World Fuel Ethanol - Analysys and Outlook
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Transcript of World Fuel Ethanol - Analysys and Outlook
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1Prepared for METI
By
Dr. Christoph Berg, F.O. Licht
World Fuel EthanolAnalysis and Outlook
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2World Fuel EthanolSome basic concepts
By production route:Fermentation vs. Synthetic
By composition:Anhydrous vs. Hydrous
By end-use:Beverage, Industrial, Fuel
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3World Fuel EthanolThe production route
Synthetic ethanol:Ethylene, coal; non-renewable
Fermentation ethanol:Grains, sugar crops, tapioca, wood etc;renewable
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4World Fuel EthanolThe largest synthetic producers
SasolSADAF
BPEquistar
SodesMossgas
Japan EthanolJilin Chemicals
NeftochimChempetrol
Aprechim
0 50 100 150 200 250 300 350 400
Capacity (1000 tonnes/y)
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5World Fuel EthanolShare of synthetic ethanol
Fermentation 95%Synthetic 5%
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6World Fuel EthanolComposition
Anhydrous:99 pure, may be used in fuel blends.
Hydrous:96 pure, may be used as 100% fuelsubstitute.
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7World Fuel EthanolFuel alcohol in Brazil
1970 1980 1990 2000
0
2000
4000
6000
8000
10000
12000
14000
16000
Hydrous Anhydrous
mln
litr
es
-
8World Fuel EthanolEnd use
Beverage alcohol:Alcoholic spirits: vodka, shochu etc.
Industrial alcohol:Cosmetics, paints, inks.
Fuel alcohol:Blends or pure form.
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9World Fuel EthanolEthanol production by type
1975 1980 1985 1990 1995 2000 2005 2010
0
10000
20000
30000
40000
50000
60000
70000
80000
Industrial Beverage Fuel
in m
ln li
tres
-
10
World Fuel Ethanol 1993
Grains
Sugar
World Fuel Ethanol 1993
Grains
Sugar
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11
World Fuel Ethanol 2003
Grains
Sugar
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12
World Fuel Ethanol 2013
Sugar
Grains
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13
World Fuel EthanolThe drivers of growth I
Ethanol is good for the environment(Kyoto)
good for rural areas
reduces dependence on oil imports
enhances technological knowledge base
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14
World Fuel EthanolThe drivers of growth II
Demand is virtually unlimited.
Cost reduction potential is huge.
A tried and tested technology.
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15
World Fuel EthanolSuccess factors for biofuels
Feedstocks Technology
Policy
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16
World Fuel EthanolWorld fuel ethanol production by feedstock
Sugar crops 61%
Grains 39%
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17
World Fuel EthanolEthanol yields per ha
France (beet)
Brazil (cane)
USA (corn)
0 1000 2000 3000 4000 5000 6000 7000
Production (litres/ha)
-
18
World Fuel EthanolEthanol yields per tonne of feedstock
France (beet)
Brazil (cane)
USA (corn)
0 50 100 150 200 250 300 350 400
Production (litres/tonne)
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19
World Fuel EthanolGross feedstock costs per litre of fuel ethanol
France (beet)
Brazil (cane)
USA (corn)
0 5 10 15 20 25
Costs (US Cents/litre)
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20
World Fuel EthanolEnergy balance by feedstock
Sugar cane
Biomass
Sugar beet
US corn
Wheat
RME (Biodiesel)
0 1 2 3 4 5 6 7 8
Energy output/Energy input
-
21
World Fuel EthanolThe case for political support
Ethanol may serve sociallydesirable goals but it...
is more expensive than gasoline
faces an unfavourable opportunity coststructure
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22
World Fuel EthanolProduction cost reducing subsidies
Feedstock price support.
Capital cost support.
Income tax concessions.
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23
World Fuel EthanolIncome enhancing subsidies
Excise tax concessions.
Guaranteed (captive) markets.
Price guarantees.
Direct price support
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24
World Fuel EthanolEthanol in Brazil
19821983
19841985
19861987
19881989
19901991
19921993
19941995
19961997
19981999
20002001
2002
0
20
40
60
80
100
Ethanol Gasoline
in p
er c
ent
-
25
World Fuel EthanolBrazil ethanol vs. gasoline economics
1998 1999 2000 2001 2002 200320
30
40
50
60
70
Price advantage of alcohol over gasoline
in %
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26
World Fuel EthanolBrazils ethanol/methanol trade
19821983
19841985
19861987
19881989
19901991
19921993
19941995
19961997
19981999
20002001
20022003
-1000
-500
0
500
1000
1500
2000
2500
Imports Exports
mln
litre
s
-
27
World Fuel EthanolDeterminants of volatility in Brazil
The weather: El Nino, La Nina.
Sugar cane serves as raw material in two(four) markets:
Sugar (domestic and international)
Ethanol (domestic and international)
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28
World Fuel EthanolBrazil ethanol vs. sugar economics
1999 2000 2001 2002 20030.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
Sugar domestic Anhydrous alcohol
BR
L/k
g of
tota
l rec
over
able
sug
ars
-
29
World Fuel EthanolBrazil ethanol vs. sugar economics
%
1999 2000 2001 2002 2003-10
0
10
20
30
40
50
Profitability domestic sugar/ethanol
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30
World Fuel EthanolBrazil ethanol vs. sugar economics
1999 2000 2001 2002 20030.05
0.1
0.15
0.2
0.25
0.3
0.35
Sugar exports (VHP) Anhydrous alcohol (AAC)
BR
L/k
g of
tota
l rec
over
able
sug
ars
-
31
World Fuel EthanolBrazil ethanol vs. sugar economics
%
1999 2000 2001 2002 2003-40-30-20-10
01020304050607080
Profitability sugar exports/ethanol
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32
World Fuel EthanolRemedies
Spread cane growing over thecountry.
Decouple ethanol from sugarproduction (dedicated ethanol-for-export plants).
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33
World Fuel EthanolUS ethanol
19781980
19821984
19861988
19901992
19941996
19982000
20022004
20062008
20102012
0
5000
10000
15000
20000
0
10
20
30
40
50
60
Tax incentive (Y2) Output (Y1)
Clean Air Act
California
RFS (?)
mln
litr
es
-
34
World Fuel EthanolWill high stocks boost US ethanol exports?
1986 1988 1990 1992 1994 1996 1998 2000
-10000
-5000
0
5000
10000
Imports Exports Net trade
1000
hl
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35
World Fuel EthanolThe European Union
1991 1993 1995 1997 1999 2001 2003
0
1000
2000
3000
4000
5000
6000
Sweden Spain France
1000
hl
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36
World Fuel EthanolThe European Union
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
0
20000
40000
60000
80000
100000
120000
EU total
1000
hl
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37
World Fuel EthanolEU to become net ethanol importer
1992 1994 1996 1998 2000 2002
-8000000
-6000000
-4000000
-2000000
0
2000000
Imports Exports
hl
-
38
World Fuel EthanolFuel ethanol in Asia/Pacific
India: mandate, blending started 2003,country-wide blending seen in 2004.
Thailand: tax reductions, investmentssubsidies.
China: mandate in some regions.
Australia: tax exemption, direct support.
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39
World Fuel EthanolThe 2002 supply/demand balance in Asia/Pacific
JapanS Korea
SingaporePhilippines
Taiwan BrazilChina
ThailandS Arabia
S AfricaUSA
AustraliaIndia
Argentina
-2000
-1000
0
1000
2000
3000
Importers
Exporters
1000
hl
-
40
World Fuel EthanolCurrent suppliers in Asia/Pacific
Current suppliers with potential
Brazil
Thailand
India
South Africa
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41
World Fuel EthanolFuture suppliers in Asia/Pacific
Future suppliers with potential
Peru
Central America
Colombia
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42
World Fuel EthanolThe Mega-Project in Peru
Domestic and international effects
Introduce E-10
Replace MTBE/lead
Fight coca (cocaine)
Export to the US under Andean Pact
Export to Japan
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43
World Fuel EthanolExport potential under the Mega-Project
2004 2005 2006 2007 2008 2009 2010
-1400000
-1200000
-1000000
-800000
-600000
-400000
-200000
0
Exports
1000
litr
es
-
44
World Fuel EthanolCentral America
Domestic and international effects
Introduce E-10
Replace MTBE/lead
Provide alternative outlet for sugar cane
Export to the US under CBI
Export to Japan (?)
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45
World Fuel EthanolColombia
Domestic and international effects
Introduce E-10
Replace MTBE/lead
Exports ?
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46
World Trade in Fuel Ethanol 1990s
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47
World Trade in Fuel Ethanol in the Future
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48
World Fuel Ethanol ImportsBy country (very optimistic scenario)
2005 2006 2007 2008 2009 2010 2011 20120
2000
4000
6000
8000
10000
12000
14000
16000
Other Japan USA Europe
in m
ln li
tres
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49
World Fuel Ethanol ImportsBy country (optimistic scenario)
2005 2006 2007 2008 2009 2010 2011 20120
2000
4000
6000
8000
10000
Other Japan USA Europe
in m
ln li
tres
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50
World Fuel Ethanol Importsvs. beverage and industrial ethanol trade
2005 2006 2007 2008 2009 2010 2011 20120
2000
4000
6000
8000
10000
12000
14000
16000
Fuel ethanol Other
in m
ln li
tres
-
51
World Fuel Ethanol ProductionBy country
1975 1980 1985 1990 1995 2000 2005 2010
0
10000
20000
30000
40000
50000
60000
EU Australia India
Thailand China ColombiaPeru Central America Canada
USA (fuel) Brazil (fuel)
in m
ln li
tres
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52
World Fuel EthanolConclusions
World production will continue to grow strongly
Trade will grow as well but pace will depend on
The sugar-alcohol economics
New investments in origins
Establishment of a viable trading system (futures)
Solution of the subsidy issue
Overall outlook is very bright