014 and beyond to be determined by the U.S. EPA Administrator

– U.S. biodiesel RFS2 task force studied feedstock availability and production capacity

– Calling for steady, sustainable growth in volume requirements

– NBB Goal: 5% by 2015


State Policy Programs Drive RFS2 Utilization

Requirement

Incentive

Low Carb Fuels

California

Oregon

Washington

Montana

Idaho

Nevada

Utah Colorado

Arizona New Mexico

Texas

Oklahoma

Wyoming

Hawaii

Kansas

Nebraska

South Dakota

North Dakota

Tennessee

Kentucky

Minnesota

Iowa

Missouri

Arkansas

Indiana Illinois

Wisconsin Michigan

Ohio

Florida

Louisiana

Georgia

S. Carolina

N. Carolina

Mississippi

Alabama

Maine

Virginia

New York

Vermont

New Hampshire

Delaware

Maryland

W. Virginia

Massachusetts

Connecticut

Rhode Island

New Jersey

Source: REG

Legend

Pennsylvania

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Copyright 2012

Renewable Energy Group® 20

Addressable Market: 54.4B Gal. Distillate Market

Source: EIA

Biodiesel helps meet demand in large and growing market

2010 U.S. Distillate Fuel Market (bn gallons)

Residential 3.9

Commercial & Industrial

4.8

Oil Company 0.9

Railroad 2.1

Vessel Bunkering 1.3

On-Highway 35.6 Off- Highway

2.1

Other 3.7


Domestic Focus Opportunities

• B5 Is Diesel Fuel

– National acceptance for up to 5% biodiesel in diesel fuel

– B5 penetration represents 2.7 billion gallon B100 market in U.S.

• B6-B20 specification garnered Original Equipment Manufacturers endorsements


Engine Manufacturers Supporting B20


Conclusions

• Global expansion of biofuels industry

– Significant contribution to the global economy • GDP

• Job creation

• Environmental quality

• Fastest growth in emerging and developing countries

– Asia

– Africa


Conclusions

• Continued growth of the biofuels industry worldwide – Expansion of all sources of alternative energy

– Desire to mitigate the economic impact of volatile world oil and petroleum prices

– New revenue source for farmers and stimulates agricultural production

• Biofuels especially important to agriculture as feedstock production provides significant revenue and supports expanded yield growth


Thank You

Gary Haer

Vice-President Sales and Marketing Renewable Energy Group®

416 S. Bell Ave.

Ames IA 50010-0888 (O) 515-239-8057

[email protected]

www.REGI.com

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